Global Market Highlight
Dow jones slipped by -0.43% on Thursday (09/09) followed by S&P 500 (-0.46%), and Nasdaq (-0.25%). Wall Street closed at the red zone after Federal Reserve Bank Governor Michelle Bowman said that the weak August-21 jobs report likely will not throw off the central bank's plan to trim its USD120 billion in monthly bond purchases later this year. Today the market will be looking forward to several data releases such as: 1) Canada Unemployment Rate; 2) UK GDP YoY; 3) Germany Inflation Rate YoY Final.
Domestic Update
• Bank Indonesia (BI) reported domestic retail sales dropped by -5.0% MoM/ -2.9% YoY in August-21. MNCS Comment: Domestic retail sales figures came below expectation to grow 2.5% last month. Sales of clothing, auto, home appliances and information and communication dropped by double digits. The decline was attributable to the implementation of PPKM leveling in the last two months. We believe the retail sector to stay under pressure particularly among non-essential goods and other business that rely heavily on conventional method of brick and mortar with low digital strategy adoption.
• Furthermore, there was an addition of 308 new Covid-19 cases in Jakarta yesterday.
Company News
1. ASII IJ has used around IDR3.7 trillion of the total capex of IDR11 - IDR12 trillion in 1H21. Most of the capex is allocated to finance heavy equipment and mining businesses, in addition to developing ASII business units such as automotive, toll roads, property, ASII, and also for new business investments (IQ Plus). MNCS Comment: Currently ASII only used 33% from their capex, we see that in 2H21 ASII will be more expansion not only to invest in the startup business, but ASII is currently also developing Astra Pay digital wallet industry which able to used with QRIS at 2.5 million merchants in Indonesia. Currently ASII is trading at 12.49x/1.36x PE/PBV.
2. GGRM IJ spent almost IDR5 trillion capex for the construction of Dhoho airport in Kediri, East Java which was targeted for completion in 2023. The capex is used for land acquisition costs, consultants, designs, and others. Dhoho Kediri Airport will be built at 13,558 square meters out of a total airport land area of 321 hectares (Kontan). MNCS Comment: This is the first time the resources are owned by private parties, we see this is one as GGRM diversification business strategies in long-term investment other than the cigarette sector, which is fully supported by the government and it’s possible to increase the development of Kediri city. The management is also trying to use internal cash as the capex funding. GGRM’s current cash level is IDR10.06 trillion. Currently GGRM is trading at 13.97x/1.06x PE/PBV levels.
3. WTON IJ recorded IDR3.28 trillion new contracts until August-21 from the total target of IDR8.02 trillion. The largest contribution came from the infrastructure sector, which amounted to 76.13%, the rest came from the property, energy, mining, and industrial sectors (Bisnis Indonesia). MNCS Comment: The company is still trying to reach the target of new contracts by participating in tenders from abroad. WTON is currently still in the tender stage for the elevated rail project in the Philippines. Currently WTON is trading at 28.22x/0.64x PE/PBV levels.
IHSG Updates
JCI strengthened by +0.70% to 6,026.02 after closing lower in the first trading session on Thursday (09/09) followed by net foreign buy reaching IDR830.22 billion. JCI closed higher in almost all sectors led by the industrial sector (+3.16%) followed by the infrastructure sector (+1.48%). On the other hand, the transportation & logistic sector weakened by -0.85% followed by the consumer cyclical sector (-0.66%). The strengthening of the JCI in the second session was driven by the release of data from the Ministry of Health which showed the addition of positive Covid-19 cases today had fallen below 6,000 cases. On the other hand, the Rupiah was stagnant at IDR14,252/USD level on the spot market. We estimate the JCI will move in the range of 5,900-6,080. Today's recommendation: ADRO, LPKR, BRPT, SMGR.
Corporate Action
RUPS: AMIN
Public Expose: CTRA, LPPF
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