MNCS Morning Navigator

14 September 2022

MNCS Morning Navigator September 14, 2022

Global Market Highlights
DJIA weakened by -3.94% on Tuesday (13/09), followed by S&P500 (-4.32%) and Nasdaq (-5.16%), Wall Street corrected significantly as inflation data released on August 22 grew + 0.1% MoM/+8.3% YoY, or more than the convention forecast at -0.1% MoM/+8.1% YoY. Furthermore, inflation was also recorded to rise to +6.3% YoY (vs +6.1% YoY at convention). Today, the market will be looking toward several data releases such as: 1) US PPI MoM Aug; 2) UK Core Inflation Rate YoY Aug; 3) UK Inflation Rate YoY Aug.

Domestic Update
The government has successfully issued IDR19 trillion worth of SUN at auction on Tuesday (13/09/22), hence achieving the indicative target that was already set. MNCS Comment: The success of SUN issuance was influenced by the increase in investor interest as reflected in the value of incoming bids amounting to IDR52 trillion (vs IDR47 trillion previous auction). We see a high demand for SUN series which will become next year's benchmark FR0096 (10-year benchmark) and FR009/New Issuance (15-year benchmark) with total incoming bids reaching IDR26.1 trillion or equivalent to 50% of the total incoming bids for the 7 issued SUN series.
Furthermore, the national Covid-19 daily rate had increased by 2,896 active cases (13/09).

Company News
1. TOWR IJ reported the realization of capex up to 1H22 of IDR1.57 trillion, while the target of capex allocation in FY22E reached IDR4 trillion. As much as 30% of the allocation will be used for towers, 40% for connectivity and fiber towers and the rest for land leases (Kontan). MNCS Comment: Realized capex in 1H22 reached 39.25%, while the allocation target increased from IDR3.25 trillion in FY21 to IDR4 trillion in FY22E, as the number of towers and tenants increased. TOWR is currently traded at the level of 18.02x/4.73x PER/PBV.
2. BBNI IJ plans to increase the dividend payout ratio to 30% for the FY22E fiscal year (Emiten News). MNCS Comment: DPR increased from FY21 fiscal year by 25.05%, with projected net profit growth in FY22E of +26.90% YoY to IDR13.83 trillion. Therefore, dividends that can be distributed are IDR4.15 trillion, divided by the number of outstanding shares is 18.65 billion shares, thus making the potential amount of DPS to be IDR222.50/share or an increase of +52.08% YoY from FY21 DPS. Currently, BBNI is traded at the level of 1.33x PBV.
3. BSSR IJ will distribute an interim cash dividend of USD100 million from the FY22E financial year, cum date for the regular market and negotiations on September 21, 2022 (Emiten News). MNCS Comment: Assuming Bank Indonesia's USD IDR middle rate per September 13, 2022 is IDR14,839, the estimated interim cash dividend is IDR1.48 trillion. It is recorded that the total shares of the company are 2.62 billion or the amount of interim DPS will be IDR567.13/share, thus making the dividend yield offered reach 11.07%. Currently, BSSR is traded at 3.51x/2.95x PER/PBV.

IHSG Updates
JCI rose by +0.88% to 7,318.02 on Tuesday (13/09), followed by net foreign buy which reached IDR1.42 trillion. The majority of sectors experienced strengthening and boosted the index rate, led by the transportation sector (+2.24%) followed by the financial sector (+1.87%). On the other hand, the weakening sectors were led by the technology sector (-0.60%) followed by the raw materials sector (-0.39%). The strengthening of the index was in line with the majority of other Asian bourses. The realization of social assistance in the form of BLT and BSU for beneficiaries, in response to the increase in subsidized fuel prices, was welcomed positively by market participants. On the other hand, the Rupiah exchange rate closed lower at IDR14,852/USD. We estimate that the JCI will move in the price range of 7,300-7,355. Today's recommendation: ADHI, ADMR, AUTO, JPFA.

Corporate Actions
Cum Dividend: MLPT (IDR155/share)
Public Expose: BBCA, MEDC

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