Global Market Highlight
DJIA fell by -0.48% on Friday (17/09) followed by S&P 500 (-0.91%), and Nasdaq (-0.91%). Wall Street closing was lower in a broad sell-off on Friday, ending a week buffeted by strong economic data, corporate tax hike from 21% to 26.5%, and the market's await for the outcome of the FOMC meeting regarding the tapering guidance. Today the market will be looking forward to several data releases such as: 1) US NAHB Housing Market Index; 2) Brazil BCB Focus Market Readout; 3) German PPI MoM.
Domestic Update
• Indonesia Financial Service Authority (OJK) reported the undisbursed loan increased by +1.54% YoY in July-21 after contracting by 0.17% YoY in June-21. MNCS Comment: The increasing value of undisbursed loans amid ample banks liquidity reflecting that the intermediary function of banks remained interrupted. We still expect loan disbursement to stay low due to limited supply and demand dynamics.
• Furthermore, there was an addition of 155 new Covid-19 cases in Jakarta yesterday.
Company News
1. ISAT IJ with Tri officially signed a merger agreement under the "PT Indosat Ooredoo Hutchison Tbk" name. The merger of the two companies will generate an estimated revenue of USD3 billion per year, Indosat Ooredoo Hutchison will be jointly controlled by the Ooredoo Group with CK Hutchison (CNBC Indonesia). MNCS Comment: The merger makes ISAT the second largest telecommunications operator in Indonesia. The annual run rate of pre-tax is predicted to reach USD300-400 million in the next 3-5 years. Currently ISAT is trading at 3.25x/2.14x PE/PBV levels.
2. ASII IJ is optimistic that sales will continue to increase in line with the extension of the 100% PPnBM relaxation for motorbike vehicles until the end of December-21, previously it was extended to August-21 (Bisnis Indonesia). MNCS Comment: We see that the extension of the 100% PPnBM relaxation until December-21 will increase ASII's car sales and will have an impact on financial performance up to FY21E. Meanwhile, this policy will certainly have a multiplier effect on the automotive industry and can support economic growth which is affected by the pandemic. Currently ASII is trading at 12.43x/1.35x PE/PBV levels.
3. IPCM IJ will budget capex of IDR140 billion in FY22E which will be used for digital investment and the addition of two tugboats. Meanwhile, in FY21E IPCM budgeted IDR95 billion capex with an allocation for the addition of four new fleets in the form of one tugboat and three pilot motors (Bisnis Indonesia). MNCS Comment: We see IPCM's strategy is quite expansive by increasing capex by 47% YoY in FY22E, some of the funds are used for digital investment, with the aim of cost efficiency. It’s potentially to increase the company's margin. IPCM is currently trading at 17.48x/1.92x PE/PBV.
IHSG Updates
JCI rose by +0.38% to 6,133.25 on Friday (17/09) followed by net foreign buy reaching IDR598.28 billion. JCI closed higher in almost all sectors led by the tech sector (+2.90%), and followed by the transportation sector (+2.30%). On the other hand, the energy sector weakened by -1.19% followed by the industrial sector (-0.53%). JCI closed higher in line with the strengthening of several regional indices in Asia, on the one hand investors tend to wait and see the next update regarding the discourse on monetary tightening policy from the FED. On the other hand, the Rupiah strengthened at IDR14,223/ USD level. We estimate the JCI will move in the range of 6,050-6,150. Today's recommendation: BRIS, EXCL, UNTR, WEGE.
Corporate Action
RUPS: BBYB, EPAC
Public Expose: BEBS
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