Global Market Highlight
DJIA slipped by -0.15% on Tuesday (21/09) followed by S&P 500 (-0.08%), while Nasdaq rose by +0.22%. Wall Street closing was mixed, followed by the easing of concerns over slowing global economic growth, especially Asia, regarding the risk of default by China's second largest property company Evergrande Group. On the other hand, the market are waiting for the Federal Reserve's monetary policy decision to be released on Wednesday. The Fed plans to trim its monthly bond purchases worth USD120 billion in the near future. Today the market will be looking forward to several data releases such as: 1) US Existing Home Sales MoM; 2) Eurozone Consumer Confidence Flash; 3) Japan BOJ Rate Decision.
Domestic Update
• Government successfully issued 6 series of sovereign sharia securities and awarded IDR6.1tn from auction on Tuesday (09/21). MNCS Comment: The total awarded value was below the indicative target and the total incoming bids were at IDR45.38tn or below the last 4 auctions which were consistently above IDR50 trillion. Now investors tend to wait and see ahead of the Fed's policy meeting results announcement that is expected to give further detail on tapering issues and considering entailing risk that might emerge due to recent potential default of Chinese 2nd largest property developer, Evergrande.
• Furthermore, there was an addition of 106 new Covid-19 cases in Jakarta yesterday.
Company News
1. ISAT IJ plans to issue 2.62 billion new shares or 32.6% of the merger company shares specially given to PT Hutchison 3 Indonesia (H3I), as part of the merger of the two companies (Emitennews). MNCS Comment: We see the plan for this right issue to accelerate transactions in the merger of the second largest digital telecommunications company in Indonesia. Currently ISAT is trading at 3.32x/2.13x PE/PBV levels.
2. MLPL IJ invests in a podcast platform and auto digital media, Noice. The investment is made by way of equity injection in PT Mahaka Radio Integra Tbk. (MARI) (Bisnis Indonesia). MNCS Comment: We see this investment as part of the company's expansion to improve its digital performance. This is in line with MLPL's goal to become a super holding tech company where management focuses on investing in technology. Currently MLPL is trading at 39.47x/2.06x PE/PBV levels.
3. PGAS IJ cooperates with residential area development companies to expand the construction of household gas networks with a target of 1 million House Connections (SR) per year or reaching 4 million SR by 2024. Currently, the number of gas networks that have been operating is around 560,000 SR in 63 districts/cities in 17 provinces (Bisnis Indonesia). MNCS Comment: We see PGAS doing a lot of business development, especially in optimizing the housing and Pertamina segments which have the potential to increase revenue. PGAS is currently trading at 7.56x/0.82x PE/PBV.
IHSG Updates
JCI weakened by -0.26% to 6,060.76 on Tuesday (21/09) followed by net foreign sell reaching IDR221.68 billion. JCI fell along with the financial sector (-1.01%), followed by the industrial sector (-0.84%). However, the cyclical sector managed to strengthened by +1.46%, followed by the energy sector (+0.62%). The decline in JCI was due to investors' concerns regarding the liquidity crisis of China property developer Evergrande. Subsequently, investors are still waiting for the tapering off decision by the Fed. From the domestic point of view, Bank Indonesia maintains the interest rate at 3.5% level which is considered to be the optimal level to keep the stability of the Rupiah exchange rate, and encourage economic growth. On the other hand, the Rupiah strengthened at IDR14,238 level on the spot market. We estimate the JCI will move in the range of 6,050-6,120 while waiting for BI interest money supply data release. Today's recommendation: ERAA, BEKS, ICBP, AMRT.
Corporate Action
Cum Dividend Date: BSSR (IDR212.55/share), TGKA (IDR35/share)
RUPS: ARTO
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