MNCS Morning Navigator

08 September 2022

MNCS Morning Navigator September 8, 2022

Global Market Highlights
DJIA rose by +1.40% on Wednesday (07/09), followed by S&P500 (+1.83%) and Nasdaq (+2.14%), Wall Street rebounded as US T-note yields fell to level 3, 27%. Positive comments from the Cleveland Fed stating that there is no economic recession in its projections also contributed to the index's pace. Today, the market will be looking toward several data releases such as: 1) US Continuing Jobless Claims; 2) France Balance of Trade Jul; 3) Japan Eco Watchers Survey Outlook Aug.

Domestic Update
Bank Indonesia (BI) recorded that Indonesia's foreign exchange reserves were stable at USD132.2 billion in August 2022. MNCS Comment: Factors affecting the position of foreign exchange reserves: 1) tax and service revenues; 2) oil and gas foreign exchange earnings & 3) the need for IDR stabilization. The foreign exchange reserve position is equivalent to financing 6.1 months of imports or 6.0 months of imports and servicing of government foreign debt.
Furthermore, the national Covid-19 daily rate had increased by 3,513 active cases (07/09).

Company News
1. ADRO IJ targets the FY22E coal production target to reach 58-60 million tons. The company also ensures to stay focused on efficiency and operations (Business Market). MNCS Comment: In 1H22, the company's production and sales volume grew +5.74% YoY/+6.67% YoY respectively. Meanwhile, the realization of the FY22E target has reached 46-48%. ADRO is currently traded at the level of 3.56x/1.70x PER/PBV.
2. WTON IJ recorded the acquisition of new contract values up to 8M22 reaching IDR4.19 trillion. The project portfolio includes: infrastructure 66.49%; property sector 15.60%; energy sector 12.58%; and others 5.33% (Emiten News). MNCS Comment: New contract value increased by +27.74% YoY. With the target in FY22E reaching IDR7.35 trillion, the realization up to 8M22 is 57.01%. We are optimistic that the company can achieve this target in line with the potential to receive high new contract values in 4Q. Currently, WTON is traded at the level of 16.79x/0.59x PER/PBV.
3. BNLI IJ posted an increase in net interest income in 1H22 by +6.7% YoY. Meanwhile, net profit increased significantly by +123.7% YoY (Emiten News). MNCS Comment: This positive achievement was supported by BOPO efficiency -11.8% YoY, credit growth +11.4% YoY and a decrease in provision costs -34% YoY. BNLI is currently traded at the level of 1.19x PBV.

IHSG Updates
JCI weakened by -0.64% to 7,186.76 on Wednesday (07/09), followed by net foreign buy which reached Rp672.83 billion. Almost all sectors weakened and weighed on the index, led by the infrastructure sector (-1.58%) followed by the energy sector (-1.36%). On the other hand, the only sector that experienced strengthening was the raw materials sector (+0.31%). The index weakened amid the release of data on foreign exchange reserves in Aug-22 which was solid at USD132.2 billion. We see the index weakening as investors tend to wait and see ahead of the Fed's Beige Book reading, where it is likely that the Fed will continue its aggressive FFR hike of +75 bps. On the other hand, the Rupiah exchange rate closed lower at IDR14,918/USD. We estimate that the JCI will move in the price range of 7,150-7,220 pending the release of Consumer Confidence Aug data. Today's recommendation: ASII, BEBS, CPRO, GJTL.

Corporate Actions
Public Expose: DAYA

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