MNCS Morning Navigator 02 December 2020

Global Market Highlight

DJIA increased by +0.63% on Tuesday (01/12) followed by S&P 500 (+1.13%)  and Nasdaq (+1.28%). The good news about this vaccine has succeeded in promoting optimism due to a surge in the number of Covid-19 case which has doubled in just a month and touched a record high of 4 million cases. This has urged the Senate and Finance minister to discuss  a USD908 billion stimulus package. The stimulus will be channeled to sectors affected by the Covid-19 pandemic, such as small businesses and unemployed. Moreover, the market will look forward to several data releases today, such as: 1) US MBA Mortgage Application; 2) US ADP Employment Change; 3) Germany Retail Sales.

Domestic Update

• The IHS Markit Indonesia Manufacturing PMI rose to 50.6 in November 2020, from 47.8 a month earlier. This was the first growth in factory activity since August following the loosening of large-scale social restrictions in Jakarta in mid-October.
• BPS release an inflation of 0.28% MoM in November 2020 with the Consumer Price Index (CPI) of 105.21.
• Furthermore, the Governor of DKI Jakarta, Anies Baswedan has been tested positive for Covid-19, prompting the city hall to be closed for disinfection. While there is an additional of 1.058 new Covid-19 cases in Jakarta yesterday.

Company News

1.       BBCA IJ will be distributing an interim dividend of IDR2.4 trillion from the net income as of 9M20. Dividend per share stood at IDR98/share or equals to 0.3% yield. Cum date will be at  December 7, 2020. While payment date will be at December 22, 2020 (Market Bisnis). MNCS Comment: BBCA's interim dividend is usually distributed at the end of the year with smaller amount per share. BBCA is currently traded at  4.4x PBV.
2.        MEDC IJ revenues amounted to USD792.89 million in 9M20 which decreased by 18.27% YoY. The majority of revenue still comes from the oil and gas sales segment amounting to USD 678.35 million, sales of electric power and other related services of USD111.93 million and revenue from services of USD2.60 million. The net loss managed to shrink from the previous quarter to USD34 million in 9M20 (Market Bisnis). MNCS Comment: Management stated that the bottom line is affected by dry-hole deepwater drilling in Mexico, low gas prices, and continued low electricity demand at the Medco Power venture. While we see that the net income from MEDC's metal mining entity has managed to offset the supported by the increase in gold and copper prices. MEDC is currently traded at 0.57x PBV.
3.        KRAS IJ revenue decreased by -10.85% YoYto USD938.79 million in 9M20.On the other hand, this state-owned steel company posted a decrease in expenses such as Cost of revenue (-17% YoY) and operating expenses (-40.88% YoY). So, KRAS managed to minimize their net loss to USD27.39 million in 9M20(Market Bisnis).MNCS Comment: KRAS' business sector is one of the most affected by the pandemic but due to the efficiency implemented, KRAS' performance managed to slowly recover. KRAS is currently traded 63.37x/1.12x PE/PBV.

IHSG Updates

JCI rose by +2.00% to 5,724.74 on Tuesday (01/12) though followed by net foreign sell reaching IDR684.06 billion. JCI rebounded after a previous drop due to positive data releases, despite the Governor's positive Covid-19 result. All sectors rise with miscellaneous, basic and finance strengthened the most which we believe as a start of window dressing. Meanwhile, the Rupiah exchange rate was weakening at IDR14,130. We estimate JCI will move in the range of 5,563 – 5,798 while waiting for foreign exchange reserve data release. Today's recommendation: JSMR, GGRM, IMAS, BBRI.

Corporate Action

RUPS: SCNP

Cum Dividend Date: IFII (IDR3/share), DMAS (IDR25/share)

Disclaimer On

JSMR, GGRM, IMAS, BBRI, BBCA, MEDC, KRAS