09 Juni 2020
MNCS Morning Navigator 09 June 2020
Global Market Highlight
DJIA rose by +1.70% on Monday (08/06) followed by the increase of S&P 500 (+1.20%) and Nasdaq (+1.13%). These increases were due to optimism on the lockdown easing while New York City, which was once the center of the Covid-19 spread was officially reopened last Monday. Reservations at various restaurants have build up, hotel occupancy levels have increased, and the streets are starting to get crowded with vehicles. The market will look forward to several data releases today, such as: 1) Eurozone GDP Growth per May-2020; 2) US Wholesale Inventories per May-2020; 3) France Balance of Trade per May-2020.
Domestic Updates
BI released the foreign exchange reserve which amounted to USD130.5 billion as of May 2020. The number increased 2.03% MoM from USD127.9 billion in April 2020. The foreign exchange reserves are equivalent to 8.3 months of imports. The increase in foreign exchange reserves in May 2020 was mainly affected by the withdrawal of Government foreign debt and the placement of foreign exchange banking at Bank Indonesia. While, Bank Indonesia stated that foreign exchange reserves are able to support the resilience of the external sector and maintain macroeconomic and financial system stability.
Company News
-
PGAS IJ has signed a gas pricing commitment with 188 industrial customers, following a Minister of Energy and Mineral Resources (ESDM) Decree to reduce the price of industrial gas. Management said that currently his party is completing the technical agreement and Letter of Agreement (LoA) with the upstream gas producers. After the technical agreement and the LoA are completed, PGAS can start to reduce gas prices for industrial customers in six business sectors (glass, ceramics, steel, oleochemical, petrochemical, and rubber glove manufacturing). (IDNFinancials) MNCS Comment: This price agreement will have a short-term impact in strengthening PGAS price. Though we must first observe on how the industry survives the pandemic situation. PGAS is traded at 38.65x/0.75x PE/PBV.
-
WIKA IJ will distribute IDR457 billion of dividends with 20% payout ratio on FY20. Dividend per share stood at IDR50.95/share which makes dividend yield at 3.66%. While WIKA also changed the board directors at the RUPS on June 8, 2020. (Market Bisnis) MNCS comment: The 20% Dividend Payout Ratio is still good news considering the uncertainty impact caused by Covid-19 pandemic in the construction sector. WIKA is traded at 5.46x/0.76x PE/PBV, lower than peers.
-
LPCK IJ posted revenue of IDR1.66 trillion in FY19 which dropped by 21.69% YoY compared to IDR2.12 trillion in FY18. Revenue from Sales of Residential Houses and Apartments contributed IDR825.13 billion, followed by Industrial Land Sales at IDR366.89 billion, City Management at IDR338.63 billion, Sales of Commercial Land and shops at IDR134.50 billion, and rental income at IDR29.63 billion. Due to the climb in cost of revenue by 16.10% YoY, net profit decreased by 84.15% YoY to IDR310.91 billion in FY19. (Kontan) MNCS Comment: The 2019 election was one of the causes for investors to hold property purchases during the year. LPCK is traded at 2.54x/0.21x PE/PBV, lower than peers.
IHSG Updates
JCI increased by +2.48% to 5,070.56 on Monday (08/06) despite a net foreign sell reaching IDR43.9 billion. The index movement was in line with the increases on the Regional Asia and Global Indices which was still due to the optimism towards the new normal and the lockdown transition in several cities, despite the new record on 993 additional Covid-19 cases reaching 30,514 positive cases. Furthermore, the release of foreign exchange reserves also supported the index movement. Meanwhile, the Rupiah exchange rate against the USD was flat at IDR13,885. We estimate JCI will move in the range of 4,970-5,112 while waiting for Retail Sales as of Apr-2020. Today's recommendation: LSIP, INCO, WTON, BBNI.
Corporate Action
Recording Date: ITMG
RUPS: FIRE, SCCO
Disclaimer On
LSIP,
INCO,
WTON,
BBNI,
PGAS,
WIKA,
LPCK
