Global Market Highlight
DJIA rose by +0.09% on Tuesday (24/08) followed by S&P 500 (+0.15%), and Nasdaq (+0.52%). Wall Street ended higher as The Food and Drug Administration's full approval of the Pfizer-BioNTech COVID-19 vaccine on Monday fueled optimism over economic recovery which spilled into Tuesday's session. Subsequently, investors are looking at the horizon of the Federal Reserve’s annual economic symposium on Friday. Today the market will be looking forward to several data releases such as: 1) US Durable Goods Orders MoM; 2) US MBA Mortgage Applications; 3) Germany Ifo Business Climate.
Domestic Update
• Government has conducted auction for Sovereign Sharia Securities on Tuesday August 24, 2021, for series SPNS12022022 (reopening), PBS031 (reopening), PBS032 (reopening), PBS030 (reopening), PBS029 (reopening) and PBS028 (reopening) with the total awarded amount of IDR9 tn. MNCS Comment: The awarded value was IDR1tn lower than indicative targets. However we see that the appetite remained high despite there is a signal from the Fed to taper asset purchases by the end of 2021 or early 2022. This can be seen from the incoming bids of IDR52.5tn or IDR0.81tn higher than the previous auction. Limited U.S. treasury yield amid ongoing concern of tapering has played a role in maintaining domestic government bond yield from rising to a significant magnitude.
• Furthermore, there was an addition of 484 new Covid-19 cases in Jakarta yesterday.
Company News
1. MEDC IJ plans to buy back 190 million shares starting August 26, 2021 - February 26, 2023 with a fund of IDR130.5 billion (Bisnis Indonesia). MNCS Comment: We see that the buyback shares will equal to 0.8% of the paid in capital. The purpose is to maximize returns to shareholders along with the expansion of the company's business. Currently MEDC is trading at 40.67x/0.75x PE/PBV levels.
2. MIKA IJ plans to buy back 83 million shares starting August 23, 2021 - November 22, 2021 with a fund of IDR200 billion. The share purchase price is limited to a maximum of IDR2,400/share (Emitennews). MNCS Comment: This buyback action will use the company's internal cash without requiring additional funds. This corporate action will affect the company's ROE, which is currently at the level of 22.14%. Currently MIKA is trading at 26.02x/5.76x PE/PBV levels.
3. BALI IJ will distribute FY20 cash dividends of IDR30/share or IDR118.03 billion from FY20 net profit of IDR84.40 billion and FY19 retained earnings of IDR42.08 billion. Cum date schedule on August 30, 2021 (IQ Plus). MNCS Comment: BALI's dividend payout ratio is 139.84% of the total FY20 net profit, while the total dividend yield offered is 3.85%. Currently BALI is trading at 18.11x/1.30x PE/PBV levels.
IHSG Updates
JCI weakened by -0.33% to 6,089.50 on Tuesday (24/08) followed by net foreign sell reaching IDR24.67 billion. Asia stocks index closed higher than JCI index due to profit taking by market participants after the price in trade on the previous day. Furthermore, most sectors weakened led by the energy sector (-1.49%) followed by the infrastructure sector (-1.43%). Meanwhile, the technology sector strengthened by +2.49% followed by the transportation and logistics sector (+2.05%). Rupiah strengthening +0.14% at IDR14,393/USD in the spot market. We estimate the JCI will move in the range of 6,050-6,120. Today's recommendation: AMRT, INDF, BEKS, AGRO.
Corporate Action
Cum Dividend Date: HRTA (IDR/8share), SGER (IDR/4share), BNBA (IDR/4share)
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