Global Market Highlights
DJIA weakened by -0.81% on Wednesday (08/06), followed by the S&P500 (+0.95%) and the Nasdaq (+0.94%). Negative sentiment came from the OECD which cut its global growth outlook to 3% from 4.5% in FY22E. Investors were also worried about the inflation rate in line with the continued rise in global oil prices. Meanwhile, pressure also came from the yield on the US T-note 10Y which rose to 3.02%.Today, the market will be looking toward several data releases such as: 1) US Continuing Jobless Claims; 2) US EIA Natural Gas Stocks Change; 3) UK BBA Mortgage Rate.
Domestic Update
• Bank Indonesia released Indonesia's foreign exchange reserves (cadev) in May-22 of USD135.6 billion, or decreased by USD100 million from Apr-22. MNCS Comment: Cadev's position is influenced by oil and gas foreign exchange receipts, taxes and the need for external debt payments. In the midst of rising risks of global monetary tightening, we view that the reserve position is still able to support IDR fundamentals.
• Furthermore, the second dose of vaccination rate nationally has reached 80.6% or equivalent to 167.86 million people.
Company News
1. WSKT IJ recorded an additional new contract value of IDR517 billion through the rehabilitation, improvement and modernization project for the Citarum River irrigation network in Subang and Karawang (Kontan). MNCS Comment: Up to 5M22, the company has posted contract of IDR7.99 trillion or reached ~27% of the 2022 contract target of IDR30 trillion. Currently, WSKT is trading at the level of 1.51x PBV.
2. BIRD IJ has prepared a capex allocation of IDR1.2 trillion this year, which is prioritized for the procurement of 5,000 new fleet units (Market Bisnis). MNCS Comment: The capex budget increased +140% YoY from last year's target of IDR500 billion. It is hoped that the capex allocation can improve the company's performance, where in 1Q22 the company managed to record a net profit of IDR47.14 billion from a net loss of IDR28.25 billion in 1Q21. Currently, BIRD is trading at 21.76x/0.81x PER/PBV.
3. DMAS IJ will distribute a cash dividend of IDR120.49 billion or equivalent to IDR2.5 per share, after previously distributing an interim dividend of IDR12 per share. The accumulated dividend as a whole is IDR698.87 billion (Investor). MNCS Comment: With this, DMAS will offer a dividend yield of 1.42%, and a payout ratio of 98% of the FY21 net profit of IDR714.86 billion. Currently, DMAS is trading at the level of 1.48x PBV.
IHSG Updates
JCI strengthened by +0.73% to 7,193.31 on Wednesday (08/06), followed by net foreign buy which reached IDR565.96 billion. A number of sectors strengthened and supported the index, led by the technology sector (+2.17%) followed by the infrastructure sector (+1.50%). On the other hand, the sector that experienced weakness was led by the transportation sector (-2.05%) followed by the energy sector (-1.45%). The index's strengthening was in line with Wall Street and Asian bourses. Investors watching the release of foreign exchange reserve data in May-22 which remained solid although it decreased by USD100 million to USD135.6 billion (vs USD135.7 billion in Apr-22). On the other hand, the Rupiah exchange rate closed lower at 14,493/USD. We estimate that the JCI will move in the price range of 7,060-7,233 pending the release of Consumer Confidence MAY data. Today's recommendation: ACES, BBRI, PGAS, WEGE.
Corporate Action
Cum Dividend: GEMS (IDR297.39/share), GHON (IDR100/share), SILO (IDR19.3/share)
Disclaimer On
