Global Market Highlights
DJIA rose +0.80% on Friday (18/03), followed by the S&P 500 (+1.17%) and the Nasdaq (+2.05%). Wall Street continued its gains driven by technology stocks from China, following the news that the Chinese government's stimulus policies could be a positive catalyst for these stocks. Investors also positively welcomed the increase in the benchmark interest rate which was in line with the expectations of market participants, to combat high inflation rates in line with rising energy commodity prices triggered by the Russia-Ukraine geopolitical crisis. Today, the market will be looking toward several data releases such as: 1) US Chicago Fed National Activity Index; 2) US 6-month Bill Auction; 3) Germany PPI YoY.
Domestic Update
• Bank Indonesia (BI) recorded e-money transactions grew 41.35% YoY to IDR21.7 trillion while digital banking transactions jumped 46.53% YoY to IDR3,733 trillion in Feb-22. From January to February 2022, e-money transactions hit IDR61.7 trillion and digital banking transactions reached IDR8,047 trillion. MNCS Comment: Rising e-money and digital banking transactions indicate higher penetration and adoption among consumers as it is mostly preferred payment. This is also in line with policy makers' support to transform domestic payment policy towards cashless society.
• Furthermore, the second dose of vaccination rate nationally has reached 73.9% or equivalent to 153.83 million people.
Company News
1. WIKA IJ recorded new contracts of IDR6.1 trillion until the end of Feb-22, or up +128.46% YoY (vs IDR2.67 trillion at the end of Feb-21). The company's acquisition of new contracts came from Infrastructure & Building Projects 62%, Realty & Property 3%, Industry 17%, Energy & Industrial Factory 18%. MNCS Comment: We see that with this positive achievement, the company is optimistic that it might achieve its new contract target of IDR42.57 trillion in FY22E, supported by the acceleration of national infrastructure development by the government along with economic recovery. WIKA is trading at the level of 0.69xPBV.
2. SSMS IJ targets the company's CPO production increase of +6% to +8% or 566,265 tonnes in FY22E. Meanwhile, the CPO sales target is estimated at IDR5.47 trillion (Bisnis Indonesia). MNCS Comment: We see that with the age of the plantations that are still productive and through the application of technology, the company can increase its productivity and performance in FY22E. SSMS is trading at the level of 7.58x/1.85x PER/PBV.
3. SIDO IJ targets the export contribution to reach 5% of the company's total sales in FY22E. As for FY21, the export contribution was still below 3% with the main contributors coming from Nigeria and Malaysia (Kontan). MNCS Comment: We see that the company is optimistic that it might achieve its target supported with the company's strategy to expand its market to Southeast Asia and West Africa in FY22E. SIDO is trading at the level of 24.74x/8.99x PER/PBV.
IHSG Updates
JCI weakened -0.14% to 6,954.96 on Friday (18/03), followed by net foreign buys which reached Rp78.01 billion. The sectors that led the JCI weakening were the property sector (-1.42%) followed by the infrastructure sector (-0.67%). On the other hand, the sector that experienced strengthening was led by the transportation sector (+1.62%) followed by the energy sector (+1.25%). Investors seem to continue taking profit by observing the weakening of commodity prices, especially coal. In addition, the projection of US economic growth in 2022, which was revised by the Fed to 2.8% from 4%, is said to provide negative exposure to the global market, which worries investors for the economic slowdown. On the other hand, the Rupiah exchange rate closed lower at IDR14,388/USD. We estimate that the JCI will move in the price range of 6,900-7,000. Today’s recommendation: ANTM, INKP, WIKA, PTBA.
Corporate Action
IPO: BIKE (IDR170/share)
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