Global Market Highlights
DJIA rose +0.44% on Friday (25/03), followed by the S&P 500 (+0.51%), while the Nasdaq (-0.16%). Wall Street closed mixed with the negative catalyst coming from US T-note 10Y yield that jumped to 2.5%, suppressing the strengthening of Wall Street. The positive catalyst came from the rising crude oil prices and the release of labor data with the unemployment rate expected to fall to 3.7%. Today, the market will be looking toward several data releases such as: 1) US Goods Trade Balance Adv; 2) US Retail Inventories Ex Autos MoM Adv; 3) US Dallas Fed Manufacturing Index.
Domestic Update
• Indonesia’s International Investment Position (IIP) recorded a net liability totaling USD278.6 billion in 2021 (23.5% of GDP), down from USD280.0 billion (26.4% of GDP) at the end of 2020. MNCS Comment: The lower net liability was driven by a USD26.5 billion (6.6% yoy) increase in the FFA, dominated by other investment assets and reserve assets, which outpaced the USD25.1 billion (3.7% yoy) gain on the FFL side, primarily from direct investment and portfolio investment liabilities.
• Furthermore, the second dose of vaccination rate nationally has reached 75.7% or equivalent to 157.70 million people.
Company News
1. TAPG IJ recorded a +19.2% YoY sales increase to IDR6.28 trillion in FY21 (vs IDR5.27 trillion in FY20). Meanwhile, net profit was recorded at IDR1.16 trillion, up +27.2% YoY in FY21 (vs IDR911.07 billion in FY20) (Kontan). MNCS Comment: We see that this increase was supported by the increase in CPO and PK prices by 12% YoY and 64% YoY, respectively. In addition, the company is optimistic that it can increase production in FY22E along with the plant's age that is still productive with an average of 11.3 years as of 31 Dec-21. TAPG is trading at the level of 12.50x/1.93x PER/PBV.
2. WOOD IJ plans to buy back shares on 25 Mar-22 to 24 June-22 with a maximum value of IDR100 billion, or equal to 121.9 million shares. MNCS Comment: We see that this buyback action is expected to stabilize prices in volatile market conditions. The company estimates that this won’t have any impact on the company's revenue, considering that the action is financed with internal cash. WOOD is trading at the level of 10.13x/1.42x PER/PBV.
3. ZYRX IJ targets sales increase of minimum +30% YoY in FY22E. This is supported by the potential of significant demand increase for Zyrex laptop products, especially from the commercial sector (Kontan). MNCS Comment: We see that the company's optimism is also supported by the Domestic Content Level and Corporate Benefit Weight of the company's products which are more than 40%. ZYRX is trading at the level of 13.83x/4.63x PER/PBV.
IHSG Updates
JCI weakened -0.67% to 7,002.53 on Friday (25/03), followed by net foreign buys which reached IDR1.22 trillion. Almost all sectors experienced weakness, led by the infrastructure sector (-1.64%) followed by the technology sector (-1.17%). On the other hand, the transportation sector strengthened (+0.88%). The index corrected after investors looked back at the data on the US employment market which was gradually recovering. This suggests that the Fed could raise its benchmark interest rate more aggressively amidst global market uncertainty over geopolitical tensions that are heating up between Russia and Ukraine, sparking concerns for market players. On the other hand, the Rupiah exchange rate closed lower at IDR14,347/USD. We estimate that the JCI will move in the price range of 6,955-7,030. Today’s recommendation: TKIM, MYOR, TOWR, MAPA.
Corporate Action
RUPS: PANI, ARMY
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