Global Market Highlights
DJIA weakened by -0.34% on Tuesday (12/10) followed by S&P 500 (-0.24%) and Nasdaq (-0.14%). Wall Street slipped as investors worry that rising prices are exacerbating supply bottlenecks and inflation pressures, thus weighing on businesses and crimping global economic growth as the IMF cuts growth expectations to 5.9% in 2021, lower than the July forecast. On the other hand, The UK released its Employment Change data which rose to 235,000 in July-21 from previously at the level of 183,000 in June-21. On the other hand, ZEW Economic Sentiment Index in Europe fell to 21 in October-21 from previously at the level of 31.1 in September-21. Today the market will be looking forward to several data releases such as: 1) US Core Inflation Rate YoY; 2) UK GDP YoY; 3) Germany Inflation Rate YoY Final.
Domestic Update
• Government has successfully issued 7 series of debt securities and raised IDR8tn from auction yesterday. The total incoming bids were at IDR50.15 trillion. MNCS Comment: The total incoming bids in the primary market of government bond issuance has decreased recently. In our opinion this was driven by a lower indicative target set by the government and not by decreasing investors' appetite. As we have expected, weighted average yields in the primary market slightly increased compared to the previous auction. Cumulatively, the total incoming bids for FR0090, FR0091, and FR0092 was the largest in yesterday's auction indicating high investors' appetite towards next year's benchmark for the Indonesia GB series.
• Furthermore, there was an addition of 143 new Covid-19 cases in Jakarta yesterday.
Company News
1. ASII IJ successfully increased car sales in 9M21 by +78.87% YoY to 343,837 units (vs 192.217 units in 9M20). This figure surpassed full sales in FY20 of 270,076 units. ASII’s LCGC sales increased by +50.02% YoY to 85.111 units in 9M21 (vs 56.733 units in 9M20) (Kontan). MNCS Comment: We see an increase in sales driven by the extension of the PPnBM relaxation until the end of the year. Hopefully the stimulus in PPnBM might affect increasing consumer interest and encouraging national economic growth. ASII is currently trading at level 13.47x/1.46x PER/PBV.
2. MAIN IJ through its subsidiary, PT Malindo Food Delight, in collaboration with the halal culinary diaspora in Japan by re-exporting 6 tons of Sunny Gold products such as nuggets and karaage to Japan (Marketbisnis). MNCS Comment: We see MAIN’s exports to Japan have continued since early 2021, aimed at developing business and competing with the global market. MAIN is committed to supporting the GRATIEKS program by the Indonesian Ministry of Agriculture to develop export opportunities globally. MAIN is trading at the level of 7.14x/0.87x PER/PBV.
3. ADMF IJ delivered a new financing disbursement of IDR11.8 trillion in 1H21. Total new financing for ADMF motorcycles in 6M21 was IDR5.2 trillion, grew by +11% YoY. Then, the total new financing for ADMF cars reached IDR4.5 trillion in 6M21 rose by +27.5% YoY (Emitennews). MNCS Comment: We assess the increase in demand for credit disbursement due to the relaxation of PPnBM vehicles and the economic condition that is starting to recover, thus providing benefits for ADMF financing companies. Currently, ADMF is trading at level 8.40x/1.00x PER/PBV.
IHSG Updates
JCI strengthened by +0.41% to 6,486.27 on Tuesday (12/10) while net foreign sell reaching IDR428.62 billion. JCI closed higher in almost all sectors, led by the health sector (+1.41%), followed by the property sector (+1.15%). On the other hand, the tech sector weakened by -3.26%, followed by the basic industrial sector (-0.34%). The strengthening of the JCI was driven by the market optimism over the increase in a number of commodities such as coal, oil, and tin, followed by a significant decline in the addition of Covid-19 cases in Indonesia. On the other hand, the Rupiah weakened at IDR14,218 level on the spot market. We estimate the JCI will move in the range of 6,400-6,500. Today's recommendations: TINS, DOID, ELSA, ACST.
Corporate Action
Cum Dividend Date: NELY (IDR10/share)
Cum Right Issue Date: BRMS (IDR70/share)
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