Indonesia Market Today - 3 February 2021
A. INDONESIA MORNING MARKET REVIEW
Global Market Highlight
DJIA increased by +1.57% on Tuesday (02/02) followed by S&P 500 (+1.39%) and Nasdaq (+1.56%). Wall Street rallied on Tuesday, supported by signs of easing in Covid-19 pandemic as infections remained below 150,000 for the fifth day in a row. While mostly positive earnings supported investor sentiment on stocks. Financials, mostly banks, led the move higher, underpinned by rising US government bond yields. Moreover, the market will look forward to several data releases today, such as: 1) US ISM Non-Manufacturing PMI; 2) Eurozone Core Inflation Rate; 3) China Caixin Composite PMI.
Domestic Update
• The Minister of Finance is optimistic that Indonesia`s economy in 2021 will grow by 5% YoY. This is supported by: 1) Estimated global economic growth at 5%; 2) Uncertainty decreases as global liquidity increases; 3) Release of economic data indicating recovery; 4) Controlled inflation in the range of 1% - 3%. The prospect of recovery will be heavily influenced by vaccinations and the implementation of Covid-19 protocol.
• Furthermore, there was an addition of 3,362362 new Covid-19 cases in Jakarta yesterday.
IHSG Updates
JCI dropped by -0.39% to 6,043.84 on Tuesday (02/02) followed by net foreign sell reaching IDR543.04 billion. JCI dropped again after a significant increase earlier this week, we see that there is not enough positive catalyst to boost the market while Covid-19 cases in Indonesia have become the highest in Asia, topping India. Furthermore, consumer and basic industry still strengthened whereas mining, agri and property fell the deepest. Meanwhile, the Rupiah exchange rate was weakening at IDR14,025. We estimate JCI will move in the range of 5,920 – 6,280 while waiting for GDP Growth Rate data Release.
B. INDONESIA CORPORATE NEWS
1. LPPF IJ
Recorded a net loss of IDR823 billion in FY20 (vs net profit of IDR1.37 trillion FY19). Sales were recorded at IDR 8.59 trillion or -52.4% YoY, (vs IDR18.04 trillion FY19). LPPF has closed 25 outlets in FY20. So that the total outlets are currently recorded at 147 outlets. Meanwhile, the LPPF has issued a capital expenditure of IDR172 billion FY20.
The LPPF`s performance was under pressure amidst the pandemic, so outlet closings were one of the efficiency strategies to survive. Future PSBB easing has the potential to increase traffic and SSSG. Currently LPPF is trading at 3.86x PBV.
2. SMBR IJ
Targets sales to increase by more than 5% in FY21E or in line with the projected growth rate of national cement sales. In FY20, SMBR posted cement sales of 1.93 million tons and 34,000 tons of white cement (white clay). The realization was down 8.53% YoY (vs 2.11 million tonnes FY19). With a sales target of more than 5%, it is estimated that SMBR sales will reach more than 2.02 million tons, or still below sales realization in 2019.
We estimate that the resumption of infrastructure projects will contribute to the increase in cement sales in 2021. SMBR is currently trading at 2.55x PBV.
3. WIKA IJ
Has paid off its global bond, Komodo Bond which was issued on the London Stock Exchange`s International Securities Market (ISM) in 2018 amounting to IDR5.4 trillion with a tenor of 3 years and a coupon of 7.7% per year. 67% of Komodo Bond`s investor profile comes from Asia, 13% from Europe and the Middle East, 10% from the United States and 10% from domestic investors. The funds obtained will be used for investment and infrastructure development in Indonesia.
WIKA`s ability to restructure maturing debts is quite good, even though the construction sector has not yet returned to a comfortable business climate. WIKA is trading at 255.34x/1.26x PE/PBV.
C. STOCK WATCHLIST
AKRA, ELSA, LSIP, WSKT.
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