Indonesia Market Today - 11 February 2021

A. INDONESIA MORNING MARKET REVIEW

(Fri, 11 Feb 2021).

DJIA rose by +0.20% on Wednesday (10/02) followed by the drop on S&P 500 (-0.03%) and Nasdaq (-0.25%). Wall Street closed varies as investors digested the latest wave of quarterly results from corporates and Fed`s comment of the need for accommodative monetary policy at a time. Powell signaled it was important to keep the monetary stimulus spigot open. This means that the Fed will not tighten monetary policy solely in response to a strong labor market. The remarks come as data showed core inflation in January was 0%, falling short of expectations for a 0.2% increase. Moreover, the market will look forward to several data releases today, such as: 1) US Initial Jobless Claims; 2) US FY21E Budget Plan; 3) US Monthly Budget Statement.

Domestic Update

• Retail sales in Indonesia plunged by 19.2% YoY in December 2020, after decreasing by 16.3% YoY a month earlier. This marked the thirteen straight month of fall in retail trade, and the steepest pace since May, amid the prolonged impact caused by the COVID-19 crisis that made people stay at home most of their time.

• Furthermore, there was an addition of 3,309 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI increased by +0.33% to 6,201.83 on Wednesday (10/02) followed by net foreign buy reaching IDR280.65 billion. JCI rebounded slightly as foreign investors chipped in as Chinese New Year approach on Friday. All sectors increased except for basic industry and agriculture sectors due to the weakening on CPO stocks. Meanwhile, the Rupiah exchange rate was strengthening at IDR13,982. We estimate JCI will move in the range of 6,018 – 6,280 while waiting for Balance of Trade and Consumer Confidence data Release.

B. INDONESIA CORPORATE NEWS

1. BTPS IJ

Recorded disbursement of financing in FY20 of IDR9.5 trillion or a growth of 6% YoY (vs IDR9 trillion FY19). NPF was recorded at the level of 1.9% while CAR was at the position of 49.4%. On the other hand, third party funds (DPK) grew 4% YoY to IDR9.8 trillion (vs IDR9.4 trillion FY19). So that BTPS posted net profit after tax (NPAT) of IDR855 billion.

The pandemic situation depressed BTPS`s bottom-line performance by 38% YoY. BTPS services in the sharia micro segment are still under pressure due to restrictions on activities in several areas. Currently BTPS is trading at 38.33x/4.67x PE/PBV.

2. INCO IJ

Is still continuing exploration activities for January 2021 and is focused on areas in the Contract of Work. INCO`s exploration areas include the Sorowako Block and the Sorowako Outer Area in East Luwu Regency, South Sulawesi and the Bahodopi Block in Morowali Regency, Central Sulawesi and the Pomalaa Block in Kolaka Regency, Southeast Sulawesi. INCO spent USD568 million with an exploration method using the HQ-3 core drilling method.

We hope that the exploration activities for the rest of the year would run effectively. Exploration budget for FY21E has not been informed but we believe it won`t stray far from last year`s budget of USD6 million. INCO is currently trading at 39.29x/1.99x PE/PBV.

3. WIKA IJ

Received new contracts worth IDR1.4 trillion throughout January 2021 by achieving 3.48% of the target value of new contracts set for FY21E worth IDR40.12 trillion. Some of the new contracts obtained were the Kretek 2 Bridge project in Yogyakarta valued at IDR364.4 billion and the construction of official homes for Indonesian Army soldiers worth IDR603.35 billion.

We consider this achievement to be quite good, and provide an illustration of the potential for new contract growth in FY21E. WIKA is trading at 266.73x/1.32x PE/PBV.

C. STOCK WATCHLIST

EXCL, JPFA, BBRI, MEDC.

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