Global Market Highlight
DJIA fell by 0.60% on Tuesday (06/07) Followed by S&P 500 (-0.20%), while Nasdaq rose by +0.17%. The Wall Street closing was mixed as a decline in the financial sector. While the US service industry activity grew quite significantly in June, however, it was still hampered by the availability of labor and raw materials. The market will look forward to several data releases today, such as: 1) US MBA Mortgage Applications; 2) UK Labour Productivity QoQ Final; 3) Japan Coincident Index Prel
Domestic Update
• Government has conducted auction for debt securities for series SPN12211007 (reopening), SPN12220707 (new issuance), FR0090 (new issuance), FR0091 (new issuance), FR0088 (reopening), FR0092 (new issuance) and FR0089 (reopening) yesterday. Total incoming bids were IDR83.4 trillion. Total amount awarded from the seven series offered was IDR34 trillion. MNCS comment: The total amount awarded from yesterday's auction was higher than the indicative target and previous auction at IDR30 trillion respectively. Newly issued government bonds for series FR0090 (5 year tenure), FR0091 (10 year tenure) and FR0092 (15 year tenure) contributed 86% from total incoming bids. Higher incoming bids than the last auction IDR83.4 trillion vs IDR69.9 trillion) indicated high investors' appetite for saver yielding assets relative to equities amid surging Covid-19 & emergency social restriction implementation.
• Furthermore, there was an addition of 9,439 new Covid-19 cases in Jakarta yesterday.
Company News
1. MTDL IJ through its subsidiary PT Mitra Integrasi Informatika (MII) launched KOMI (BI-FAST System MII Converter) in collaboration with Software AG and Red Hat. KOMI is a solution with a focus on customer experience and data analytics. This program is an initiative of Bank Indonesia to help banks in Indonesia to connect BI-FAST Connector with Core Banking and Channel (ATM, Teller, Internet Banking, Mobile Banking) using messaging ISO 20022 (Investor Daily). MNCS Comment: This development can be used to support the integration of Indonesian banking in the digital era. MTDL targeted 8% revenue growth YoY and net profit of 10% YoY in FY21E with software and solutions business contributing ~28%. Currently MTDL is trading at 10.50x/2.08x PE/PBV levels.
2. BRPT IJ is currently focusing on running the Java 9 Steam Power Plant (PLTU) and PLTU Jawa 10 projects with an investment value of around USD3.3 billion. This project has a capacity of 2x1,000 megawatts (MW) with a completion target by 2025. BRPT allocates capex of USD175 million in FY21E which will be used for operational maintenance of the TPIA plant and Star Energy Geothermal drilling activities (Kontan). MNCS Comment: We see that BRPT has recently issuing bond to support its capex. We hope this will improve their performance as their 1Q21 bottom line increased tremendously from a loss in 1Q20. Currently BRPT is trading at 30.78x/3.98x PE/PBV levels.
3. MNCN IJ managed to achieve the highest audience share in the national television industry since becoming the Official Broadcaster of UEFA EURO 2020, with the performance of iNews achieving an audience share of 21.71% and placing iNews in second position after RCTI in the national TV industry program in the Euro 2020 slot (IQ Plus). MNCS Comment: MNCN success in gaining audience share is supported by the ownership of two national FTAs with large market shares. We believe that ad spend will incrase 7.5%-10% YoY in FY21E, inline with management target. Currently MNCN is trading at 8.34x/0.88x PE/PBV levels.
IHSG Updates
JCI rose by +0.69% to 6,047.11 on Tuesday (06/07) while net foreign sell reaching IDR176.53 billion. JCI closing was higher along with most sectors, led by tech (+3.02%), followed by basic industry (+2.58%). On the other hand, finance sector weakened by -0.26% followed by infrastructure (-0.09%). JCI closed higher in line with the strengthening of the index in the majority of Asian countries. Even from within the country, after the government gave a projection that economic growth could slow down if the spread of Covid-19 could not be contained this month, market participants would be more cautious. Meanwhile the Rupiah exchange rate was strengthening at IDR14,470. We estimate the JCI will move in the range of 5,913-6,134 while waiting for foreign exchange reserves data MoM release. Today's recommendation: BANK, ANTM, PGAS, AALI.
Corporate Action
Public Expose: GEMA, PAMG
Disclaimer On
PT MNC Sekuritas
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