Global Market Highlights
DJIA rose by +1.09% on Friday (15/10) followed by S&P 500 (+0.75%) and Nasdaq (+0.50%). Wall Street closed higher as big financial institutions provided a strong start of third-quarter US earnings. The US Commerce Department gives the market more optimism as US Retail Sales unexpectedly rose by 0.7% MoM, indicating strong consumer spending while still watching for signs of impacts from supply chain disruptions and higher costs, especially for energy. On the other hand, the US Michigan Consumer Sentiment Prel fell to 71.4 in October-21 from previously at 72.8 level in September-21. Today the market will be looking forward to several data releases such as: 1) US Industrial Production MoM; 2) China GDP Growth Rate YoY; 3) China Industrial Production YoY.
Domestic Update
• The 10-year Indo government bond yield dropped below 6.10% last week. As of Friday (10/15), the benchmark yield closed at 6.07% after dipping 9 bps from previous trading day. MNCS Comment: The decline in domestic currency denominated bond yield was in line with rupiah appreciation. The value of rupiah has been strengthening recently, booking 1.05% appreciation against USD last week. A massive foreign inflows to equity totaling of >IDR5 trillion and trade balance surplus of USD4.37 billion in September have sent rupiah value higher.
• Furthermore, there was an addition of 131 new Covid-19 cases in Jakarta yesterday.
Company News
1. PTPP IJ recorded IDR13.48 trillion the new contracts acquisition for 9M21 or rose by 14.62% YoY. The target by the end of the year is reaching IDR30.1 trillion. The company has realized capex up to 9M21 of IDR1.86 trillion from the allocated capex of IDR6.2 trillion (Kontan). MNCS Comment: We asses PTPP's contracts and capex target will continue to increase and expected to be achieved by this end FY21E, considered by 20 ongoing projects. PTPP is currently trading at level 47.92x/0.77xPER/PBV.
2. BRPT IJ targets a capex of USD8.3 billion up to FY26E which is spread across subsidiaries. BRPT is currently in the process of working on projects in the petrochemical sector (targeted to be completed in FY22E) and geothermal sector (targeted to be completed in FY25E to FY26E) (Market Bisnis). MNCS Comment: We see the increase in capex allocation become of the strategies to expand the market share and diversify BRPT's businesses. BRPT is trading at the level of 31.96x/4.30xPER/PBV.
3. WSKT IJ reported IDR2.58 trillion capex realization for 8M21 or equivalent to 46.14% of the company’s FY21E target of IDR5.6 trillion. At the end of the year, WSKT will refocus its business to conventional construction services both at home and abroad and also reduce toll road projects (Trenasia). MNCS Comment: We see that the refocusing action has begun to be intensively carried out with the divestment of toll roads, we hope it will improve the company’s financial performance. Currently, WSKT is trading at level 45.57x/1.80xPER/PBV.
IHSG Updates
JCI strengthened by +0.11% to 6,633.34 on Friday (15/10) followed by net foreign buy reaching IDR1.50 trillion. JCI closed higher led by the property sector (+0.86%), followed by the basic industrial sector (+0.66%). On the other hand, the transportation sector weakened by -0.99%, followed by the health sector (-0.46%). The strengthening of the JCI was driven by market optimism regarding the handling of Covid-19 cases in Indonesia, which triggered foreign investors entering the Indonesian market followed by Indonesia's trade balance surplus in September reaching USD4.37 billion. On the other hand, the Rupiah strengthened at IDR14,075 level in the spot market. We estimate the JCI will move in the range of 6,500-6,670 while waiting for the release data Indonesia Trade Balance. Today's recommendations: INTP, SRTG, MAPI, PWON.
Corporate Action
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