Daewoo Securities Daily Focus (June 29, 2016)
Market Comment by Taye Shim (taye.shim@dwsec.com)
Overnight, major indexes reversed a two-day losing streak post a Brexit sell-off as oil price rallied and market indicators stabilized. The JCI closed up 1% yesterday following the news (released during the trading session) that the House of Representatives approved the long awaited tax amnesty. Rupiah strengthened 1.2% against the greenback, 10yr gov. bond yields fell 8bps and foreigners net bought equities worth IDR691.1bn. Elsewhere in US, 1Q16 GDP was revised up to 1.1% from previous 0.8%, while June consumer sentiment improved to 98 - which is the highest since October. We expect JCI to continue its upward trajectory. #QUICK RECAP OF TAX AMNESTY: 1) Tax rate: 2~ 5% (repatriation) / 10% (declare only), 2) BI says tax amnesty will boost 2016 GDP by 0.3% (5.1% -> 5.4%), 3) BI says IDR560tr will be repatriated (vs. parliament IDR1,000tr).
Market Indicator
JCI: 4,882.17 (+0.95%)
EIDO: 23.65 (+5.02%)
DJIA: 17,409.72 (+1.57%)
FTSE100: 6,140.39 (+2.64%)
USD/IDR: 13,188 (-1.22%)
10yr GB yield: 7.59% (-8bps)
Oil Price: 47.85 (+3.28%)
Foreign net purchase: IDR691.1bn
Foreign net purchase on single stocks (HOTS screen #0141)
TOP BUY: GGRM, BMRI, ASII, BSDE, WSKT
TOP SELL: BBRI, TLKM, LPPF, PGAS, SMRA
Most actively traded stocks (HOTS screen #0102)
TLKM, ASII, BMRI, GGRM, BBCA
Daewoo Indonesia Equity Movers
Investment Information Team (utfi.humaya@dwsec-id.com)
*S&P/ Case-Shiller 20-City Home Price Index rises 5.4% for the year in April
*U.S. 1st-quarter GDP raised to 1.1% from 0.8%
*Q1 consumer spending cut to 1.5% from 1.8%
*Exports revised to show 0.3% gain instead of 2% drop
*Q1 business investment fell 1.8% instead of 2.6%
*DAYA +5%. Duta Intidaya will explore e-commerce business to support sales in 2017.
*TPIA +3.8%. Co won working capital facility without collateral worth USD110 million from Kasikornbank.
*AMAG +5%. Fairfax will acquire 80% of AMAG shares worth $165 million.
*MYOR -1.7%. C will distribute cash dividends amounting to IDR300 per share or IDR268.3 billion.
*SSIA -0.7%. Co targeting acquisition of palm oil companies to develop planted area.
*TKIM 0.0%. AGM decided to distribute cash dividends of IDR5 per share.
*JRPT -0.5%. Co targeting IDR600 billion from new projects in the second half of this year.
Daily write up
Colorpak Indonesia (CLPI): Attractive dividend play by Franky Rivan (franky@dwsec-id.com)
-Since 2002, CLPI never missed a single dividend payout. Beside its consistent payout policy, dividend yields are also quite attractive, averaging 4.6% over the last 5 years.
-CLPI is trading at 3.6x trailing P/E, which is far below its sector average (JAKTRAD) at 49.2x. From a historical standpoint, the company is trading nearby its -1SD (2.9x P/E).
-However, given escalating macro uncertainties, CLPI’s profitability may be hampered by potential F/X translation losses, if the company fails to prudently hedge its USD debt exposures.
Strategy focus
Indonesia: Insulated from Brexit noise by Taye Shim (taye.shim@dwsec.com)
(June 28, 2016)
- UK decided to divorce EU (52% Leave vs. 48% Remain).
- The aftermath of Brexit has caused market wobbles and we believe investors are taking conservative stance (Flight-to-quality).
- However, Brexit crisis is unlikely to evolve into a credit event (i.e., corporate failures).
- And, we expect globally coordinated policy measures to ease market concerns .
- Given limited trade exposures with UK and EU (Indonesia's trade with EU 9% of total trade; trade with UK. 0.8%), we conclude that Indonesia is largely insulated from the Brexit debacle.
- We retain our positive view over the LT, however, we expect to see ST volatility.
- See report: https://goo.gl/vW0sFz
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