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Stunned by Eid sentiment, analysts are champions of these stocks

Reporter: Akhmad Suryahadi | Editor: Tendi Mahadi

KONTAN.CO.ID – JAKARTA. Domestic economic activity has gradually increased at least over the past month, as cases of the Omicron variant of Covid-19 have decreased. Fasting and Eid celebrations (Eid) are also looser than last year.

The government has set the Eid holiday for 10 days, much longer than the Eid two years before. From there, the government projects as many as 85 million people to take part in this year’s Eid homecoming, an increase from last year’s figure of 1.5 million people.

Mirae Asset Sekuritas analysts Hariyanto Wijaya and Emma A. Fauni in their research on Monday (11/4) assessed that this increase in mobility should be able to increase public spending on clothing and other non-primary needs.

In addition, the Ministry of Manpower emphasized the obligation to pay the holiday allowance (THR) in full this year. This policy should be able to increase the purchasing power of the middle to lower income community to spend during the Eid celebration season.

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Meanwhile, the implementation of community activity restrictions or PPKM level 2 in the Greater Jakarta area allows shopping centers to operate until 10 pm. This is expected to increase public interest in spending ahead of Eid. “Therefore, this year’s Ramadan seems to provide an attractive momentum for retail companies,” said Hariyanto.

So, Mirae Asset added a retail company, namely PT Matahari Department Store Tbk (LPPF) and a shipping company, namely PT Samudera Indonesia Tbk (SMDR) into the main selection or top picks. LPPF and SMDR replaced the shares of PT Medco Energi Internasional Tbk (MEDC) and PT Perusahaan Perkebunan London Sumatra Indonesia Tbk (LSIP)

LPPF is considered attractive because its revenue growth can be significantly boosted by the momentum of this year’s Eid celebrations. Mirae Asset Sekuritas expects solid clothing (clothing) sales during the month of Ramadan. In addition, the LPPF valuation is also cheaper than peers-nya, missal PT Ramayana Lestari Sentosa Tbk (RALS).

Meanwhile, SMDR is considered attractive due to its position as an integrated cargo transportation and logistics company with around 65% of its 2020 revenue contributed by the container shipping business. SMDR is considered to be the beneficiary of the increase in container transport rates.

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Apart from LPPF and SMDR, Mirae’s preferred shares tend to be in the banking sector, coal mining, coal mining services, and nickel such as PT Bank Negara Indonesia Tbk (BBNI), PT Bank Rakyat Indonesia Tbk (BBRI), PT Indo Tambangraya Megah Tbk (ITMG), PT Adaro Energy Indonesia Tbk (ADRO), PT United Tractors Tbk (UNTR) and PT Aneka Tambang Tbk (ANTM).

These shares were selected with various considerations. ITMG, for example, is considered attractive because its performance is projected to be solid considering that ITMG as a coal mining company benefits from the increasing coal prices. ITMG also has the potential to get higher demand from the European Union (EU) which is currently planning to suspend coal imports from Russia.

Meanwhile, BBNI’s valuation is considered quite cheap and supported by the potential for extraordinary net profit growth this year.

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