President Joko Widodo revised the 2020 state budget to contain the virus spread and stimulate economic growth. The budget allocated for Ministry of Education and Culture as well as Ministry of Health were subject to higher revisions by 95% and 33%, respectively. The higher budget allocation for those two ministries trimmed the infrastructure budget to lead delays in the completion of infrastructure projects. The Financial Services Authority (OJK) and IDX regulations of stock buyback without AGM is a stimulus for JCI. WIKA, WSKT, PTPP, and ADHI to include in BUMN Karya actively participated in stock buyback in order to cushion market volatility and boost stock price liquidity. WIKA recorded FY19’s higher profit of 26%, backed by projects from Joint Operation (JO) and Operational Cooperation (KSO). WIKA’s positive cash flow enables it to perform stock buyback without disturbing internal financial performance. NHKSI recommends WIKA as this week’s top stock pick estimated to reach the price target of IDR1,770 based on an 8.1x P/E trailing band.
Download full report HERE.