Global Market Highlights
DJIA weakened -0.26% on Wednesday (22/02), followed by S&P500 (-0.16%) while Nasdaq (+0.13%). Wall Street closed mixed, influenced by: 1) releases of financial reports that tend to underperform; 2) The Fed's FOMC reading; 3) a decrease in UST yield to a level of 3.92%. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ 2nd Estimate Q4; 2) US Chicago Fed National Activity Index Jan; 3) US Initial Jobless Claims Feb 18.
Domestic Update
• The Ministry of Finance announced that the realization of state spending as of Jan-2023 reached IDR141.4 trillion (4.6% of the ceiling of IDR3,061.2 trillion), or an increase of 11.2% YoY from IDR127.2 tn, accompanied by the realization of state revenue of IDR232 tn (+48.1% YoY vs IDR134.1 trillion in Jan-2022). MNCS Comment: State Budget performance in Jan-2023 which recorded a surplus of IDR90 tn (+207%) fostered domestic optimism and became a strong foundation towards fiscal consolidation and economic recovery in FY23E.
Company News
1. BSDE IJ targets IDR8.8 trillion in marketing sales in FY23E (Emiten Bisnis). MNCS Comment: The marketing sales target is the same as the realization in FY22. We consider conservative targets to be influenced by: 1) the momentum of the political year; 2) an increase in the benchmark interest rate which raises mortgage rates. We hope that this target will be supported by BSD City and projects originating from outside Java. Currently, BSDE is traded at the level of 8.54x/0.95x PER/PBV.
2. BIRD IJ through the "Big Bird" Charter Bus segment has the potential to benefit from the free homecoming program ahead of the festive Ramadhan (Emiten News). MNCS Comment: We are optimistic that the company can maximize Big Bird's business unit portfolio. We expect that the enthusiasm for homecoming for Eid in FY23E will remain high, especially after the relaxation of Covid-19 in Dec-2023. Moreover, several Big Bird variants, namely: Alpha, Bravo, Charlie and Delta with varying capacities (9-54 seats) can accommodate all customer needs. Currently. BIRD is traded at the level of 12.74x/0.86x PER/PBV.
3. DSNG IJ targets CPO production growth of 10% in FY23E (Market Bisnis). MNCS Comment: Therefore, the company's CPO production has the potential to increase to 703.4k tonnes. We assess that the increase in production will be supported by the relatively prime age of the plants and the potential for a moderate El Nino in FY23E, thus making the harvesting activities run optimally. Currently, DSNG is traded at 5.79x/0.91x PER/PBV.
IHSG Updates
JCI weakened -0.92% to 6,809.97 on Wednesday (22/02), followed by net foreign sell reaching IDR38.04 billion. The majority of sectors experienced weakness and weighed on the index, led by the technology sector (-2.35%) followed by the health sector (-1.90%). On the other hand, the sector that experienced strengthening was the industrial sector (+0.10%). The index movement was depressed in line with the weakening of Asian markets and Wall Street, where the sell-off action continued waiting for the Fed's FOMC reading. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,202/USD. We estimate that the JCI will move in the price range of 6,790-6,824. Today's recommendation: AGRO, ASII, ELSA, HMSP.
Corporate Actions
RUPS: BIPI, RUIS, INRU
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