Global Market Highlights
The DJIA weakened by -0.11% on Wednesday (24/04), while S&P 500 (+0.02%) and Nasdaq (+0.10%) strengthened. Wall Street closed mixed as UST yields rose to 4.65%. Additionally, the earnings releases of several companies also influenced the index movements. Meanwhile, the release of durable goods orders data in Mar-2024 increased by +2.6% MoM, higher than the consensus expectation of +2.5% MoM. Today the market will be waiting for several data releases, including: 1) Germany GfK Consumer Confidence Mei-2024; 2) US GDP Growth Rate 1Q24; 3) US Pending Home Sales YoY Mar-2024.
Domestic Update
Bank Indonesia raised the BI Rate by +25 bps to 6.25% during the RDG in Apr-2024, followed by the Deposit Facility rate (+25 bps) to 5.50% and the Lending Facility rate (+25 bps) to 7.00%. MNCS Comment: BI's decision to increase the BI Rate was beyond the consensus expectation of maintaining the BI Rate at 6.00%. We see BI's move to raise the benchmark interest rate aimed at maintaining Rupiah stability amid the strengthening USD and geopolitical tensions in the Middle East. We believe that the policy to stabilize the Rupiah exchange rate by optimizing monetary instruments, forex market interventions, and pro-market operational strategies such as SRBI, SVBI, and SUVBI, as well as forex placement instruments such as DHE SDA, will attract foreign portfolio inflows from abroad.
Company News
1. BUMI IJ reported a net profit growth of +12.28% in 1Q24 (Kontan). MNCS Comment: Amidst a drop in revenue (-31.62% YoY), due to the decline in coal sales (-35.27% YoY), the company managed to secure a positive net income and a rise in NPM to 21.75% (vs 13.24% in 1Q23). We note that this was supported by the decline in its cost of revenue (-22.09% YoY) and opex (-30.85% YoY). We expect the increase in coal reference price (HBA) and positive outlook on coal demand will be favorable to the company’s performance this year. BUMI is currently trading at 0.86x PBV.
2. UNTR IJ will distribute a final dividend for the FY23 amounting to IDR5.7 trillion or equivalent to IDR1,569 per share (Market Bisnis). MNCS Comment: Considering the interim dividend distribution in FY23 (IDR701 per share), the total DPS distributed reaches IDR2,270. Meanwhile, we estimate that the final dividend distribution will provide a potential yield of 6.3%. Additionally, the total DPS in FY23 is lower than FY22 at IDR7,003 per share, with a lower payout ratio of 39.3% (vs 124.4% in FY22). UNTR is currently trading at 4.50x/1.17x PER/PBV.
3. RAJA IJ recorded a net profit growth of +34.50% YoY at USD7.2 million in 1Q24 (Market Bisnis). MNCS Comment: The increase in net profit was mainly attributed to the growth in revenue (+66.54% YoY), which was supported by the rise in gas sales (+41.70% YoY), oil and gas lifting as its recent business line, toll fee (+15.23% YoY), operating maintenance income (+52.53% YoY), and other operating income (+174.85% YoY). Following this, the company experienced a spike in its cost of revenues (+70.13% YoY) and opex (+47.38% YoY), resulting in lower NPM at 11.68% (vs 14.47% in 1Q23). RAJA is currently trading at 27.26x/2.18x PER/PBV.
IHSG Updates
The JCI increased by +0.90% to 7,174.53 on Wednesday (24/04), followed by a net foreign buy of IDR7.80 billion. Most sectors strengthened and boosted the index, led by the technology sector (+2.36%) and followed by the healthcare sector (+0.88%). On the other hand, the industrials sector led the weakening (-0.65%) and followed by the transportation & logistic sector (-0.28%). The index rose along with most of the other Asian markets as the stocks market started to show recovery following the positive sentiment in the global market, 1Q24’s earning releases and also stocks purchasing momentum at lower prices after recent sell-offs within the previous weeks. The Rupiah closed higher at IDR16,154/USD. We estimate that the JCI will move in the price range of 7,092-7,217. Today's recommendations: AKRA, BRMS, INKP, SIDO.
Corporate Actions
AGMS: BBSI, CMRY, DRMA
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