Global Market Highlights
The DJIA strengthened by +0.40% on Friday (04/26), followed by S&P 500 (+1.02%) and Nasdaq (+2.03%). Wall Street managed to rebound amid the release of the core PCE price index data in Mar-2024, which increased by +2.8% YoY (vs consensus: +2.6% YoY), with investors positively responding to the earnings releases of several companies in 2Q. Meanwhile, the Michigan inflation expectations final for Apr-2024 rose to +3.2% YoY (vs +2.9% YoY previously). Today the market will be waiting for several data releases, including: 1) EA Economic Sentiment Apr-2024 2) Germany Inflation Rate YoY Prel Apr-2024; 3) US Dallas Fed Manufacturing Index Apr-2024.
Domestic Update
Bank Indonesia reported that based on transactions from 22 - 25 April, 2024, non-residents in the domestic financial market recorded a net sale of IDR2.47 trillion, consisting of a net sale of IDR2.08 trillion in theSBN market, a net sale of IDR2.34 trillion in the stock market, and a net purchase of IDR1.95 trillion in the SRBI market. MNCS Comment: We assess the outflow that occurred in-line with the shift in rate cut expectations from the initially projected 1H24 to 3Q24, causing non-residents to tend to be priced-in. We note that until 26-Apr, non-residents in the stock market recorded a net sell of IDR18.7 trillion (MTD). Additionally, we believe that the escalation of geopolitical tensions in the Middle East also contributed to this outflow. Going forward, we expect inflows to gradually return, starting with the SBN market.
Company News
1. DRMA IJ recorded a drop in net profit -38.25% YoY in 1Q24 (Emiten News). MNCS Comment: The decrease in this bottom-line was driven by the fall of revenue (-7.40% YoY) while the increase in opex also add a pressure, with the selling and marketing expense grew by +7.87% YoY and the general and administrative cost rose by +15.66%. As a result, the NPM dropped from 14.98% in 1Q23 to 9.99% in this period. DRMA is currently trading at 32.63x/2.02x PER/PBV.
2. AKRA IJ reported a lower performance in 1Q24 (Kontan). MNCS Comment: The company experienced a drop in its revenue -10.47% YoY, driven by the decline in most business segments, the petroleum trading and distributions (-18.12% YoY), the basic chemical and others (-17.77% YoY), the logistic services (-3.94% YoY), the industrial estate land sales (-34.26% YoY). Following this, the company’s net profit saw a slight decline of -1.95% YoY. Amidst this result, we still have a positive outlook on AKRA’s performance in FY24E, where we expect a significant growth in 1H24 on the trading and distribution segment and the industrial estate line. The management stays optimistic to maintain its net profit growth at 12%-15% this year. AKRA is currently trading at 2.14x PBV.
3. TPMA IJ will distribute a final dividend of IDR45/share for FY23 (Emiten News). MNCS Comment: After distributing an interim dividend in Dec-2023 amounting to IDR30 per share, the total DPS for FY23 distributed amounts to IDR75 per share or equivalent to IDR196.6 billion. This final dividend distribution will result in a potential yield of 6.7%. We note that the FY23 DPS is higher compared to the previous year, FY22, which was IDR60 per share, in line with the increase in net profit by +37.77% YoY. However, the Dividend Payout Ratio in FY23 is lower compared to FY22, at approximately 65% (vs 70.59% in FY22). TPMA is currently trading at 5.81x/1.24x PER/PBV.
IHSG Updates
The JCI tumbled by -1.67% to 7,036.08 on Friday (28/04), followed by a heavy net foreign outflow of IDR2.16 trillion. All sectors fell and drove the index down, with the consumer cyclicals sector led the loss (-2.80%) and followed by the healthcare sector (-2.25%). The index was pressured by the sell-off actions after BI’s decision to increase interest rate and some big caps’ 1Q24 earnings releases were below expectations. Meanwhile, the other Asian markets experienced gains after BoJ decided to keep the interest rate at 0.1% or as consensus. The Rupiah closed lower at IDR16,210/USD. We estimate that the JCI will move in the price range of 7,010-7,095. Today's recommendations: ADRO, ASSA, MAPA, MBMA.
Corporate Actions
AGMS: AKRA, PTRO, TUGU
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