Global Market Highlights
The DJIA strengthened by +0.48% on Tuesday (12/12), followed by S&P500 (+0.46%) and Nasdaq (+0.70%). Wall Street continued its solid gains, supported by positive investor response to the release of inflation data in Nov-2023, which slowed in line with consensus expectations at +3.1% YoY. Meanwhile, core inflation in Nov-2023 recorded +4.0% YoY, in-line with consensus. With the CPI dropping to its lowest level in 5 months, it further strengthens expectations of a rate cut in 1H24. Today, the market will be looking toward several data releases such as: 1) US PPI MoM Nov-23; 2) China M2 Money Supply YoY Nov-23; 3) EU Industrial Production YoY Oct-23.
Domestic Update
The government officially provides a 40% relaxation on the implementation of TKDN for battery EVs until FY26. MNCS Comment: We see this relaxation positively, as EV manufacturers will have proper time for infrastructure development and planning a good supply chain ecosystem. We anticipate this move to also attract foreign companies' investments to the domestic market and expand B2B cooperation. We foresee continued growth in the EV industry in line with increasing demand.
Company News
1. MEDC IJ completed the acquisition of a 20% ownership stake in 2 Oil and Gas blocks in Oman (Kontan). MNCS Comment: We note that the acquired oil blocks by MEDC cover an area of 4,480 m2 with a total production of >63 mboepd. Through this acquisition, we expect future JV's revenue growth driven by production volume, amid a relatively flat global oil price outlook. Currently, MEDC is traded at a level of 5.41x/0.98x PER/PBV.
2. PANI IJ targets marketing sales of IDR5.5 trillion in FY24F (Kontan). MNCS Comment: The targeted marketing sales represent a 162% growth compared to the FY23E figure of IDR2.1 trillion. With incentives in the property sector and the expansion of land already undertaken, we anticipate an increase in the company's performance going forward. Currently, PANI is traded at a level of 30.15x PBV.
3. SGER IJ will build one of the largest hydrogen peroxide (H2O2) plants in Indonesia (Kontan). MNCS Comment: We note that the production capacity of the plant is 20k metric tons for 100% concentration. We assess positively the company's efforts to diversify into the non-coal segment, which can drive the company's performance and bring business sustainability. Currently, SGER is traded at a level of 14.42x/8.84x PER/PBV.
IHSG Updates
The JCI gained by +0.52% to 7,125.31 on Tuesday (12/12), amidst net foreign sell of IDR530.69 billion. Most sectors strengthened and pushed the index up, led by the technology sector (+1.99%) and followed by financials sector (+1.53%). Conversely, some sectors declined were led by transportation & logistic sector (-1.11%), followed by consumer non-cyclicals sector (-0.91%). The index's rise aligns with the majority of movements in Asian markets, as investors are optimistic ahead of the release of US inflation data in Nov-2023 which expected to slowdown, and are evaluating the performance of other regional macroeconomics. The Rupiah closed lower at IDR15,620/USD. We estimate the IHSG will move within the price range of 7,032-7,190. Today's Recommendations: BFIN, BRIS, ITMG, MEDC.
Corporate Actions
EGMS : BUKK
Cum Dividend : BFIN (IDR28/share), GEMS (USD0.0153/share)
Disclaimer On
