Global Market Highlights
The DJIA closed flat at +0.00% on Monday (18/12), while S&P500 (+0.45%) and Nasdaq (+0.61%). Wall Street tended to close higher, as investor optimism increased regarding the US economy's potential for a soft landing. Additionally, investors positively responded to the release of the NAHB Housing Market Index data for Dec-2023, which rose to 37 points (vs cons. of 36 points). Today, the market will be looking toward several data releases such as: 1) US Building Permits Prel Nov-23; 2) EU Inflation Rate YoY Final Nov-23; 3) US Housing Starts MoM Nov-23.
Domestic Update
Bank Indonesia (BI) reported a decrease in the International Investment Position (IIP) in 3Q23, with the net liability IIP reaching USD252.6 billion, compared to the 2Q23 achievement of USD253.8 billion. MNCS Comment: We view this decrease in-line with the decline in the Foreign Financial Liability (FFL) amid an increase in the Foreign Financial Asset (FFA). FFL decreased by -0.1% QoQ in 3Q23, influenced by outflows in line with the higher for longer policy. However, looking ahead, we see the potential for a rebound with the expectation of a rate cut by The Fed in FY24F, which could support domestic external resistance.
Company News
1. CTRA IJ targets marketing sales of IDR9.8 trillion for FY24F (Kontan). MNCS Comment: We note that the company's marketing sales target for FY24F is flat compared to FY23E. We attribute this to the cautious market sentiment, leading to a wait-and-see ahead of the election. Meanwhile, the company recorded marketing sales of IDR7.7 trillion until 9M23, achieving 78.6% of the FY23E target. We are optimistic that the company can meet the set target, supported by the VAT incentives in the property market. Currently, CTRA is traded at a level of 13.48x/1.09x PER/PBV.
2. ADRO IJ will distribute an interim dividend of USD400 million (Emiten News). MNCS Comment: With a net profit of USD1.2 billion until 9M23, we note a payout ratio of 32.8%. Considering Bank Indonesia's mid-rate as of December 18, which is IDR15,503/USD, and the composition of treasury stock, we estimate a DPS of IDR193.9 per share, indicating that ADRO has the potential to offer a dividend yield of 7.7%. Currently, ADRO is traded at a level of 3.20x/0.77x PER/PBV.
3. DEWA IJ targets revenue of IDR5 trillion for FY23E (Kontan). MNCS Comment: We note that DEWA's revenue until 6M23 reached IDR3.6 trillion (+27.0% YoY), achieving 71.3% of the FY23E target. We are optimistic that the company can meet the FY23E target, driven by guidance indicating a +9.8% YoY increase in OB removal volume followed by a +2.8% YoY increase in coal production. Currently, DEWA is traded at a level of 0.41x PBV.
IHSG Updates
The JCI declined by -0.99% to 7,119.53 on Monday (18/12), amidst net foreign buy of IDR383.15 million. Most sectors weakened and slowed the index down, led by the infrastructure sector (-2.61%) and followed by the technology sector (-2.13%). Conversely, some sectors strengthened, led by the healthcare sector (+0.48%) and followed by properties & real estate sector (+0.24%). The index movement aligned with the decline in Asian markets, as investor optimism for a rate cut in FY24F faded, triggered by several statements from The Fed over the past weekend. The Rupiah closed lower at IDR15,510/USD. We estimate the IHSG will move within the price range of 7,070-7,170. Today's Recommendations: ANTM, SMGR, SMRA, TKIM.
Corporate Actions
EGMS : META, UNVR
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