Global Market Highlights
The DJIA weakened by -1.27% on Wednesday (20/12), Wall Street contracted amid the release of Existing Home Sales data in Nov-2023, which rebounded +8% MoM, and CB Consumer Confidence in Dec-2023, rising to 110.7 points. The significant increase in Wall Street, driven by the rate cut catalyst in FY24F, led investors to take profit and wait-and-see ahead of other macroeconomic data releases later in the week. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ Final Q3; 2) US Initial Jobless Claims Dec-16; 3) US Philadelphia Fed Manufacturing Index Dec-23.
Domestic Update
The implementation of DHE is beginning to show positive results, with an increase in foreign exchange term deposit (TD Valas) placements by banks in Sep-2023 amounting to IDR331.3 trillion, higher than the position in Jul-2023 of IDR317.9 trillion. MNCS Comment: We note that the realization of DHE until Nov-2023 has only reached USD1.3 trillion from the government-set target of USD3 trillion. We believe that several evaluations of the DHE policy are needed to make it more attractive in attracting exporter funds, given the demand for several leading export commodities that remains solid. We expect maximum implementation of DHE to act as a buffer for foreign exchange reserves and strengthen the future exchange rate.
Company News
1. HRTA IJ has renewed its jewelry export cooperation with Bright Metal Refiners (BMR) amounting to IDR465.2 billion (Market Bisnis). MNCS Comment: We note that gold export sales contribute 39%, equivalent to a sales volume of 3.6 tons until 9M23. With continuous export penetration, we expect this to be a cushion for the company's future profitability. Currently, HRTA is traded at a level of 4.55x/0.82x PER/PBV.
2. MIDI IJ targets a top-line growth of +11% YoY in FY24F (Market Bisnis). MNCS Comment: We note that the top-line growth target will be driven by the opening of 200 Alfamidi stores and 250 Lawson stores, translating into a +6% SSSG target. With the expansion of these stores, we are optimistic that the company can achieve its set targets. Furthermore, we believe the election period in FY24F can also act as a cushion for the food and staples retailing industry. Currently, MIDI is traded at a level of 28.00x/3.99x PER/PBV.
3. PTPP IJ targets a project value growth of +5% YoY in FY24F (Kontan). MNCS Comment: With the target for new contract value acquisition in FY23E reaching IDR34 trillion, the estimated target for FY24F is ~IDR35.7 trillion. We see that the growth in new contract value will still be driven by the IKN project and projects from the private sector. Noted, the infrastructure budget in FY24F increased by +5.8% YoY to IDR422.7 trillion. We also believe the company's solid balance sheet will support the acceleration of this target. Currently, PTPP is traded at a level of 9.89x/0.28x PER/PBV.
IHSG Updates
The JCI grew by +0.44% to 7,219.67 on Wednesday (20/12), followed by net foreign buy of IDR554.81 billion. Most sectors strengthened and moved the index up, led by the basic materials sector (+2.69%) and followed by the transportation & logistic sector (+1.88%). In contrast, some sectors weakened, led by consumer non-cyclicals sector (-0.42%) and followed by industrials sector (-0.30%). The index strengthened ahead of Bank Indonesia's (BI) RDG decision in Dec-2023, investors are also anticipating BI's moves in light of the potential rate cut by The Fed in FY24F. Furthermore, most of the Asian market also strengthened after People’s Bank of China (PBoC) decided not to change its loan prime rate at the low record of 3.45%. The Rupiah closed lower at IDR15,510/USD. We estimate the IHSG will move within the price range of 7,156-7,230. Today's Recommendations: BRIS, CTRA, DOID, TOWR.
Corporate Actions
EGMS : CFIN, LUCY
Cum Dividend : RDTX (IDR745/share)
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