Global Market Highlights
The DJIA strengthened by +0.87% on Thursday (21/12), followed by S&P500 (+1.03%) and Nasdaq (+1.26%). Wall Street successfully rebounded, supported by increasing expectations of a rate cut in FY24F, given the final GDP growth in 3Q23 at +4.9% QoQ, slightly lower than the consensus expectation of +5.2% QoQ. Today, the market will be looking toward several data releases such as: 1) US Core PCE Price Index MoM Nov-23; 2) US Michigan Consumer Sentiment Final Dec-23; 3) UK Retail Sales MoM Nov-23.
Domestic Update
Bank Indonesia (BI) maintained interest rate (BI-Rate) at the level of 6.0% in Dec-2023. MNCS Comment: BI's decision to maintain the interest rate aligns with the consensus, given the focus on pro-stability monetary policy, as well as pre-emptive and forward-looking. Noted, BI also maintained the inflation projection at 2.5±1% for FY24/25. Despite a rise in volatile food inflation by +7.59% YoY in Nov-2023, due to the delayed planting season of some food commodities caused by El Nino. However, looking ahead, with the addition of rice imports and chili harvests in Jan-May'24, it is expected to control inflation in volatile food. Manageable inflation rate and exchange rate stability are anticipated to be key factors for BI regarding the possibility of future interest rate cuts.
Company News
1. INTP IJ recorded cement sales reaching 1.7 million tons in Nov-2023, translating to 15.8 million tons in 11M23 (Kontan). MNCS Comment: This figure reflects a growth of +9% YoY in 11M23, supported by an increase in market share in Sulawesi, Nusa Tenggara, and Eastern Indonesia. We expect an increase in sales volume ahead, supported by the acquisition of PT Semen Grobogan (SGB), increasing the total capacity to 28.0-28.4 million tons. With the increased total capacity, we anticipate it can drive the company's performance forward. Currently, INTP is traded at a level of 19.93x/1.66x PER/PBV.
2. GEMS IJ recorded coal production volume of 31.7 million tons until 9M23 (Market Bisnis). MNCS Comment: With a target production volume for FY23E of 40 million tons, we note that realization until 9M23 is 79.3%. We are optimistic that the company can meet this target, considering the production rate until 9M23 is still in-line, and supported by increased coal demand towards the end of the year. Currently, GEMS is traded at a level of 4.28x/3.61x PER/PBV.
3. IRRA IJ targets a capex allocation of IDR320 billion in FY24F, mainly to expand the portfolio and new business lines (Market Bisnis). MNCS Comment: We see positively the company's efforts to add to the product portfolio and the addition of new business lines that can strengthen the company's footprint. We expect this to accelerate the company's performance in the future. Currently, IRRA is traded at a level of 2.58x PBV.
IHSG Updates
The JCI weakened by -0.14% to 7,206.62 on Thursday (21/12), amidst net foreign buy of IDR382.61 billion. Most sectors declined and slowed the index down, led by the healthcare sector (-1.27%) and followed by the basic materials sector (-0.49%). On the other hand, some strengthened sectors were led by the properties & real estate sector (+0.24%) and followed by the transportation & logistic sector (+0.22%). The index weakened as investors evaluated BI's statements at the RDG in Dec-2023, foreseeing the possibility of a BI rate cut in 2H24 (50 bps in FY24F), compared to investor expectations for The Fed to start a rate cut in 2Q24 (75 bps in FY24F). Meanwhile, the Asian markets are closed mixed as a result of Foreign Direct Investment (FDI) into China fell by -10% YoY for Nov-2023. The Rupiah closed lower at IDR15,525/USD. We estimate the IHSG will move within the price range of 7.156-7.230. Today's Recommendations: ARTO, BIRD, MEDC, SMRA.
Corporate Actions
EGMS : AMAR, CLEO
Cum Dividend : IPCC (IDR21.7/share)
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