Global Market Highlights
The DJIA strengthened by +0.82% on Friday (01/12), followed by S&P500 (+0.59%) and Nasdaq (+0.55%). Wall Street rebounded, whereas the release of the ISM Manufacturing PMI data in Nov-2023, which still in contraction territory at 46.7, brought down UST yield to 4.22%. This maintains investor confidence that The Fed's interest rate hike era has ended. Today, the market will be looking toward several data releases such as: 1) Australia Retail Sales MoM Oct-23; 2) Germany Balance of Trade Oct-23; 3) US Factory Orders MoM Oct-23.
Domestic Update
BPS reported headline inflation in Nov-2023 at +0.38% MoM/+2.86% YoY. MNCS Comment: The inflation rate in Nov-2023 is expansive compared to the realization in Oct-2023 at +2.56% YoY and is also above the consensus estimate of +2.70% YoY. The increase in inflation is accompanied by rising prices, as indicated by the rise in all expenditure group indices. Meanwhile, core inflation continues its downward trend at +1.87% YoY, lower than the Oct-2023 realization of +1.91% YoY, indicating a moderation in domestic demand. We expect the inflation rate to remain within Bank Indonesia's target of 3%±1% by the end of the year, considering maintained external stability and financial system stability.
Company News
1. TLKM IJ will soon inaugurate its new entity, InfraCo, which can consolidate telecommunications for various networks, including data centers (Market Bisnis). MNCS Comment: We assess positively the expansion of TLKM services targeting the enterprise/B2B segment. We see that the operation of the Hyperscale Data Center (HDC) will strengthen the integration of company services, which is expected to bring value to the company. We anticipate improved performance ahead, along with the potential revenue streamline from the enterprise/B2B segment. Currently, TLKM is traded at a level of 14.59x/2.90x PER/PBV.
2. BUMI IJ targets coal production volume for FY23E at 75-80 million tons (Market Bisnis). MNCS Comment: In 9M23, BUMI successfully recorded a production volume growth to 56.2 million tons and sales volume of 54.3 million tons. We note that coal production realization until 9M23 reached 74.9%-70.3%. We are quite optimistic that BUMI can meet this target, driven by increased demand towards the end of the year. Currently, BUMI is traded at a level of 30.50x/1.50x PER/PBV.
3. NCKL IJ recorded a net profit increase of +23.8% YoY to IDR4.5 trillion in 9M23 (vs IDR3.6 trillion in 9M22) (Emiten News). MNCS Comment: The net profit is supported by revenue growth of +135.1% YoY, reaching IDR17.3 trillion in 9M23 (vs IDR7.4 trillion in 9M22). However, the company's COGS recorded an increase of +210.3% YoY, thus impacting the margin. We note that the company's GPM/NPM decreased to 35.5%/25.8% in 9M23 (vs 51.1%/49.0% in 9M22). Currently, NCKL is traded at a level of 11.18x/3.00x PER/PBV.
IHSG Updates
The JCI closed lower by -0.29% at 7,059.91 on Friday (01/12, followed by a net foreign buy of IDR213.29 billion. Most sectors experienced a decline and weighing on the index, led by the basic materials sector (-3.53%), followed by the healthcare sector (-2.43%). On the other hand, sectors experienced gains were led by the technology sector (+2.18%), followed by the industrial sector (+1.46%). The index's decline aligns with most Asian markets, where investors are scrutinizing the release of China's NBS Manufacturing PMI data in Nov-2023, which is still in contraction territory at 49.4 (vs 49.7 in the consensus). This is feared to burden the outlook for the global economy. Additionally, investors are also monitoring the expansive domestic inflation rate in Nov-2023. The Rupiah closed higher at IDR15,485/USD. We estimate the IHSG will move within the price range of 7,020-7,120. Today's Recommendations: BFIN, HMSP, PGAS, TKIM.
Corporate Actions
EGMS : PTRO, CENT
Cum Dividend : UNVR (IDR63/share)
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