Global Market Highlights
The DJIA rebounded +0.97% on Thursday (01/02), followed by the S&P 500 (+1.25%) and the Nasdaq (+1.30%). Wall Street stocks managed to rebound on the back of uplifting economic data readings which also led to the further slump in UST 10-yr yields by -12 bps. The loosening of US labor market shown by US Weekly Initial Jobless Claims 27 Jan-2024 (224k vs. expectations of 212k) made the case for a more dovish Fed outlook, while at the same time the stronger-than-expected US ISM Manufacturing PMI Jan-2024 (49.1 vs expectations of 47.2) supported possibilities of soft-landing. Today the market will be looking forward to several data releases such as: 1) US Non Farm Payrolls Jan-2024; 2) US Unemployment Rate Jan-2024; 3) US Michigan Consumer Sentiment Final Jan-2024.
Domestic Update
Consumer Price Index inflation in Jan-2024 was recorded at +2.57% YoY (+0.04% MoM), sloping from the previous +2.61% YoY (+0.41% MoM), albeit exceeding consensus at +2.55% YoY (+0.29% MoM). MNCS Comment: We note that inflation has continued its downtrend since Nov-2023 and is still within the government's target range of 1.5% - 3.0% YoY. We assess that the biggest risk to the inflation target is volatility in food prices, especially retail rice prices, which rose +0.63% MoM/+16.24% YoY in Jan-2024, due to by El Nino supply disruption, accompanied by the closure of exports by a number of rice exporters. The government anticipates this supply gap by providing cash assistance to maintain the people’s purchasing power.
Company News
1. PJAA IJ recorded a net profit of IDR235.17 billion in FY23 or grew +64.2% YoY (Emiten News). MNCS Comment: We note that the company's revenue grew +33.01% YoY to reach IDR 1.273 trillion, supported by growth in all segments including tourist attraction tickets (+35.5% YoY), kiosk rentals (+30.9% YoY) and hotels & restaurants (+14.2% YoY). We view that the growth is driven by increased citizen mobility in FY23 accompanied by several large concerts held such as The Corrs, Rex Orange County, Semesta Berpesta and Round Festival 2023. PJAA is currently trading at 6.96x/0.95x PER/PBV.
2. BRIS IJ recorded a net profit of IDR5.7 trillion in FY23, or went up by +33.9% YoY (Emiten News). MNCS Comment: BRIS's net profit realization is in-line with our estimates, reflecting 104.4% of our target in FY23. This increase is supported by a financing growth of +15.7% YoY. Meanwhile, the provision cost decreased by -30.0% YoY, and the BOPO stood at 71.3% (vs 75.9% in FY22). Currently, BRIS is traded at a level of 2.85x PBV.
3. BSDE IJ targets marketing sales to reach IDR9.5 trillion in FY24E (Emiten News). MNCS Comment: The marketing sales target in FY24E shows an increase of +8.0% YoY compared to FY23, which was valued at IDR8.8 trillion. We see this optimism aligning with the FY23 realization that exceeded the target (108%). Additionally, there are several positive catalysts for the property market, such as the PPn incentive until Dec-2024, administrative cost incentives of IDR4 million, and relaxation of the LTV/FTV ratio in property loans. Currently, BSDE is traded at a level of 9.16x/0.60x PBV.
IHSG Updates
The JCI closed flat at -0.09% to 7,201.70 on Thursday (01/02), amid a net foreign buy of IDR886.17 billion. Most sectors experienced a decline and weighing on the index, led by the transportation sector (-1.56%), followed by the financial sector (-1.30%). On the other hand, sectors that experienced gains were led by the health sector (+1.48%), followed by the infrastructure sector (+0.09%). The index closed flat amidst mixed performances in Asian markets. Investors are scrutinizing The Fed's statements in the Jan-2024 FOMC, indicating that a rate cut probability is unlikely in Mar-2024, which goes against investors' expectations. The Rupiah closed higher at IDR15,765/USD. We estimate the IHSG will move within the price range of 7,155-7,250. Today's Recommendations: BRPT, MBMA, WIIM, AKRA.
Corporate Actions
EGMS: WICO
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