Global Market Highlights
Wall Street closed on Monday (19/02), due to Presidents' Day, officially Washington’s Birthday public holiday. Today the market will be looking forward to several data releases such as: 1) CA Inflation Rate Jan-2024; 2) KR Consumer Confidence Feb-24; 3) US 3-Month & 6-Month Bill Bond Yield.
Domestic Update
Bank Indonesia reported that the Residential Property Price Index (IHPR) in the fourth quarter of 2023 grew 1.74% YoY, but declined from the third quarter of 2023 (1.96% YoY). MNCS Comment: We note that the development of residential property prices is in-line with CPI inflation pressure for the building materials group which is also sloping. At the same time, we saw that the growth in the total value of KPR and apartment ownership credit (KPA) which was sloping on a quarterly basis (12.17% YoY vs. 12.32% YoY in 3Q23) also put pressure on residential property prices, in line with the condition of high interest rates.
Company News
1. INCO IJ will soon complete the divestment agreement on Monday 26 February 2024, with a possible agreement price of IDR 3,070/share (Bloomberg Technoz). MNCS Comment: We see that the divestment price reflects a discount of 23.3% to INCO's TTM PBV of 0.95x, and 31.3% to the median TTM PBV of nickel mining companies of 1.06x. Currently INCO is trading at the level of 9.05x/0.97x PER/PBV.
2. MIKA IJ allocates capex up to IDR1 trillion to build a new hospital in FY24E (Investor ID). MNCS Comment: We assess the company's expansion plans positively as they can enhance the hospital portfolio and bed capacity, potentially driving better performance in the future. In FY23, the bed capacity reached 3,796 units, thus with the expected completion of this expansion in FY25F, the estimated total bed capacity could reach 4,576 units. MIKA is currently trading at 41.89x/6.85x PER/PBV.
3. BDMN IJ prepares IDR102 bn capex in FY24E for maintenance, R&D, addition of some production and laboratory equipment (Kontan). MNCS Comment: The management budgets lower capex than last year, while staying optimist for better sales this year. This expectation is supported with the general election event which is likely to increase people’s purchasing power. We view this factor to potentially boost the retail industry in general, after facing a challenging year in FY23 due to the impact of El-Nino. SIDO is currently trading at 4.93x PBV.
IHSG Updates
The JCI weakened by -0.53% to 7,296.70 on Monday (19/02), followed by a net foreign buy amounting to IDR842.11 billion. Most sectors experienced declines, weighing on the index, led by the basic materials sector (-1.49%) and followed by the consumer cyclical sector (-1.39%). On the other hand, sectors that gained included the technology sector (+0.61%) and the energy sector (+0.43%). The index weakened amid a mixed movement in Asian markets, as investors wait-and-see ahead of the PBoC's lending rate decision, anticipated to decrease according to consensus expectations. The Rupiah closed lower at IDR15,630/USD. We estimate the IHSG will move within the price range of 7,266-7,301. Today's Recommendations: EXCL, GOTO, HMSP, PTRO.
Corporate Actions
Cum Dividend: BJTM (IDR54,39/share)
EGMS: SCCO
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