Global Market Highlights
Wall Street was closed Monday (15/01) commemorating Martin Luther King Day, as global stocks indices ended flat; DAX edged +0.10%, FTSE slipped -0.20%, and Nikkei gained +0.90% higher. Traders are now pricing in a 75 bps cut throughout FY24 according to CME Fedwatch’s dot plot. The PBoC’s decision to hold their 1-yr MLF policy rates steady at 2.5% yesterday came as a shock to market’s expectations of a much needed economic stimulus, while injecting ~USD140 billion into the banking system. Today the market will be looking forward to several data releases such as: 1) UK Unemployment Rate Nov-2023; 2) Germany Economic Sentiment Index Jan-2024; 3) US NY Empire State Manufacturing Index Jan-2024.
Domestic Update
BPS reports that Indonesia's trade balance in Dec-2023 recorded a surplus of USD3.31 billion. MNCS Comment: Indonesia's trade balance has recorded a surplus for 44 consecutive months. The surplus in Dec-2023 increased compared to the realization in Nov-2023 of USD2.41 billion as well as above the consensus estimate of USD1.92 billion. This figure is attributed to the increase in export value in Dec-2023 by +1.89% MoM amid a decrease in the import value during the same period by -2.45% MoM. We expect the increased surplus to strengthen the value of the IDR exchange rate.
Company News
1. ASII IJ recorded car sales of 560,717 units during FY23, or down -2.34% YoY from 574,198 units in FY22 (Emiten News). MNCS Comment: These sales figures follow the trend of declining national car sales, while maintaining superior market share (56%), in line with conditions of high interest rates. However, ASII's revenue from the automotive segment continued to grow +13.03% YoY throughout 9M23, and with car unit sales growth of +0.99% MoM in Dec-2023, we see the potential for FY23 earnings still strong. Currently, ASII is trading at 6.53x/1.17x PER/PBV.
2. ERAL IJ has realized the opening of the first MST Golf Arena outlet in Summarecon Kelapa Gading (Emiten News). MNCS Comment: We assess positively the company's expansion efforts in the active lifestyle sector, which we expect to drive the company's performance in the future. We also see the company as agile in capturing the growing trend in sports. We note that MST Golf has achieved positive net profit growth with a CAGR of +38.8% from FY19-21 and holds a 52% market share based on the volume of imported goods in Malaysia. Currently, ERAL is traded at a level of 7.53x/1.16x PER/PBV.
3. ELPI IJ budgets IDR1 trillion capex to add 7 new ships to fulfill the demand of offshore support ship service and to explore to business entities and affiliates in FY24. Additionally, the company has been successfully expanding to Malaysia (Kontan). MNCS Comment: We foresee this expansion as a positive catalyst for international market penetration and holds the potential to significantly increase revenue after the company hit +76.23% YoY revenue and +76.58% YoY net profit in 9M23. ELPI is currently traded at 14.36x/1.14x PER/PBV.
IHSG Updates
The JCI fell by -0.24% to 7,224.00 on Monday (15/01), amidst net foreign buy of IDR185.83 bn. Some sectors declined, led by the healthcare sector (-0.76%) and followed by the financials sector (-0.53%). Conversely, some strengthened sectors were led by the transportation & logistic sector (+3.01%) and followed by the industrials sector (+1.06%). The index weakened amid mixed closures in Asian markets, as investors scrutinized the government's Foreign Debt (ULN) growing by +2.0% YoY in Nov-2023, and the trade balance surplus value in Dec-2023 declined by -15.6% YoY. The Rupiah closed lower at IDR15,555/USD. We estimate the IHSG will move within the price range of 7,200-7,250. Today's Recommendations: AKRA, BBNI, INKP, PTBA.
Corporate Actions
EGMS: TOTO
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