Global Market Highlights
The DJIA slid further by -0.25% on Wednesday (17/01) followed by S&P 500 (-0.56%) and Nasdaq (-0.59%). Equities were dampened further by the tapering of rate cuts pace expectations in FY24E, as solid economic indicators yesterday hinted towards a likely rate hold in Mar-2024’s FOMC meeting (CME’s probability of a 25 bps cut stooped to 55.7%). The outperforming indicators; US retail sales Dec-2023 growing +0.6 MoM (vs. consensus of +0.4% MoM) and the US manufacturing production Dec-2023 growing +0.1% MoM (vs. +0.0% MoM); contributed to the market’s downturn. Today the market will be looking forward to several data releases such as: 1) US Building Permits Prel Dec-2023; 2) US Initial Jobless Claims 13 Jan-2024; 3) US Housing Starts Dec-2023.
Domestic Update
Bank Indonesia (BI) maintained the BI Rate at 6.0% in the BI Board of Governors Meeting in Jan-2023. MNCS Comment: This decision aligns with consensus expectations, reflecting a pro-stability monetary policy focus. We also view positively BI's efforts to attract inflows that can strengthen the fundamental value of the Rupiah. The monetary operations of BI through instruments like SRBI, SVBI, and SUVBI are seen to generate significant market interest. Additionally, we expect the optimization of new instruments to enhance liquidity levels and stimulate positive credit disbursement.
Company News
1. DYAN IJ aims for a revenue growth of +10% YoY in FY24E (Kontan). MNCS Comment: We see that the event and exhibition organizer business segment (accounting 80.7% of DYAN's revenue) still has opportunities for growth in FY24E, in line with increasing domestic and international public mobility. At the same time, challenges to achieving this growth after DYAN's revenue managed to grow +39.5% YoY during 9M23 in the form of high costs of funds and election factors have the potential to reduce exhibition activities by business actors. DYAN is currently trading at 4.20x/0.62x PER/PBV.
2. MTDL IJ has entered into a strategic collaboration with FPT Information System (FPT IS), a Vietnamese company, to bolster digital technology development, especially in the field of artificial intelligence (Investor ID). MNCS Comment: We view this strategic collaboration positively as it can reinforce the company's position in digital transformation solutions, cloud computing, data, and AI. We also anticipate that this move could accelerate the company's footprint, leading to green transformation with ample growth opportunities domestically. Currently, MTDL is traded at 12.15x/1.89x PER/PBV.
3. SGER IJ stimulates business diversification to the non-coal segment after achieving stable outlook with rank of idA- from Pefindo. The company has established collaboration to sell Palm Kernel Shell and a new subsidiary with focus on the mineral and transportation market in Southeast Asia (Kontan). MNCS Comment: While the introduction of new segments operation may not have an immediate impact on the company’s performance, we perceive it as a positive initiative to reduce exposure risk to coal and nickel in the long term. The company hit +27.26% YoY revenue growth in 9M23 and is currently trading at 13.46x/6.13x PER/PBV.
IHSG Updates
The JCI weakened by -0.58% to 7,200.64 on Wednesday (17/01), followed by significant net foreign sell of IDR1.07 tn. Most sectors slumped and aggravated the index, led by the properties & real estate sector (-1.21%) and followed by the technology sector (-0.99%). The fell of JCI is aligned with all Asian markets after a spreading narrative from central banks pushback against interest rate cuts bets this year. Additionally, the macroeconomy data released signals economy slowdown in China also contributes negatively to the stock market. The Rupiah closed lower at IDR15,640/USD. We estimate the IHSG will move within the price range of 7,152-7,227. Today's Recommendations: BMRI, MDKA, MEDC, PGEO.
Corporate Actions
IPO: GRPH (IDR103/Share)
EGMS: HMSP, YELO
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