Global Market Highlights
The DJIA slipped by -0.10% on Friday (29/12), followed by S&P 500 (-0.28%) and Nasdaq (-0.56%). Wall Street posted modest corrections after what had been a considerable year-end rally driven by a sliding inflation rate and buoying soft-landing expectations. Signs of declining economic activities arose as US Chicago PMI Dec-23 plunged to 46.9 from 55.8 (vs expectations of 51), further advocating the Fed's pivoting agenda. Today, the market will be looking toward several data releases such as: 1) China Caixin Manufacturing PM Dec-23; 2) US S&P Global Manufacturing PMI Final Dec-23; 3) UK S&P Global Manufacturing PMI Final Dec-23.
Domestic Update
The government has imposed taxes on e-cigarettes starting from January 1, 2024. MNCS Comment: We view this policy as a potential revenue boost for the country, in addition to the levying of taxes on electronic cigarettes. According to Statista, revenue from the e-cigarette market is expected to grow with a CAGR of +3.7% from FY22-27F, reaching USD459 in FY27F. Meanwhile, the number of electronic cigarette users in Mar-2023 reached 2.76% of the total population aged >5Y, equivalent to 6.4 million people.
Company News
1. PGAS IJ targets a sales volume growth for gas of +4.0% YoY in FY24E (Kontan). MNCS Comment: In 9M23, we noted a gas sales volume growth of +4.6% YoY to 935 BBTUD (vs 894 BBUTD in 9M22). We are optimistic that the company can achieve this target, aligning with growth in the manufacturing and household sectors. Additionally, the target will be supported by the expansion of household connections, which we expect to reach around ~935k SR. Currently, PGAS is traded at a level of 6.68x/0.68x PER/PBV.
IHSG Updates
The JCI weakened by -0.43% to 7,272.80 on Friday (29/12), amidst net foreign buy of IDR872.94 billion. Most sectors declined and slowed the index down, led by the basic materials sector (-2.36%) and followed by the transportation & logistic sector (-1.54%). Conversely, some sectors increased, led by the technology sector (+1.60%) and followed by the consumer cyclicals sector (+0.99%). The Asian markets closed mixed as the released of China’s Current Account did not meet the market’s expectations. The Rupiah closed higher at IDR15,397/USD. We estimate the IHSG will move within the price range of 7,210-7,310. Today's Recommendations: ACES, EXCL, HMSP, SMGR.
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