Global Market Highlights
The DJIA slid -0.25% on Tuesday (23/01), whereas the S&P 500 (+0.29%) and the Nasdaq (+0.43%) further strengthened. Wall Street closed in the mix following several underperforming economic indicators and soft earnings in US homebuilder stocks. The Richmond Fed Manufacturing Index Jan-2024 slipped to -15 (vs. an expected increase to -7), followed by a discouraging Eurozone Consumer Confidence Index Jan-2024 that fell below the expected -14.3 to -16.1. This was concurrent with losses in the Treasury market following weak UST 2-yr auction demand (bid-to-cover came at 2.57, lower than 10-auction average of 2.72) which also burdened stocks. Today the market will be looking forward to several data releases such as: 1) US S&P Global Composite PMI Jan-2024; 2) US S&P Global Manufacturing PMI Jan-2024; 3) UK CBI Business Optimism Index 1Q-2024.
Domestic Update
Bank Indonesia (BI) reports that the growth of bank credit disbursement in Dec-2023 reached +10.3% YoY. MNCS Comment: The growth in bank credit disbursement in Dec-2023 increased compared to the realization in Nov-2023 at +9.7% YoY, and it is within BI's target range of 9%-11% YoY for FY23. The credit growth in Dec-2023 is driven by the growth in corporate credit by +11.6% YoY (vs 10.0% YoY in Nov-2023). We expect credit growth to slow down as market tend to wait and see ahead of the election period.
Company News
1. ANTM IJ has completed the divestment of shares in PT Sumberdaya Arindo (SDA) of 49% and Feni Haltim (FHT) of 60% to Contemporary Brunp Lygend Co. Ltd. (CBL) and formed a JV with a 30% ownership share for downstream nickel through HPAL (Kontan). MNCS Comment: We note that SDA divestment is priced at a premium IDR6.4 trillion, considering that the SDA is a brownfield project which requires less capex going forward with an established production capacity of 1.3mn tons of nickel p.a. We also see the formation of a JV with a 30% stake for downstreaming as a positive step for the company to get more value from the nickel segment which is currently seeing pinched prices due to supply pressures. ANTM is currently trading at 10.19x/1.57x PER/PBV.
2. BYAN IJ targets coal sales volume to reach 55-57 million tons in FY24E (Kontan). MNCS Comment: We note that the sales volume target is higher than the realization in FY23, which was 48 million tons, reflecting a growth of 15%-19% YoY. We are optimistic that BYAN can achieve this target, as it has secured contract volumes reaching 80%-83% of the sales volume target. Furthermore, this is also supported by a capex allocation of USD 260 million in FY24E. Currently, BYAN is traded at a level of 35.02x/20.61x PER/PBV.
3. SSIA IJ aims for land sales up to 65 Ha and +10-15% revenue growth in FY24. Additionally, the company prepares IDR2.3tn capex (Kontan). MNCS Comment: After the pandemic, SSIA hotels have been fully recovered and resulted in overall +22.33% YoY earnings growth in 9M23. We view the business to continue growing with the increasing target of land sales. SSIA is currently trading at level 0.43x PBV.
IHSG Updates
The JCI strengthened by +0.11% to 7,256.23 on Tuesday (23/01), amidst net foreign sell of IDR604.26 bn. Some growing sectors were led by the basic materials sector (+0.48%) and followed by the infrastructures sector (+0.12%). On the other hand, some weakened sectors were led by the transportation & logistic sector (-1.92%) and followed by the properties & real estate sector (-1.21%). The growth of JCI is aligned with majority of the other Asian markets where investors reacted positively to BoJ’s decision to maintain interest rate at level -0.1%. The Rupiah closed higher at IDR15,630/USD. We estimate the IHSG will move within the price range of 7,200-7,267. Today's Recommendations: AGII, ASII, ELSA, MBMA.
Corporate Actions
EGMS: BBKP
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