Global Market Highlights
DJIA fell -0.77% on Monday (30/01), followed by the S&P500 (-1.30%) and the Nasdaq (-1.96%). Wall Street weakened due to the wait and see attitude of investors ahead of the Fed's FOMC. In addition, the increase in the yield of the US T-note 10Y to a level of 3.55% also weighed on the index rate. Today, the market will be looking toward several data releases such as: 1) US CB Consumer Confidence Jan; 2) Germany Inflation Rate YoY Prel Jan; 3) Germany Unemployment Rate Jan.
Domestic Update
• The Government of Indonesia plans to conduct a SUN auction today offering 8 series targeting an issuance of IDR23-34.5tn. MNCS Comment: We believe, in spite of the rising yield trend recently, investors appetite on government bonds to remain high given the probability of slower interest rate hikes.
Company News
1. DSNG IJ will build a new Palm Oil Mill (PKS) in West Kalimantan in 3Q23E, and is targeted to operate in FY25F (Emiten News). MNCS Comment: The capex allocation for the construction of the new factory reaches IDR800 billion in FY23E. It is hoped that through the construction of the factory, it can increase the FFB processing capacity to 735 tons/hour. Currently, DSNG is traded at the level of 5.96x/0.94x PER/PBV.
2. WIKA IJ recorded the acquisition of new contracts in FY22 reaching IDR33.35 trillion (Market Bisnis). MNCS Comment: As a result, the realization of the target (IDR42.6 trillion) only reached 78.3% but the value of new contracts grew +24.4% YoY (vs IDR26.8 trillion in FY21). We view the value of new contracts in FY23E could be more conservative at IDR34-36 trillion. Currently, WIKA is traded at the level of 0.47x PBV.
3. SLIS IJ targets revenue of IDR550 billion in FY23E (Market Bisnis). MNCS Comment: SLIS posted revenue of IDR356.9 billion in 9M22, or the realization of the target (IDR470.8 billion) reached 75.8%. To achieve this target, the company will maximize the utilization of production capacity of 120,000. In addition, we see that the EV vehicle subsidy plan will be a positive catalyst for the company's performance. Currently, SLIS is traded at the level of 12.17x/1.78x PER/PBV.
IHSG Updates
JCI weakened -0.38% to 6,872.48 on Monday (30/01), followed by net foreign buy reaching IDR276.57 billion. The majority of sectors experienced weakening and weighed on the index, led by the technology sector (-1.37%) followed by the transportation sector (-0.99%). On the other hand, sectors that experienced strengthening were led by the health sector (+2.18%) followed by the non-cyclical sector (+0.25%). The index's weakness was in line with most Asian bourses. We see investors tend to wait and see ahead of the release of regional and domestic macroeconomic data such as PMI Manufacturing and Inflation in Jan-2023. On the other hand, the Rupiah exchange rate closed higher at the level of IDR14,970/USD. We estimate that the JCI will move in the price range of 6,850-6,890. Today's recommendation: BRMS, ISAT, MDKA, TKIM.
Corporate Actions
Public Expose: LABA
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