MNCS Morning Navigator

04 Januari 2023

MNCS Morning Navigator January 4, 2023

Global Market Highlights
DJIA fell -0.03% on Tuesday (03/01), followed by the S&P500 (-0.40%) and the Nasdaq (-0.76%). Wall Street corrected after the release of US S&P Global Manufacturing PMI data in Dec-2022 which contracted to a level of 46.2 points, or lower than the previous month's level of 47.7 points. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI Dec; 2) Germany S&P Global Services PMI Final Dec; 3) France Inflation Rate YoY Prel Dec.

Domestic Update
• Government succeeded in issuing IDR19.2 trillion SUN in the initial auction (3/1/23). The total incoming bid amounting to IDR28.3 trillion. MNCS Comment: SUN issuance is lower than the IDR23 trillion indicative target lower limit. We believe that investors tend to wait & see during the momentum of portfolio rebalancing earlier this year. The most demanded series is FR0096 which became the 10 year benchmark for 2023 with an incoming bid of IDR9.5 trillion.

Company News
1. ADRO IJ sets the dividend distribution conversion rate at IDR15,572 (Market Bisnis). MNCS Comment: Thus, ADRO has the potential to distribute interim dividends for the FY22 fiscal year reaching IDR7.8 trillion or equivalent to IDR251.28 per share. With the closing price of IDR3,520, the offered dividend yield potentially reaches 7.1%. Currentlym ADRO is traded at the level of 2.91x/1.28x PER/PBV.
2. ABMM IJ targets coal production of 12.4 million tonnes in FY23E (Market Bisnis). MNCS Comment: The company's target will be supported by a capex allocation of ~USD200 million in FY23E. We view coal prices to remain high short-term and begin to decline in 2H23E, where World Bank and Fitch Rating project Newcastle thermal coal prices to be in the range of USD220-240/mt in FY23E. Currently, ABMM is traded at the level of 2.68x/1.38x PER/PBV.
3. RAJA IJ won the oil and gas block tender for the Jabung Tengah working area, Riau (Investor ID). MNCS Comment: It is hoped that through this tender, it can boost the company's performance going forward, where it is estimated that oil and gas production in the Central Jabung working area can reach 200 MMBOE. Currently, RAJA is traded at the level of 47.27x/2.78x PER/PBV.

IHSG Updates
JCI strengthened +0.55% to 6,888.76 on Tuesday (03/01), followed by net foreign sell which reached IDR146.49 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the infrastructure sector (+1.97%) and followed by the raw materials sector (+1.75%). On the other hand, the sectors that experienced weakness were the property sector (-0.50%) and the financial sector (-0.13%). We see investors were looking closely at China's manufacturing PMI in Dec-2022 at 49 points, or higher than the consensus estimate of 48.8 points. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,598/USD. We estimate that the JCI will move in the price range of 6,855-6,932. Today's recommendation: AALI, JKON, JSMR, PTBA.

Corporate Actions

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