MNCS Morning Navigator

01 Juli 2024

MNCS Morning Navigator July 1, 2024

Global Market Highlights
The DJIA weakened by -0.12% on Friday (28/06), followed by the S&P 500 (-0.41%) and the Nasdaq (-0.71%). Wall Street corrected while investors were processing the rate cut bets following the release of the core PCE inflation which softened to 2.6% YoY (0.1% MoM) in May-2024, down from 2.8% YoY in Apr-2024 but remained above the Fed’s target of 2%. Today the market will be looking forward to several data releases such as: 1) Indonesia Core Inflation Rate Jun-2024; 2) Japan Consumer Confidence Jun-2024; 3) US S&P Global Manufacturing PMI Final Jun-2024.

Domestic Update
Bank Indonesia reported based on transactions from June 24-27, 2024, non-residents in the domestic financial market recorded net purchases of IDR19.69 trillion. The transactions were accumulated from net buys of IDR8.30 trillion in the SBN market, IDR2.23 trillion in the stock market, and net buys of IDR9.16 trillion in SRBI. MNCS Comment: YTD until June 27, 2024, non-resident transactions have recorded net sales in the SBN market amounting to IDR36.46 trillion, net outflows in the stock market amounting to IDR9.78 trillion, and net inflows of IDR123.21 trillion in SRBI. The foreign outflow in the stock market was mainly driven by the selling pressures in the big-cap stocks, especially the banking stocks amidst the looming uncertainty of global market conditions.

Company News
1. TRIN IJ recorded marketing sales of IDR608.6 billion up to 5M24 (Emiten News). MNCS Comment: Thus, marketing sales up to 5M24 grew by +79.3% YoY, achieving 50.7% of the FY24E target of IDR1.2 trillion. We expect the Sequoia Hills and Collins Boulevard projects to drive future marketing sales. However, we anticipate a slowdown in the property industry in 2H24, due to the reduction in the PPn DTP relaxation rate to 50% from the previous of 100%. TRIN is currently trading at the level of 0.8x PBV.
2. LSIP IJ will distribute dividends for FY23 amounting to IDR39 per share (Emiten News). MNCS Comment: Accordingly, we estimate a potential dividend yield of ~4.8%. We note that the total DPS decreased compared to FY22, which was IDR53 per share, in-line with the company’s net profit decline of -26.5% YoY in FY23. Additionally, we observe that the payout ratio remains stable at 34.9%. LSIP is currently trading at 5.13x/0.48x PER/PBV.
3. TOWR IJ will distribute IDR901 billion final dividends for FY23 (Kontan). MNCS Comment: This dividend distribution is translated into IDR18.1/share final dividend, excluding IDR298.7 billion interim dividends (IDR6/share). We note that the company has been consistently distributing the same value of dividends from the profit of FY21. The cash DPR for FY23 is 36.9% (vs 34.9% for FY22) with estimated yield of ~3.3%. TOWR is currently trading at 2.11x PBV.

IHSG Updates
The JCI rose by +1.37% to 7,063.58 on Friday (28/06), amid a non-resident outflow of IDR1.73 trillion. Almost all sectors experienced gains and supported the index, led by the transportation and logistics sector (+1.65%) and followed by the financial sector (+1.38%). On the flip side, the healthcare sector saw a decline (-0.45%). The index continued its upward trend for the third consecutive day, driven by investor optimism ahead of several macroeconomic data releases at the beginning of the month. Inflation in Jun-2024 is estimated to squeeze to +2.7% YoY (vs May-2024 realization: +2.84% YoY). The Rupiah closed higher at IDR16,375/USD. We estimate that the JCI will move in the price range of 7,013-7,102. Today's recommendations: AUTO, BFIN, BUKA, EXCL.

Corporate Actions
Cum Dividend: AMFG (IDR80/share), CAMP (IDR20/share), SMSM (IDR40/share)

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