Global Market Highlights
The DJIA climbed up by +1.03% on Wednesday (20/03), followed by S&P 500 (+0.89%) and Nasdaq (+1.25%). Wall Street continued its upward trend, supported by positive catalysts from the dovish comments of The Fed, maintaining a projected 75 bps rate cut in FY24E. However, we perceive The Fed to exercise caution in implementing the rate cut, awaiting certainty regarding the slowdown of inflation to their target levels. Another bullish factor for the stock market comes from The Fed, which raised its US GDP growth projection to 2.1% YoY in FY24E, from 1.4% YoY previously. Today, the market will await several data releases, including: 1) Germany HCOB Manufacturing PMI Flash Mar-2024; 2) UK BoE Interest Rate Decision; 3) US Current Account 4Q23.
Domestic Update
Bank Indonesia decided to maintain the BI-rate at 6.00%, the deposit facility interest rate at 5.25%, and the lending facility interest rate at 6.75% at the Board of Governors Meeting (RDG) on March 19-20, 2024. MNCS Comment: We view the decision to keep the BI-Rate stable as consistent with the focus of a pro-stability monetary policy, which is expected to maintain the stability of the Rupiah exchange rate and ensure that the inflation rate remains within the target range of 2.5% ± 1% this year. In the meeting, Bank Indonesia also forecasted Indonesia's economic growth to be in the range of 4.7% - 5.5% (compared to the global economic growth forecast of 3.00%).
Company News
1. PJAA IJ raised their target number of visitors during the 2024 Idul Fitri holiday by +20% YoY, reaching ~720k visitors (Kontan). MNCS Comment: This figure is a reflection of management's target of ~80k visitors/day (vs. 35-40k visitors/day on a normal weekend) during the 9-day Idul Fitri holiday in 2024. Additionally, PJAA is running the Grand Victory Festival event with one of its superior programs being free entry to the Ancol area in the afternoon. In FY24E, the number of visitors is expected to grow +10% YoY. PJAA is currently trading at 6.02x/0.86x PER/PBV.
2. BTPS IJ will distribute dividends for FY23 amounting to IDR540.5 billion (DPR 50%), or equivalent to IDR70.15 per share (Kontan). MNCS Comment: Thus, we estimate that BTPS will offer a dividend yield of 5.3%, higher than the 4-year average of 2.31%. We note that the DPS has decreased from the previous period by IDR92.5 per share, in line with the decrease in net profit of -39.3% YoY in FY23. BTPS is currently trading at 1.16x PBV.
3. SGRO IJ prepares IDR400-700 billion capex for FY24, with 40% allocated to plantation activities and 60% to non-plantation activities (Kontan). MNCS Comment: After being overshadowed by the El-Nino impacts last year, the company booked a +6.43% YoY of revenue growth and followed by -47.68% YoY decline of net profit in 9M23. Management is optimistic that the production of FFB and CPO will increase as strategic approaches have been prepared to deal with the moderate El-Nino conditions and the upcoming La-Nina in the 2H24. However, revenue and net income growth for FY24 are anticipated to fluctuate following market mechanisms and prices, with CPO prices expected to remain solid in 1H24. SGRO is currently trading at 8.62x/0.66x PER/PBV.
IHSG Updates
IHSG closed flat -0.08% to 7,331.13 on Wednesday (20/03), followed by foreign net buy of IDR354.4 billion. Most sectors are still experiencing strengthening, led by the health sector (+2.05%) and cyclicals (+1.02%). On the other hand, sectors that hinder the index include the technology (-3.14%) and financial sectors (-0.35%). Foreign inflow weakened from the previous day in line with the rate hold decision by BI which was in line with the market’s anticipation, although regionally the wait-and-see attitude ahead of the Fed's FOMC was still in place, reflected in Asian exchanges which closed mixed. The Rupiah closed flat at IDR 15,715/USD. We estimate that the JCI will move in the price range of 7,284-7,371. Today's recommendations: BREN, BRMS, DOID, MDKA.
Corporate Actions
AGMS: BTPN
EGMS: CPRO, TIRA, VRNA
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