Global Market Highlights
DJIA fell -1.72% on Tuesday (07/03), followed by the S&P500 (-1.53%) and Nasdaq (-1.25%). Wall Street closed lower as the Fed's hawkish tone called for an aggressive rate hike beyond market estimates, if the inflation rate is still not under control. Currently, the majority consensus favors a +50 bps hike probability at the FOMC Mar-2023 (vs +25 bps prior). Today, the market will be looking toward several data releases such as: 1) US Fed Chair Powell Testimony; 2) US Balance of Trade Jan; 3) US ADP Employment Change Feb.
Domestic Update
• In their continued efforts to control food price inflation, the Ministry of Trade opened import taps for vulnerable food ingredients such as soybeans, flour, sugar and meat, while the Ministry of Finance announced that it was still calculating the budget for social assistance during the period from March to May. MNCS Comment: The food subsidy budget needs to be prioritized by the government to support economic activity, bearing in mind that the electric vehicle subsidy program also coincides with the start of the fasting month of Ramadan.
Company News
1. BALI IJ posted net profit growth of +12.5% YoY to IDR212.1 billion in FY22 (vs IDR188.5 billion in FY21) (Emiten News). MNCS Comment: Net profit growth was supported by revenue increase +3.4% YoY to IDR978.4 billion (vs IDR946.6 billion in FY21), as data, internet and cable TV segment revenue increased (+5.5% YoY). In addition, the decrease in the effective tax rate to 10.4% (vs 12.4% in FY21) also contributed to an increase in NPM to 21.7% (vs. 19.9% in FY21). Currently, BALI is traded at the level of 14.66x/1.27x PER/PBV.
2. BJTM IJ plans to distribute a cash dividend of IDR53.08 per share for the FY22 financial year, awaiting shareholder approval at the AGMS in April 2023 (Emiten News). MNCS Comment: Therefore, BJTM has the potential to distribute a dividend yield of up to 7.2% with reference to the 7-Mar'2023 closing price of IDR740/share. With FY22 net profit reaching IDR1.54 trillion, the estimated payout ratio reaches ~51.8%, relatively flat with the FY21 fiscal year of around 51.6%. Currently, BJTM is traded at the level of 1.02x PBV.
3. INDY IJ obtained a credit facility worth USD250 million for the development and construction of a gold mine at the Awak Mas project (Emiten News). MNCS Comment: We view positively the company's efforts through business diversification, to create business continuity and slowly release revenue dependence from the coal business. In 9M22, new minerals segment revenues accounted for 0.1% of total revenue. Currently, INDY is traded at the level of 1.70x/0.70x PER/PBV.
IHSG Updates
JCI weakened -0.59% to 6,766.76 on Tuesday (07/03), followed by net foreign sell reaching IDR377.93 billion. All sectors experienced weakening and suppressed the index, led by the transportation sector (-2.74%) followed by the energy sector (-1.70%). The index weakened amid the position of foreign exchange reserves in Feb-2023 which increased by USD900 million to USD140.3 billion, where investors tended to wait and see ahead of the reading of the statement by the Chair of the Fed before the US congress. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,350/USD. We estimate that the JCI will move in the price range of 6,760-6,787 pending the release of Consumer Confidence Feb data. Today's recommendation: MTEL, PTBA, PWON, SLIS.
Corporate Actions
IPO: TRON (IDR180/share), SAGE (IDR100/share), CUAN (IDR220/share)
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