Global Market Highlights
Wall Street closed in commemoration of Memorial Day. Investors breathed a sigh of relief after the Government and the House of Representatives reached a tentative agreement on settling the US debt ceiling, where the next steps will be discussed through Congress. In addition, the market will also pay close attention to JOLT's job openings employment market data in Apr-2023 which is estimated to fall to 9.4 million (vs Mar-2023 realization: 9.6 million). Today, the market will be looking toward several data releases such as: 1) US CB Consumer Confidence May; 2) US House Price Index MoM Apr; 3) US Dallas Fed Manufacturing Index May.
Domestic Update
• Based on Bank Indonesia records, MSME distribution slowed by 6.6% YoY in Apr-2023 or a value of IDR1,275 trillion (vs 8.5% YoY in Mar-2023). MNCS Comment: The financing of medium-scale MSMEs was observed to be lagging (-12.8% YoY) compared to small-scale SMEs (-8.1% YoY) amidst high interest rates and anticipation of an additional rate hike from the Fed, causing many MSME players to wait and see.
Company News
1. WIIM IJ will distribute cash dividends for the FY22 fiscal year of IDR151 billion, or the equivalent of IDR72.9 per share (Emiten News). MNCS Comment: Therefore, we estimate WIIM will offer a dividend yield of 5.6%. The amount of DPS increased compared to the previous year at IDR 21.6 per share, in line with the increase in net profit +41.1% YoY. Currently WIIM is trading at the level of 6.13x/1.69x PER/PBV.
2. WTON IJ recorded the acquisition of a new contract value in 4M23 of IDR2.55 trillion (Emiten News). MNCS Comment: The value of new contracts in 4M23 increased +30.8% YoY (vs IDR1.95 trillion in 4M22). Meanwhile, with a target of obtaining a new contract value in FY23E of IDR8.66 trillion, realization up to 4M23 reached 29.4%. Currently, WTON is traded at the level of 48.93x/0.34x PER/PBV.
3. BRMS IJ reported that since mid-May-2023, the capacity volume of the second factory in Palu has reached 1,000 tons of ore/day (Emiten News). MNCS Comment: The maximum volume capacity of the second factory is 4,000 tons of ore/day. Thus, the factory can increase its capacity to 2,000 tons of ore/day in Jun-2023, 3,000 tons of ore/day in Jul-2023, and 4,000 tons of ore/day in Aug-2023. Hence, we see room for growth in the future along with increased production volume. Currently, BRMS is traded at the level of 0.99x PBV.
IHSG Updates
JCI weakened -0.09% to 6,681.10 on Monday (29/05), followed by net foreign sell reaching IDR422.73 billion. The majority of sectors experienced weakening and weighed on the index, led by the transportation sector (-1.54%) followed by the cyclical sector (-1.04%). On the other hand, sectors that experienced strengthening were led by the technology sector (+1.83%) followed by the infrastructure sector (+0.24%). The index weakened amid the strengthening of the majority of Asian exchanges, where investors were watching credit growth in Apr-2023 slow down to +8.0% YoY (vs +9.8% YoY in Mar-2023). The rupiah closed lower at IDR14,970/USD. We estimate that the JCI will move in the price range of 6,599-6,702. Today's recommendation: AGII, BMRI, MDKA, SMGR.
Corporate Actions
Cum Dividend: BRIS (IDR9.25/share), BPII (IDR61/share), NAYZ (IDR1/share)
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