Global Market Highlights
Wall Street closed on Thursday (23/11) commemorating Thanksgiving day. Investors are wait and see mode ahead of the release of US PMI Manufacturing Flash data in Nov-2023, which expected to decline to its contraction level at 49.8 (vs 50 in Oct-2023). This enhances investor optimism that The Fed's benchmark interest rate hike era has already peaked. Meanwhile, PMI Manufacturing Flash in Germany for Nov-2023 rebounded to the level of 42.3 (vs 40.8 in Oct-2023). Today, the market will be looking toward several data releases such as: 1) UK Consumer Confidence Nov-23; 2) Germany Ifo Business Climate Nov-23; 3) Japan Inflation Rate YoY Oct-23.
Domestic Update
Bank Indonesia (BI) maintained the BI7DRR at 6.0% in the BI RDG decision in Nov-2023. MNCS Comment: This decision aligns with consensus expectations. The focus remains on high economic uncertainty and global financial markets; setting the interest rate level is done to mitigate the impact of imported inflation in the future. Additionally, BI plans to optimize the empowerment of SRBI and SVBI instruments to support the future value of the Rupiah, both of which are well-received by the market.
Company News
1. UNVR IJ will distribute an interim dividend of IDR2.4 trillion, or equivalent to IDR63 per share (Market Bisnis). MNCS Comment: Hence, we estimate that UNVR will offer a dividend yield of 1.8%. With a net profit of IDR4.2 trillion in 9M23, the payout ratio reaches 57.4%. Currently, UNVR is traded at a level of 24.18x/25.10x PER/PBV.
2. HMSP IJ expands by opening SKT factory facilities worth USD42 million, or equivalent to IDR638 billion, in Blitar and Tegal (Market Bisnis). MNCS Comment: We assess HMSP's expansion in the SKT segment positively. The increase in cigarettes excise tariffs has led to a decrease in revenue in the SKM and SPM segments, while the SKT segment continues to rise due to consumer downgrading behavior. With production expansion in the SKT segment, we see the potential for increased profitability in the future. Currently, HMSP is traded at a level of 13.78x/4.07x PER/PBV.
3. UNTR IJ targets heavy equipment sales to reach 4,000 units in FY24F (Market Bisnis). MNCS Comment: The target for heavy equipment sales is down compared to the FY23E figure of 6,000 units. We see the lower target on the back of the decline in demand, which is attributed to the moderation of the windfall effect following the decline in global coal prices. With this target reduction, we anticipate a moderation in UNTR's performance going forward. Currently, UNTR is traded at a level of 4.11x/1.12x PER/PBV.
IHSG Updates
The JCI strengthened by +1.41% to 7,004.34 on Thursday (23/11)), followed by a net foreign buy of IDR940.74 billion. Almost all sectors experienced gains and driving the index, led by the technology sector (+8.60%), followed by the infrastructure sector (+6.22%). On the other hand, the healthcare sector experienced a decline of -1.11%. The index's strength aligns with most other Asian markets, whereas investors respond positively to Bank Indonesia's decision to maintain the BI7DRR and a temporary ceasefire in the Middle East conflict. The Rupiah closed higher at IDR15,555/USD. We estimate the IHSG will move within the price range of 6,955-7,020. Today's Recommendations: CTRA, NCKL, SMRA, WIFI.
Corporate Actions
EGMS : FREN, JARR
Cum Dividend : AMOR (IDR25/share)
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