Global Market Highlights
The DJIA rose by +0.33% on Friday (27/09). Meanwhile the S&P 500 (-0.13%) and the Nasdaq (-0.39%) declined. Wall Street closed mixed as markets digested varied economic data. The core PCE price index, an inflation gauge, increased by 0.1% MoM in Aug-2024, lower than both the previous month and estimates (0.2%). Annually, the PCE price index met expectations at 2.7% YoY (vs 2.6% in Jul-2024). This aligns with the Fed's view of slowing inflation, also reflected in the University of Michigan survey, where year-ahead inflation expectations eased to 2.7% in Sep-2024 (vs 2.8% in Aug-2024). Today the market will be looking forward to several data releases such as: 1) Japan Retail Sales Aug-2024; 2) China Caixin Composite PMI Sep-2024; 3) US Chicago PMI Sep-2024.
Domestic Update
Effective January 1, 2026, BI will discontinue the publication of the Jakarta Interbank Offered Rate (JIBOR). MNCS Comment: The National Working Group on Benchmark Reform (NWGBR) has issued guidelines to assist market participants in transitioning to alternative reference rates, including incorporating fallback clauses in contracts. We believe that discontinuing JIBOR will enhance Indonesia’s financial market credibility, aligning with global trends toward greater transparency and reliability in benchmark rates, particularly in response to manipulation concerns seen in global interbank rates like LIBOR.
Company News
1. UNTR IJ will distribute an interim dividend of IDR2.4 trillion or the equivalent of IDR667/share. MNCS Comment: We estimate a potential yield of approximately ~2.4% with a payout ratio of 25.4% of total net profit as of 1H24. Cum dividend in the regular market and negotiated market on October 7, 2024. UNTR is currently trading at 5.42x/1.2x PER/PBV.
2. ABMM IJ recorded a decrease in net profit by -51.6% YoY to USD91.2 million in 1H24. MNCS Comment: This decline in net profit was driven by a revenue drop of -24.8% YoY to USD573.9 million in 1H24. Meanwhile, COGS only decreased by -1.9% in the same period. As a result, GPM/NPM was pressured down to 10.9%/15.9% (vs. 31.7%/24.7% in 1H23). ABMM is currently tradIng at 4.19x/0.97x PER/PBV.
3. ASSA IJ has absorbed capex amounting to IDR577.6 billion as of 1H24. MNCS Comment: We note that this capex absorption represents approximately 38% of the total capex allocation for FY24. The capex funds are utilized to add logistics fleet units. Therefore, we see this as positively contributing to the company's revenue growth in line with the increase in logistics flow of goods. ASSA is currently trading at 10.71x/1.39x PER/PBV.
IHSG Updates
The JCI weakened by -0.61% to 7,696.92 in Friday (27/09), followed by a net foreign sell of IDR493.27 billion. Most sectors experienced declines, led by the infrastructure sector (-0.71%) and followed by the industrial sector (-0.42%). On the other hand, the sectors that posted gains were led by the energy sector (+1.10%) and followed by the property and real estate sector (+0.60%). The index declined amid stronger Asian markets, with outflows after China's stimulus relaxation continuing to weigh on sentiment. In addition, investors remained wait and see ahead of the release of the US core PCE price index for Aug-2024, which may provide clues regarding the US economy and potential interest rate cuts by the Fed. The Rupiah closed higher at IDR15,125/USD. We estimate that the JCI will move in the price range of 7,671-7,723. Today's recommendations: AVIA, DOID, INCO, INKP.
Corporate Actions
AGMS: UANG
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