Global Market Highlights
DJIA fell -0.45% on Tuesday (08/08), followed by the S&P500 (-0.42%) and the Nasdaq (-0.79%). Wall Street weakened amidst concern over the downgrade of the credit ratings for several US banks and weak Chinese export data for Jul-2023. Today, the market will be looking toward several data releases such as: 1) US MBA 30-Year Mortgage Rate 4-Aug-2023; 2) US MBA Mortgage Applications 4-Aug-2023; 3) Germany 10-Year Bund Auction.
Domestic Update
• The Consumer Expectations Index in Jul-2023 fell to a level of 133.2 (vs 137.5 in Jun-2023). MNCS Comment: Even though it is declining, the level remains optimistic (> 100). This decline aligned with the slowdown in income expectations, job availability and business activities. Meanwhile, the average proportion of income for consumption decreased slightly to 75.5% (vs 75.7% previously), in line with the rise in the proportion of income saved to 9.1% (vs 9.0% previously). We see consumers adopting a wait and see approach to the economic development situation in 2H23, particularly as election approaches.
Company News
1. MAIN IJ booked IDR130.6 billion increase in net loss in 1H23 (vs IDR66.6 billion net loss in 1H22) (IQ Plus). MNCS Comment: Increase in net loss amid revenue growth (+2.6% YoY), along with an increase in financial expenses and other expenses. Meanwhile, GPM edged down to 6.0% (vs 6.1% in 1H22). Currently, MAIN is traded at the level of 0.56x PBV.
2. ERAL IJ will be aggressive in expansion this year, with a target of 2x store ownership growth compared to the FY22 position of 54 stores (Kontan). MNCS Comment: Until mid-year, ERAL has operated ~80 stores. We look positively at the company's expansion efforts which are expected to encourage better performance going forward. In addition, we hope that ERAL can properly capture the momentum of sports trends, in line with its business portfolio. Currently, ERAL is traded at the level of 9.05x/2.28x PER/PBV.
3. KLBF IJ recorded a decrease in net profit -6.6% YoY to IDR1.5 trillion in 1H23 (vs IDR1.6 trillion in 1H22) (Emiten News). MNCS Comment: The decline in net profit, amid revenue which rose +9.4% YoY to IDR15.2 trillion (vs IDR13.9 trillion in 1H22), was in line with rising costs which contracted all margins. It was noted that the company's GPM/OPM fell to 40.7%/14.7% respectively (vs 41.8%/15.7% in 1H22). Currently, KLBF is traded at the level of 28.43x/4.32x PER/PBV.
IHSG Updates
JCI weakened -0.25% to 6,868.81 on Tuesday (08/08), followed by net foreign buy reaching IDR256.91 billion. A number of sectors experienced weakening and weighed on the index, led by the technology sector (-0.96%) followed by the cyclical sector (-0.57%). On the other hand, sectors that experienced strengthening were led by the infrastructure sector (+0.81%) followed by the property sector (+0.41%). The index should be corrected amid mixed Asian stock exchanges, where investors are watching the Consumer Confidence Index (CCI) in Jul-2023 which fell to a level of 123.5 (vs 127.1 in Jun-2023). The Rupiah closed lower at IDR15,218/USD. We estimate that the JCI will move in the price range of 6,860-6,890. Today's recommendation: BIRD, BRPT, INKP, PTBA.
Corporate Actions
IPO: MUTU (IDR108/share), LMAX (IDR200/share)
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