Global Market Highlights
DJIA strengthened +0.30% on Monday (10/04), followed by S&P500 (+0.10%) while Nasdaq (-0.03%). Wall Street closed mixed after last weekend's trading holiday. The positive catalyst came from the labor market which is still being monitored solidly, giving hope for the momentum of economic growth. Meanwhile, the market was starting to anticipate an increase in the FFR +25 bps at the FOMC in May-2023. Today, the market will be looking toward several data releases such as: 1) US Redbook YoY Apr 8; 2) US NFIB Business Optimism Index Mar; 3) UK BBA Mortgage Rate Mar.
Domestic Update
• Indonesia's foreign exchange reserves increased 3.49% MoM to USD145.2 billion (vs USD140.3 billion in Feb-2023), equivalent to 6.2 months of imports and servicing the government's external debt. MNCS Comment: If the Government Regulation concerning DHE is revised in Apr-2023 to apply DHE provisions not only to natural resource exporters but also to banks, there is potential for the increase in foreign exchange reserves to reach USD8 billion per month, which is equivalent to 5%.
Company News
1. ROTI IJ will distribute cash dividends of IDR607.69 billion or the equivalent of IDR106.55 per share (Emiten News). MNCS Comment: Therefore, we estimate that ROTI will offer a dividend yield of 7.06%. Meanwhile, the payout ratio reached 140.6% of FY22 net profit. Currently, ROTI is traded at the level of 21.61x/3.48x PER/PBV.
2. PTPP IJ posted a new contract value in 1Q23 of IDR4.08 trillion (Kontan). MNCS Comment: PTPP new contract value increased +32.0% YoY (vs IDR3.09 trillion in 1Q22). Meanwhile, the majority of the value of new contracts is still filled by the government with 64%. We estimate that new contract value growth will be relatively moderate this year, ahead of the political year. Currently, PTPP is traded at the level of 12.21x/0.30x PER/PBV.
3. MIKA IJ recorded a decrease in net profit -18.0% YoY to IDR1.0 trillion (vs IDR1.2 trillion in FY21) (Emiten News). MNCS Comment: Lower net profit was accompanied by a contraction in revenue by -7.0% YoY to IDR4.0 trillion (vs IDR4.4 trillion in FY21). In addition, OPEX recorded an increase of +19.2% YoY, which also suppressed the company's profitability. Currently, MIKA is traded at the level of 40.28x/7.49x PER/PBV.
IHSG Updates
JCI weakened -0.32% to 6,771.24 on Monday (10/04), followed by net foreign sell reaching IDR199.03 billion. The majority of sectors experienced weakness and weighed on the index, led by the technology sector (-3.14%) followed by the energy sector (-1.32%). On the other hand, the sector leading the strengthening was the non-cyclical sector (+1.08%) followed by the health sector (+0.18%). The index weakened amid an increase in domestic foreign exchange reserves in Mar-2023 to USD145.2 billion. Investors were keeping a close eye on developments in the US labor market which are still strong which are feared to give a hawkish signal for The Fed. The rupiah closed higher at IDR14,902/USD. We estimate that the JCI will move in the price range of 6,766-6,817 pending the release of Consumer Confidence Mar-23 data. Today's recommendation: ADRO, INCO, SSIA, TINS.
Corporate Actions
Cum Dividend: BDMN (IDR118.26/share), BNII (IDR7.72/share)
RUPS: AUTO
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