Global Market Highlights
DJIA gained +0.07% on Friday (18/08), while the S&P500 (-0.01%) and Nasdaq (-0.20%). Wall Street closed mixed, where investors were cautious for the negative impact of the high global interest rates on the market. Investors also did a wait and see approach in anticipation of stimulus in China's property sector. Today, the market will be looking toward several data releases such as: 1) US 6-Month Bill Auction; 2) France 6-Month BTF Auction; 3) Germany PPI Jul-2023.
Domestic Update
• Bank Indonesia reported, based on transaction data from 14 to 16 August 2023, non-residents on the domestic financial market reported a IDR6.79 trillion net, consisting of IDR3.65 trillion net sell on the bond market and IDR3.14 trillion net selling on the stock market. MNCS Comment: Even though the bond market and stock market recorded outflows, on a YTD basis they were still in an inflow position, namely IDR94.95 trillion/IDR4.82 trillion respectively. We see outflows occurring in the bond market in line with the more favorable 1M JIBOR yields against the 10Y bond yields, thus triggering outflows, as reflected in the increase in yields to 6.42% (vs 6.31% on 10-Aug).
Company News
1. HEXA IJ plans to expand its business unit line into construction equipment rental, property and leasing, etc. NPV reached USD 26.8 million with a payback period of 3 years and 8 months (Emiten News). MNCS Comment: We view positively the company's efforts to develop its business portfolio which is expected to boost the company's performance going forward. We see the downstream mining industry as a momentum that can be achieved by companies. Furthermore, the expansion is not only through construction tools, but also trucks, to agricultural tools and other supporting ecosystems. Currently, HEXA is traded at the level of 6.50x/2.05x PER/PBV.
2. SMGR IJ reported sales volume up to 7M23 reaching 17 million tons domestically and 4 million tons for exports (Kontan). MNCS Comment: We expect a sales volume of ~38 million tons in FY23E, so that realization up to 7M23 reached 55.3%. Sales volume in 2H23 will be supported by: 1) marketing sales in a stable property market; 2) finalization of 58 national strategic projects. Currently, SMGR is traded at the level of 26.21x/1.09x PER/PBV.
3. HEAL IJ realized a capex allocation of IDR640 billion in 1H23 (Investor ID). MNCS Comment: In 1H23, realized capex reached IDR641.7 billion, an increase of +6.1% YoY (vs IDR605.0 billion in 1H22), or realization reached 53.5% of the target in FY23E. Realization of capex is still in-line with the target so as to support the company's expansion in the pipeline, where the construction of hospitals in Ciawi and Aceh is targeted to open in 3Q23. Currently, HEAL is traded at the level of 52.15x/5.94x PER/PBV.
IHSG Updates
JCI weakened -0.59% to 6,859.91 on Friday (18/08), followed by net foreign sell reaching IDR258.20 billion. A number of sectors experienced weakening and weighed on the index, led by the industrial sector (-1.36%) followed by the transportation sector (-1.06%). On the other hand, sectors that experienced strengthening were led by the energy sector (+0.39%) followed by the infrastructure sector (+0.07%). The index weakened along with other Asian exchanges, where investors were watching the release of Japanese inflation data in Jul-2023 of +3.3% YoY, or exceeding consensus at +2.5% YoY. In addition, concerns over exposure from the Chinese property market also contributed to the negative sentiment for the market. The Rupiah closed at IDR15,285/USD. We estimate that the JCI will move in the price range of 6,838-6,875. Today's recommendation: ACES, BFIN, BMRI, EXCL.
Corporate Actions
RUPS: HMSP, LUCY, BULL
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