Global Market Highlights
DJIA strengthened +0.54% on Wednesday (23/08), followed by the S&P500 (+1.10%) and the Nasdaq (+1.59%). Wall Street managed to close higher, where investors speculated that The Fed will hold off on raising interest rates at the upcoming FOMC. In addition, new home sales in Jul-2023 were recorded at 714k, or grew +4.4% MoM and were above the consensus estimate of 705k. Today, the market will be looking toward several data releases such as: 1) US Jackson Hole Symposium; 2) US Durable Goods Orders MoM Jul-2023; 3) US Initial Jobless Claims 19-Aug-2023.
Domestic Update
• Consensus expects Bank Indonesia to maintain the BI7DRR benchmark interest rate at 5.75% during the Board of Governor’s meeting on August 24, 2023. MNCS Comment: This expectation aligns with the increasingly manageable inflation rate and minimal exposure to future El-Nino risks. However, with a narrowing spread with The Fed, there's pressure on the rupiah exchange rate. We see Bank Indonesia's efforts through liquidity enhancement and market intervention as potential short-term solutions.
Company News
1. GEMS IJ plans to distribute an interim dividend of USD325 million, or equivalent to IDR4.98 trillion (Kontan). MNCS Comment: Thus, the estimated DPS is IDR846.93 per share, potentially offering a dividend yield of 11.2%. With net profit in 1H23 reaching USD333.5 million, the payout ratio is 97.5%. Currently, GEMS is traded at the level of 4.43x/3.34x PER/PBV.
2. ADRO IJ recorded a decrease in net profit -27.9% YoY to USD873.8 million in 1H23 (vs USD1.2 billion in 1H22) (Kontan). MNCS Comment: Decreased net profit in line with revenue which fell -1.8% YoY. In addition, COGS increased +34.1% YoY, thereby suppressing ADRO's profitability. OPEX also increased +100.0% YoY and brought a decrease in operating profit -37.7% YoY. All margins experienced a contraction, where GPM/ NPM was 41.6%/25.1% (vs 57.2%/34.2% in 1H22). Currently, ADRO is traded at the level of 3.29x/0.89x PER/PBV.
3. ADHI IJ recorded new contract values up to 7M23 reaching IDR18.8 trillion (Kontan). MNCS Comment: The new contract value increased +22.9% YoY (vs IDR15.3 trillion in 7M22). Meanwhile, with a target of obtaining a new contract value of IDR27 trillion in FY23E, realization up to 7M23 reached 69.6%. Currently, ADHI is traded at the level of 0.42x PBV.
IHSG Updates
JCI strengthened +0.07% to 6,921.41 on Wednesday (23/08), followed by net foreign buy reaching IDR585.01 billion. A number of sectors experienced strengthening and boosted the index rate, led by the raw materials sector (+1.63%) followed by the transportation sector (+0.95%). On the other hand, sectors that experienced weakening were led by the infrastructure sector (-0.30%) followed by the financial sector (-0.27%). The JCI movement was in-line with the strengthening Asian stock exchanges, where investors tended to be optimistic ahead of the reading of the benchmark interest rate decision at the Bank Indonesia Board of Governors' Meeting today. The Rupiah closed higher at IDR15,295/USD. We estimate that the JCI will move in the price range of 6,907-6,934 pending the release of Loan Growth YoY Jul-2023 and Lending and Deposit Facility Rate Aug-2023. Today's recommendation: AKRA, BIRD, INDF, MTEL.
Corporate Actions
RUPS: GTBO, MBTO
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