Global Market Highlights
DJIA fell -1.08% on Thursday (24/08), followed by the S&P500 (-1.35%) and the Nasdaq (-1.87%). Wall Street weakened, as investors initiated a sell-off following the release of improved weekly unemployment claims data. These developments raised concerns that the Fed might maintain a hawkish stance ahead of the Jackson Hole symposium. Today, the market will be looking toward several data releases such as: 1) US Jackson Hole Symposium; 2) US Michigan Consumer Sentiment Final Aug-2023; 3) Germany GDP Growth Rate YoY Final 2Q23.
Domestic Update
• Bank Indonesia (BI) is targeting a credit growth of 10% - 12% in 2024, up from the 2023 target of 9% - 11%. MNCS Comment: We see this increase in the target in line with projections of interest rate pivoting in tandem with global central banks, which are adopting expansive monetary policies. Additionally, the still relatively lax banking liquidity also plays a role. Moreover, an improved domestic economic situation is expected to be the key driver.
Company News
1. JSMR IJ recorded net profit growth of +56.3% YoY to IDR1.1 trillion in 1H23 (vs IDR734.8 billion in 1H22) (Kontan). MNCS Comment: The increase in net profit was supported by revenue growth +18.3% YoY to IDR8.9 trillion (vs IDR7.5 trillion in 1H22), as well as a decrease in financial expenses -22.8% YoY. NPM increased to 12.9% (vs 9.7% in 1H22). Currently, JSMR is traded at the level of 11.25x/1.45x PER/PBV.
2. UNTR IJ reported that sales of Komatsu heavy equipment units up to 7M23 reached 3,551 units (Kontan). MNCS Comment: Sales of heavy equipment units up to 7M23 increased +4.5% YoY (vs 3,399 units in 7M22). With a sales target of 6,000 units of heavy equipment in FY23E, realization up to 7M23 reached 59.2%. Currently, UNTR is traded at the level of 4.44x/1.39x PER/PBV.
3. BRMS IJ plans to continue its expansion by constructing a third factory in Palu with a capacity of 4,000 tons per day, as well as the development of three upcoming projects (Market Bisnis). MNCS Comment: In 1H23, BRMS completed the construction of its second factory, thereby increasing the total capacity to 4,500 tons of ore. It is targeted to be fully operational by 8M23. With the planned expansion of the third factory, the total capacity is expected to reach 8,500 tons of ore per day. It is hoped that the factory expansion, along with the development of new projects, will boost the company's performance in the future. Currently, BRMS is traded at a level of 1.63x PBV.
IHSG Updates
JCI weakened -0.32% to 6,899.39 on Thursday (24/08), followed by net foreign sell reaching IDR198.12 billion. A number of sectors experienced weakening and weighed on the index, led by the industrial sector (-1.35%) followed by the energy sector (-1.27%). On the other hand, sectors that experienced strengthening were led by the raw materials sector (+1.46%) followed by the transportation sector (+0.32%). The movement of the JCI underperformed with the strengthening movement of Asian stock exchanges, where investors are paying close attention to Bank Indonesia's decision to maintain the BI7DRR benchmark rate amid potential spreads with an increasingly narrowing FFR. The Rupiah closed higher at IDR15,245/USD. We estimate that the JCI will move in the price range of 6,890-6,920 pending the release of M2 Money Supply YoY Jul-2023 data. Today's recommendation: BUKA, ERAA, INKP, ESSA.
Corporate Actions
RUPS: CFIN, FOOD, IKBI
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