Global Market Highlights
DJIA fell -1.05% on Thursday (22/12), followed by the S&P500 (-1.45%) and the Nasdaq (-2.18%). Wall Street corrected as market players became increasingly concerned for a speculation of a more hawkish stance by the Fed going forward, after the release of employment data which still tends to be solid, where initial jobless claims as of 17/12/22 amounted to 216k (vs 222k on consensus) and Final GDP in 3Q22 it grew +3.2% QoQ (vs +2.9% QoQ on consensus). Today, the market will be looking toward several data releases such as: 1) US Core PCE Price Index YoY Nov; 2) US PCE Price Index YoY Nov; 3) US Durable Goods Orders MoM Nov.
Domestic Update
• BI decided to increase the BI7DRR +25 bps to 5.50%, in line with consensus expectations. MNCS Comment: BI's decision to raise the benchmark interest rate was a front-loaded, pre-emptive, and forward-looking step in curbing the inflation rate and strengthening the stability of the Rupiah exchange rate.
• Furthermore, the national Covid-19 daily rate had increased by 1,053 active cases (22/12).
Company News
1. DSNG IJ prepared a capex allocation in FY23F of IDR800 billion, one of which will be used for the construction of 2 palm oil mills (Market Bisnis). MNCS Comment: Currently, the company operates 12 palm oil mills with a capacity of up to 675 tonnes/hour. So, it is estimated that through the addition of the 2 mills, the total FFB processing capacity will be 735 tons/hour, and it is hoped that this will boost revenue growth going forward. Currently, DSNG is traded at the level of 5.39x/0.85x PER/PBV.
2. MTEL IJ acquired 6,012 Km of fiber optic cable (Kontan). MNCS Comment: The acquisition is a transformation process for 5G network services. In addition, an increase in the fiber optic cable network can also support the company's towers, where up to 9M22, the company recorded 35,051 tower units. It is hoped that through these efforts it can encourage the company's performance going forward. Currently, MTEL is traded at the level of 39.07x/1.92x PBV.
3. WSKT IJ recorded the acquisition of new contract values up to 11M22 reaching IDR13.7 trillion (Kontan). MNCS Comment: Acquisition of new contract value increased slightly +1.8% YoY (vs IDR13.5 trillion in 11M21). With the target of achieving a new contract value in FY22E of IDR30 trillion, the realization up to 11M22 was 45.7%. Currently, WSKT is traded at the level of 1.21x PBV.
IHSG Updates
JCI strengthened +0.06% to 6,824.43 on Thursday (22/12), followed by net foreign buy which reached IDR314.16 billion. The majority of sectors experienced strengthening and drove the index rate, led by the technology sector (+1.71%) and followed by the industrial sector (+1.00%). On the other hand, the sectors that experienced weakness were the raw materials sector (-0.59%) and the non-cyclical sector (-0.25%). The strengthening of the index was in line with the strengthening of Wall Street. We see that market players have responded positively to the announcement of BI's benchmark interest rate increasing by +25 bps to 5.5%, according to the consensus estimate. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,583/USD. We estimate that the JCI will move in the price range of 6,764-6,854 pending the release of M2 Money Supply YoY Nov data. Today's recommendation: BIPI, BSBK, MARK, SRTG.
Corporate Actions
Cum Dividend: OMRE (IDR500/share)
RUPS: BSSR
Public Expose: OASA
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