Global Market Highlights
The DJIA settled -0.42% lower on Tuesday (09/01), followed by S&P 500 (-0.15%) while Nasdaq (+0.10%) edged higher. Stocks closed in the mix as investors continued to readjust their Fed rate cut expectations as shown by the swap markets pricing in a 67% probability of a 25 bps cut in Mar-24 FOMC (vs. 100% probability last month). Encouraging sentiments came from the US Nov-23 trade deficit which unexpectedly shrank to -USD63.2 billion (vs. consensus’ -USD64.9 billion) which should be a positive factor for 4Q23 GDP. Today the market will be looking forward to several data releases such as: 1) China New Yuan Loans Dec-23; 2) US EIA Crude Oil Stocks Change 05 Jan-24; 3) US Wholesale Inventories MoM Nov-23.
Domestic Update
Bank Indonesia reports that the Consumer Confidence Index (CCI) in Dec-2023 reached a level of 123.8. MNCS Comment: The CCI in Dec-2023 increased compared to the realization in Nov-2023, which was 123.6. We note that this increase is supported by the strengthening of the Current Economic Conditions Index (CECI), which rose to 113.6 in Dec-2023 (vs 113.0 in Nov-2023), amid a decline in the Consumer Expectations Index (CEII) that dropped to 133.9 (vs 134.2 in Nov-2023). In terms of consumer spending patterns, it is noted that only consumers with an income of IDR 2.1-3 million/month experienced an increase in consumption levels compared to other income groups.
Company News
1. VTNY IJ has acquired 30% of PT Digitalization Device Indonesia’s (DPI) shares (Emiten News). MNCS Comment: We view this acquisition as positive considering the company’s target to become the largest employee super app in Indonesia. The licenses for the e-money and Dipay segments are an added value for the company and application users. It was recorded that throughout 9M23 the company's revenue grew ~125% YoY (the super app platform segment grew ~861% YoY). VTNY is currently trading at 164.40x/2.82x PER/PBV.
2. MIDI IJ increases the capital position for PT Lancar Wiguna Sejahtera (LWS) by IDR 70 billion (Emiten News). MNCS Comment: We assess the strengthening of capital for the LWS (Lawson Indonesia) positively, as it can be used to facilitate expansion. We note that the target expansion of Lawson outlets is set at 250 units in FY24E. Along with this store expansion, we anticipate an increase in the company's top-line performance going forward. Currently, MIDI is traded at a level of 25.30x/3.61X PER/PBV.
3. CSRA IJ will be focusing on plantation expansion in South Sumatra and build 3rd PKS factory in FY24. The company targets the factory to fully operate in 1H25 (Kontan). MNCS Comment: After a negative output 9M23 due to El Nino weather pattern, we view the plantation progression in South Sumatra region (area +14.48% and production +35.69% in 2H23 YoY) has the potential to increase the performance in longer run. CSRA is currently trading at level 8.24x/0.91x PER/PBV.
IHSG Updates
The JCI fell by -1.14% to 7,200.20 on Tuesday (09/01), amidst net foreign buy of IDR304.20 billion. Most sectors weakened and pushed the index down, led by the basic materials sector (-4.29%) and followed by the transportation & logistic sector (-1.64%). Meanwhile, some sectors strengthened, led by the consumer cyclicals sector (+1.23%) and followed by the financials sector (+0.65%). The index declined amid the positive growth of Dec-2023 Consumer Confidence Index (IKK) to level 123.8, as investors are waiting for the release of global macroeconomy dataset. The Rupiah closed higher at IDR15,520/USD. We estimate the IHSG will move within the price range of 7,173-7,235. Today's Recommendations: ADMR, ESSA, KLBF, TKIM.
Corporate Actions
IPO: SMLE (IDR175/share)
EGMS : TOYS, PGUN
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