Global Market Highlights
The DJIA gained +0.58% higher on Monday (08/01), followed by S&P 500 (+1.41%) and Nasdaq (+2.20%). Equities' strong run was bolstered by the technology sector on the new AI-chip product launch as well as the retreat in UST 10-yr yields after the Fed hinted on slowing its balance sheet reduction to maintain market liquidity. Market’s inflation expectations were also kept at bay after a -4.08% tumble in crude prices, following Saudi Arabia’s official selling price reduction for February-24. Today the market will be looking forward to several data releases such as: 1) EA Unemployment Rate Nov-23; 2) US Balance of Trade Nov-23; 3) Germany Industrial Production Nov-23.
Domestic Update
Bank Indonesia reports that the position of domestic reserve assets reached USD146.4 billion in Dec-2023. MNCS Comment: The position of domestic reserve assets in Dec-2023 increased compared to the realization in Nov-2023, which was USD138.1 billion. This increase was driven by tax and service receipts, as well as the withdrawal of government foreign debt (ULN). The reserve assets position reflects import resilience and government ULN payments for 6.5 months. With the improvement in foreign exchange reserves, we anticipate that this could serve as a cushion for USD/IDR.
Company News
1. INTP IJ prepares a capex (capital expenditure) allocation of IDR1.2 - IDR1.5 trillion from the company's internal cash for FY24E (Kontan). MNCS Comment: We noted that the majority of the capex is allocated for regular repair maintenance and replacement purposes to support operations. The company is optimistic that revenue performance in FY24E can grow, supported by additional volume from the acquisition of PT Semen Grobogan and a potential growth in cement demand by 2 - 3% YoY in FY24E. INTP is currently trading at 20.10x/1.67x PER/PBV.
2. UNTR IJ projects the sales volume of coal in its business unit could reach 12 million tons in FY24E (Market Bisnis). MNCS Comment: We note that the sales volume reached 10.5 million tons until Nov-2023, with an estimated figure of 11 million tons in FY23E. We see the uptick targets to offset the decline in ASP amid the coal price decrease, which we anticipate could act as a buffer for top-line. Currently, UNTR is traded at a level of 4.20x/1.15X PER/PBV.
3. SMDR IJ budgets USD280 mn capex to add 12 new ships in FY24: 6 container ships, 2 gas tankers, 2 tugboats and 2 barges, expanding services routes to Middle East and Southeast Asia (Market Bisnis). MNCS Comment: We foresee the additional units and shipping route as a positive impact to support the company’s business growth after a significant drop of revenue in 9M23. SMDR is currently trading at level 5.9x/0.56x PER/PBV.
IHSG Updates
The JCI slumped by -0.91% to 7,283.58 on Monday (08/01), amidst net foreign buy of IDR840.64 billion. Most sectors declined and pushed the index down, led by the basic materials sector (-2.18%) and followed by the infrastructures sector (-0.90%). On the other hand, some strengthened sectors were led by the properties & real estate sector (+0.51%) and followed by the healthcare sector (+0.22%). The index weakened amid positive reserve assets performance in Dec-2023, as investors tend to wait and see ahead of the release of several global macroeconomic data this week. The Rupiah closed lower at IDR15,525/USD. We estimate the IHSG will move within the price range of 7,245-7,302. Today's Recommendations: ARNA, ASSA, BBCA, BEST.
Corporate Actions
IPO: NICE (IDR438/share)
EGMS : LTLS
Right Issue : LUCY (23:50)
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