Global Market Highlights
DJIA fell -0.55% on Friday (07/07), followed by the S&P500 (-0.29%) and the Nasdaq (-0.13%). Wall Street continued to weaken due to growing investor anxiety over a potential increase in the Federal Funds Rate (FFR) at the FOMC meeting on June 25-26. Furthermore, the Average Hourly Earnings data on Jun-2023 showed an increase of 4.4% YoY, higher than the consensus of 4.2% YoY. Today, the market will be looking toward several data releases such as: 1) US Consumer Credit Change May-2023; 2) US Wholesale Inventories MoM May-2023; 3) Japan Eco Watchers Survey Current Jun-2023.
Domestic Update
• Bank Indonesia (BI) reported a decrease in the country's foreign exchange reserves in Jun-2023 to USD137.5 billion, down USD1.8 billion from USD139.3 billion in May-2023. MNCS Comment: The decrease correlates with government foreign debt payments and a drop in leading export commodity prices, such as coal (-65% YTD). Looking ahead, BI plans to maintain rupiah stability by intervening against imported inflation, with the DHE Forex TD instrument expected to take on a more significant role.
Company News
1. PWON IJ aims to construct a superblock in Batam worth IDR5.4 trillion, with construction set to commence in FY24F (Emiten News). MNCS Comment: We view this growth initiative positively and anticipate it may boost the company's future performance. Furthermore, PWON's 1Q23 cash and cash equivalents stands at IDR7.5 trillion, providing sufficient funding alongside a relatively low debt-equity ratio (DER 0.3x). Currently, PWON is traded at the level of 9.67x/1.29x PER/PBV.
2. ANTM IJ has initiated operations at the East Halmahera ferronickel plant, commencing with the burner-on process. The plant has an annual capacity of 13,500 TNi (Market Bisnis). MNCS Comment: With ANTM's current smelter capacity at 27,000 TNi per year, this new plant could potentially elevate the total capacity to 40,500 TNi per annum, which may boost overall production in the future. Currently, ANTM is traded at the level of 7.13x/1.87x PER/PBV.
3. SLIS IJ aims to manufacture 20,000 electric motorbikes per month (Investor ID). MNCS Comment: In FY22, SLIS produced 1,734 electric motors. With subsidies being introduced for electric motorbike purchases and attractive offering facilities, we foresee a surge in demand that will benefit SLIS moving forward. Currently, SLIS is traded at the level of 11.76x/1.33x PER/PBV.
IHSG Updates
JCI weakened -0.60% to 6,716.46 on Friday (07/07), followed by net foreign buy reaching IDR38.44 billion. The majority of sectors experienced weakening and weighed on the index, led by the transportation sector (-1.55%) followed by the energy sector (-1.06%). On the other hand, the sector that experienced strengthening was the raw materials sector (+0.49%) followed by the cyclical sector (+0.31%). The index fell in line with most Asian markets, as investors reacted to the Jun-2023 RI foreign exchange reserve data, and anticipated the upcoming Consumer Confidence Index data for Jun-2023. The Rupiah closed lower at IDR15,135/USD. We estimate that the JCI will move in the price range of 6,696-6,740 pending the release of Consumer Confidence Index Jun-2023 data. Today's recommendation: BRPT, IMJS, NSSS, TINS.
Corporate Actions
Cum Right Issue: MPPA (IDR80/share), SLIS (IDR168/share)
Cum Dividend: SMDR (IDR30/share)
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