Global Market Highlights
DJIA gained +0.25% on Wednesday (12/07), followed by the S&P500 (+0.74%) and the Nasdaq (+1.15%). Wall Street sustained its gains, spurred by positive triggers such as Jun-2023 inflation data, which was at +3.0% YoY, lower than the consensus (+3.1% YoY) and May-2023 realization (+4.0% YoY), signaling an end to Fed rate hikes. Today, the market will be looking toward several data releases such as: 1) US PPI MoM Jun-2023; 2) UK GDP YoY May-2023; 3) UK GDP 3-Month Avg May-2023.
Domestic Update
• The accumulation of government bond auctions on Tuesday (11/07) reached IDR47.79 trillion, exceeding the previous 2 week auction of IDR37.56 trillion. MNCS Comment: This rise in the auction price, despite the potential for a further increase in the FFR, aligns with the potential reduction in the FY23E state budget deficit to 2.28% from the previous estimate of 2.84%. This could lead to a potential supply shrinkage, thus increasing demand.
Company News
1. ACES IJ is optimistic to record optimal performance in 2H23. This year, the company has opened 7 new outlets, from the target of 10-15 outlets in FY23E (Market Bisnis). MNCS Comment: We expect a positive turnaround in ACES' performance this year due to a rebound in SSSG and enhanced store productivity as a result from the new concept introduction. We also anticipate a gradual improvement in inventory levels, boosted by the 'BOOM SALES' promotion running from Jun-2023 to Aug-2023. Currently, ACES is traded at the level of 19.63x/2.06x PER/PBV.
2. INDY IJ through its entities, has established PT Kalista Soter Hastia (KSH) and PT Kalista Rotom Orbita (KRO). KSH will concentrate on the 4W EV leasing while KRO will target 2W. The total investment reached IDR52.5 billion (Market Bisnis). MNCS Comment: We view positively the company's diversification initiatives towards ESG and non-coal sectors, which could enhance its future performance. The planned allocation of over USD900 million to the non-coal business by FY25F suggests significant growth potential, as the current investment in KSH and KRO constitutes only 0.4% of the allocation target. This indicates a vast scope for the company to effectively utilize these funds. Currently, INDY is traded at the level of 2.95x/0.56x PER/PBV.
3. MAPA IJ plans to conduct a stock split (SS) with a ratio of 1:10 with cum date on July 14, 2023 (CNBC Indonesia). MNCS Comment: As a result, the total issued shares of the company will rise to 28.5 bn. It is expected that this split will improve the stock's liquidity and render the per-share price more affordable to retail investors. Currently, MAPA is traded at the level of 18.66x/4.35x PER/PBV.
IHSG Updates
JCI strengthened +0.17% to 6,808.21 on Wednesday (12/07), followed by net foreign buy reaching IDR544.33 billion. The majority of sectors experienced strengthening and drove the index rate, led by the technology sector (+1.43%) followed by the property sector (+0.89%). On the other hand, sectors that experienced a decline were led by the energy sector (-0.94%) followed by the raw materials sector (-0.29%). The index rose amid mixed results from Asian markets. Investors, anticipating the release of slowed US inflation data for Jun-2023, remained hopeful for a positive catalyst. The Rupiah closed higher at IDR15,078/USD. We estimate that the JCI will move in the price range of 6,780-6,840. Today's recommendation: ACES, BBCA, MDKA, SMGR.
Corporate Actions
RUPS: TRIS
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