Global Market Highlights
The DJIA soared by +1.85% on Tuesday (16/07), notching a new all-time high, followed by the S&P 500 (+0.64%) and the Nasdaq (+0.20%). Wall Street continued its rally following another evidence of soft-landing indications from the consumer purchase power as the retail sales on Jun-2024 was reported with a monthly growth of 0% MoM, meeting the consensus and lower than previous month on 0.3% MoM. Meanwhile on a yearly basis, the performance recorded a 2.3% YoY growth, above market expectation of 2.1% YoY, but still slower than the rise in May-2024 (2.6% YoY). Today the market will be looking forward to several data releases such as: 1) Indonesia Interest Rate Decision; 2) Singapore Balance of Trade Jun-2024; 3) US Industrial Production Jun-2024.
Domestic Update
The Ministry of Finance (Kemenkeu) reported a number of State-Owned Enterprises (SOEs) that have received State Capital Participation (PMN) amounting to IDR28.2 trillion in 1H24 through the document of the Realization Report of Semester I and the Prognosis of Semester II of the 2024 State Budget. MNCS Comment: The capital injections were received by three SOEs, including: 1) IDR18.6 trillion was distributed to PT Hutama Karya to support the Trans Sumatra Toll Road construction; 2) IDR6 trillion allocated for PT Wijaya Karya (WIKA) to fund the National Strategic Project, including the construction of Manyar Gresik smelter and Serang-Panimbang Toll Road; 3) IDR3.6 trillion for PT Bahana Pembinaan Usaha Indonesia to strengthen the completion of IFG Life policy (formerly PT Asuransi Jiwasraya).
Company News
1. BOLT IJ is aiming for sales growth of +10% YoY in FY24 (Kontan). MNCS Comment: Management is optimistic about achieving its target in 2H24 amidst a sales decline of -11.3% YoY in 1Q24. This optimism aligns with the company's efforts to improve export performance to Germany, which currently contributes 50% of total export sales. We noted that in 1Q24, export sales performance increased by +44% YoY with a contribution of 6.5% of total revenue. BOLT is currently trading at 2.62x PBV.
2. PGEO IJ has used IPO funds worth IDR 3.6 trillion (Emiten News). MNCS Comment: We note that the proceeds from this IPO used 41.2% of the total proceeds. Furthermore, these funds are used for capex and payment for the facilities agreement. In addition, the remaining IPO funds amounting to IDR 5.16 trillion or 58.8% of the total proceeds were deposited in a checking account. PGEO is currently trading at 17.68x/1.66x PER/PBV.
3. SMRA IJ recorded marketing sales IDR1.5 trillion in 5M24 (Kontan). MNCS Comment: We note that marketing sales reached 29.8% of the target in FY24E, amounting to IDR5 trillion. This was mainly driven by house assets which contributed 82.5% of total marketing sales, followed by apartments contributing 8.1%, land plot contributing 5%, shophouses contributing 3.5%, and offices contributing 0.9%. We are optimistic that this target is achievable, in line with a residential property sales growth of +31.2% YoY in 1Q24 and supported by VAT incentives with allowance of 100% in 1H24 and 50% in 2H24. SMRA is currently trading at 5.33x/0.92x PER/PBV.
IHSG Updates
The JCI weakened by -0.75% to 7,224.29 on Tuesday (16/07), followed by net foreign sell of IDR529.54 billion. The majority of sectors experienced declines and weighed on the index, led by the consumer non-cyclical sector (-0.78%) and followed by the infrastructure sector (-0.74%). Meanwhile, the sectors that experienced gains were led by the consumer cyclical sector (+1.62%) and followed by the technology sector (+1.15%). The index corrected amid a mixed close in Asian markets, as investors tended to take a wait-and-see ahead of the Bank Indonesia Board of Governors Meeting (RDG BI) decision in Jul-2024, concerning the outlook for interest rate and views on the Rupiah. The Rupiah closed lower at IDR16,180/USD. We estimate that the JCI will move in the price range of 7,196-7,525. Today's recommendations: AGRO, ANTM, BUKA, BRMS.
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