Global Market Highlights
The DJIA grew by +0.59% on Wednesday (17/07). On the other hand, the S&P 500 slumped (-1.39%) and was followed by the Nasdaq (-2.77%). Wall Street closed mixed with the optimism of rate cut implementation this year remains as an upside stimulus. Meanwhile, the losses of big-tech companies hampered the index movement, following the sentiment of technology imports restriction to China. Today the market will be looking forward to several data releases such as: 1) Japan Balance of Trade Jun-2024 2) GB Unemployment Rate May-2024; 3) US Initial Jobless Claims Jul/13.
Domestic Update
Bank Indonesia decided to maintain the BI rate at 6.25%, the deposit facility interest rate at 5.50%, and the interest rate of lending facility at 7.00% in the Meeting of the Board of Governors (RDG). MNCS Comment: This decision was in line with the market expectation. Following this, BI maintained the inflation projection at 2.5%±1% in 2024 and 2025 and the economy is expected to grow at 4.7%-5.5% YoY in 2024. BI focuses on strengthening the Rupiah exchange that has weakened by -4.84% YTD by keeping the yields attractive, coupled by low inflation rate and prospective economic growth to attract foreign capital inflow amidst the fragility of geopolitical tension and global economy.
Company News
1. EXCL IJ expands its Fixed Mobile Convergence (FMC) network in Sulawesi (Emiten News). MNCS Comment: We view EXCL’s strategic expansion positively, leveraging existing infrastructure to enhance market penetration reaching ~30% and meet growing consumer needs from increased demand for home internet services across Sulawesi, supported by robust economic growth and rising literacy rates. As of 1Q24, EXCL has successfully reached 79% of convergence penetration, capturing 252k total FBB subscribers. EXCL is currently trading at 13.64x/1.09x PER/PBV.
2. ERAL IJ has used IPO funds worth IDR321,7 billion (Emiten News). MNCS Comment: We note that the proceeds from this IPO used 82.8% of the total proceeds. Furthermore, 59.5% of the funds are used for capex and 40.5% for the funding of ERAL’s subsidiaries. In addition, the remaining IPO funds amounting to IDR 66.6 billion or 17.2% of the total proceeds were deposited in a checking account. ERAL is currently trading at 7.28x/0.79x PER/PBV.
3. DMAS IJ recorded marketing sales IDR1.1 trillion in 1H24 (Market Bisnis). MNCS Comment: We note that marketing sales reached 60.8% of the target in FY24E, amounting to IDR1.8 trillion. This was mainly driven by the sales of industrial land, in line with growth in the Commercial Property Demand Index of +3.4% YoY in 1Q24. Management is optimistic that this target is attainable. Additionally, the data center industry is still the main contributor to the company's industrial land sales. DMAS is currently trading at 5.17x/1.21x PER/PBV.
IHSG Updates
The JCI closed flat at -0.00% to 7,224.22 on Wednesday (17/07), followed by a net foreign sell of IDR 75.95 billion. The majority of sectors experienced declines, led by the healthcare sector (-0.42%) and followed by the basic materials sector (-0.32%). Meanwhile, the sectors that experienced gains were led by the consumer non-cyclical sector (+0.76%) and followed by the transportation and logistics sector (+0.57%). The index closed flat amidst the majority of Asian markets strengthening. Investors observed the results of the BI Board of Governors Meeting (RDG BI) in Jul-2024, which maintained the interest rate at 6.25%. Meanwhile, loan growth in Jun-2024 was recorded to have grown expansively by +12.4% YoY (vs +12.2% YoY in May 2024), reflecting liquidity support for the real sector to drive future economic growth. The Rupiah closed higher at IDR16,100/USD. We estimate that the JCI will move in the price range of 7,196-7,275. Today's recommendations: ARTO, BBNI, ICBP, SMGR.
Corporate Actions
EGMS: IFSH
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