Global Market Highlights
DJIA gained +0.31% on Wednesday (19/07), followed by the S&P500 (+0.24%) and the Nasdaq (+0.03%). Wall Street managed to close in the green zone, supported by the earnings release season in 2Q23 and the decline in UST yields, amid the contracted housing market data in Jun-2023. Today, the market will be looking toward several data releases such as: 1) US Initial Jobless Claims 15-Jul-2023; 2) US CB Leading Index MoM Jun-2023; 3) US Philadelphia Fed Manufacturing Index Jul-2023.
Domestic Update
• The growth rate of bank credit is projected to decelerate in June 2023, evidenced by a slight decrease in the Weighted Net Balance (WNB) to 81.7% in Jun-2023 (vs 82.6% in the previous month). MNCS Comment: We see that the slowdown aligns with moderated demand following the early festive season and heightened business competition in 2Q23. Bank Indonesia's measures to maintain stimulus through FY23E (minimum payment of 5% and a maximum delay of 1% of total bills) are expected to provide stability. Meanwhile, the Consumer Expectations Index in Jun-2023 remained stable at 137.5 (vs 137.8 in May-2023).
Company News
1. DMAS IJ recorded marketing sales realization of IDR1 trillion in 1H23 (Emiten News). MNCS Comment: The sales were higher by +0.05% YoY (vs IDR995 billion in 1H22). Meanwhile, with a marketing sales target in FY23E of IDR1.8 trillion, the realization of marketing sales reached 59.7% of the FY23E target. We believe that DMAS can achieve this target alongside the prospective sales of industrial land and data center land. Currently, DMAS is traded at the level of 13.02x/1.38x PER/PBV.
2. BUMI IJ is optimistic on achieving its production target of 75 - 80 million tons of coal in FY23E (Market Bisnis). MNCS Comment: We view that this target will be driven by a conducive climate in line with reduced rainfall ahead of El-Nino, thereby encouraging higher production operations. In 1Q23, BUMI recorded total production of 16 million tonnes, or realization reaching 20.0% - 21.3% of the FY23E target. Currently, BUMI is traded at the level of 13.65x/2.07x PER/PBV.
3. INCO IJ reported a production of 33,691 metric tons of nickel matte up to 1H23 (Kontan). MNCS Comment: Total production increased +27.6% YoY (vs 26,394 metric tons in 1H22), which was supported by total production in 2Q23 which reached 16,922 metric tons (+34.7% YoY), following the completion of construction on Furnace 4. We are confident that INCO can achieve its production target in FY23E of 70,000 metric tons of nickel matte, of which realization in 1H23 had reached 48.1%. Currently, INCO is traded at the level of 10.82x/1.73x PER/PBV.
IHSG Updates
JCI closed commemorating the Islamic New Year 1445H on Wednesday (19/07). Meanwhile, Asian markets closed mixed, where investors waited and saw ahead of the release of China's loan interest rate policy in Jul-2023. Domestically, the market will be waiting for the release of foreign direct investment data in 2Q23. The Rupiah closed at IDR15,005/USD. We estimate that the JCI will move in the price range of 6,818-6,864. Today's recommendation: ARTO, BEST, DOID, TINS.
Corporate Actions
RUPS: MDIA, TRIS, YELO
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