Global Market Highlights
DJIA gained +0.47% on Thursday (20/07), while the S&P500 (-0.68%) and Nasdaq (-2.05%). Wall Street closed mixed alongside the exposure from the release of negative earnings by several issuers and the release of existing home sales data in Jun-2023 which showed a further contraction of -3.3% MoM. Today, the market will be looking toward several data releases such as: 1) US Baker Hughes Total Rig Count 21-Jul-2023; 2) UK Public Sector Net Borrowing Jun-2023; 3) UK Retail Sales YoY Jun-2023.
Domestic Update
• Government Regulation No. 36/2023, regarding export proceeds related to the business, management, and processing of natural resources, will be implemented on August 1, 2023. MNCS Comment: This regulation will affect issuers with export sales, such as those involved with Crude Palm Oil (CPO) and coals. Conversely, issuers focused on domestic sales will not be impacted. Given the minimum requirement of a 30% deposit from export proceeds for at least three months, we anticipate the potential for companies to bolster their cash flow through financing. Notably, the Weighted Net Balance (WNB) pertaining to corporate financing increased to 17.8% in Jun-2023 (vs 12.5% in May-2023).
Company News
1. BSDE IJ recorded marketing sales of IDR4.79 trillion in 1H23 (Emiten News). MNCS Comment: The sales value increased +2.6% YoY (vs IDR4.67 trillion in 1H22). With a target of achieving marketing sales of IDR8.8 trillion, the realization up to 1H23 has reached 54.4%. We anticipate that residential property sales will continue to bolster marketing sales growth in the future. Currently, BSDE is traded at the level of 7.07x/0.71x PER/PBV.
2. BRMS IJ targets full capacity level for gold plant II in Aug-2023 (Kontan). MNCS Comment: Therefore, the company has the potential to maximize the utilization of 4,500 tons of ore/day, presenting a significant opportunity for future growth. This growth is further supported by the increasing production volumes and the persistently high price of gold. Currently, BRMS is traded at the level of 1.47x PBV.
3. SMDR IJ allocated IDR4.94 trillion of capex for the expansion of 11 new ships (Kontan). MNCS Comment: This expansion will increase the lineup of ships owned, thereby potentially improving the company's performance going forward. Currently, SMDR is trading at the level of 3.07x/0.85x PER/PBV.
IHSG Updates
JCI strengthened +0.5% to 6,864.19 on Thursday (20/07), followed by net foreign buy reaching IDR593.1 billion. The majority of sectors experienced strengthening and drove the index rate, led by the energy sector (+1.56%) followed by the property sector (+1.52%). On the other hand, sectors that experienced a weakening were led by the technology sector (-0.97%) followed by the health sector (-0.52%). JCI managed to outperform amidst depressed Asian bourses, where investors were optimistic ahead of the release of foreign direct investment data in 2Q23. The Rupiah closed at IDR14,988/USD. We estimate that the JCI will move in the price range of 6,827-6,884. Today's recommendation: EXCL, GGRM, INCO, UNIQ.
Corporate Actions
RUPS: AMIN
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