Global Market Highlights
DJIA closed flat +0.01% on Friday (21/07), followed by S&P500 (+0.03%) while Nasdaq (-0.22%). Wall Street's movements were mixed, influenced by the season of earnings releases and the market's wait and see ahead of the Fed's FOMC on July 25-26, 2023, where it is expected that the Fed will raise its benchmark interest rate (FFR) +25 bps with a probability of 99.2%. Today, the market will be looking toward several data releases such as: 1) US S&P Global Composite PMI Flash Jul-2023; 2) US Chicago Fed National Activity Index Jun-2023; 3) Germany HCOB Manufacturing PMI Flash Jul-2023.
Domestic Update
• Bank Indonesia noted that during July 17-20, 2023, non-residents on the domestic financial market bought IDR4.67 trillion net, consisting of IDR2.56 trillion net buying on the state bond market and IDR2.11 trillion net buying on the stock market. MNCS Comment: The return of inflow to the equity market is in line with investors anticipating positive results in 2Q23/1H23, especially for listed banking companies. Furthermore, investors will tend to wait and see ahead of the Fed's FOMC readings on July 25-26, 2023, so that there is potential for further outflows.
Company News
1. HMSP IJ recorded cigarette volume sales in 1H23 reaching 40.5 billion sticks, or decreased -4.1% YoY (Market Bisnis). MNCS Comment: The decline was in line with ASP adjustments aggressively to improve profitability margins. However, we view that HMSP consumers tend to be resilient where the market share in 1H23 reached 28.7% (vs 28.3% in 1H22). Currently, HMSP is traded at the level of 13.13x/3.74x PER/PBV.
2. MTDL IJ recorded flat net profit growth in 1H23 +0.3% YoY to IDR272.2 billion (vs IDR271.3 billion in 1H22) (Emiten News). MNCS Comment: Flat net profit growth was in line with efficiency in cost of revenue and reduced tax rate amid revenue that fell -4.0% YoY. Meanwhile, GPM and NPM in 1H23 tended to increase to 8.5%/2.9% respectively (vs 8.3%/2.8% in 1H22). Currently, MTDL is traded at the level of 12.39x/2.02x PER/PBV.
3. ASLC IJ plans for expansion by opening 4 new Caroline branches within the next 2 months (Market Bisnis). MNCS Comment: This effort has the potential to increase the number of Caroline branches to ~14 units. This is a positive move as it could boost the company's performance going forward and also strengthen its position in the market. Currently, ASLC is traded at the level of 2.20x PBV.
IHSG Updates
JCI strengthened +0.24% to 6,880.80 on Friday (21/07), followed by net foreign buy reaching IDR2.87 billion. A number of sectors experienced strengthening and boosted the index rate, led by the transportation sector (+1.49%) followed by the health sector (+1.29%). On the other hand, sectors that experienced a weakening were led by the technology sector (-1.45%) followed by the industrial sector (-0.19%). The index strengthened amid mixed Asian market movements, where investors responded positively to Indonesia's 2Q23 foreign direct investment growth rate of +14.2% YoY. The Rupiah closed at IDR15,025/USD. We estimate that the JCI will move in the price range of 6,857-6,899. Today's recommendation: CPIN, ISAT, LSIP, RALS.
Corporate Actions
IPO: INET (IDR101/share)
RUPS: ELTY, JATI
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