Global Market Highlights
The DJIA declined by -0.14% on Tuesday (23/07), followed by the S&P 500 (-0.16%) and the Nasdaq (-0.06%). Wall Street corrected slightly following the rise in M2 money supply to USD21.03 trillion in Jun-2024 (vs USD20.96 trillion in May-2024), marking the highest figure in 16 months. This growth indicated the resiliency of consumer purchasing power, leading to a concern of lower probability in rate cut. Additionally, investors seemed to wait and see for the earnings releases of big-capped companies. Today the market will be looking forward to several data releases such as: 1) Japan Jibun Bank Services PMI Flash Jul-2024; 2) US New Home Sales Jun-2024; 3) US S&P Global Services PMI Flash Jul-2024.
Domestic Update
The results of the Bank Indonesia Banking Survey indicates the growth of new credit distribution in 2Q24, reflected in the rise of the New Credit Distribution Net Balance (SBT) of 89.1% (vs 60.8% in 1Q24). MNCS Comment: This growth was driven by almost all types of credits, expect for consumer loans. The survey expected the new credit distribution to continue growing with SBT forecast of 93.6% in 3Q24, supported by all types of credits, following the recovery of consumer spending power. In 3Q24, the credit growth for FY24E is projected to grow by 11.8% YoY, higher than the estimation in 2Q24 at 9.8% YoY and the realization in FY23 at 10.4% YoY.
Company News
1. ARNA IJ experienced a decline in net profit of -16.6% YoY in 1H24 (Kontan). MNCS Comment: This decrease in net profit was in line with the flattish revenue (-0.32% YoY), while COGS increased by +6.4% YoY, resulting in the decline in gross profit (-11.1% YoY). As a result, GPM fell to 34.2% in 1H24 (vs. 38.4% in 1H23). ARNA is currently trading at 12.92x/3.17x PER/PBV.
2. RMKO IJ will build Coal Crushing Plant (CCP) 2 with a capacity of 650 tph and other supporting mining facilities amounting to IDR25 billion (CNBC). MNCS Comment: We note that the total CCP projects that have been funded by the company's parent group are worth IDR61 billion, where the company's parent group has funded the CCP 1 project worth IDR36 billion in the previous period. This facility construction aims to increase coal production by developing adequate infrastructure. Management targets the construction of these two CCPs will be finished in 2H24. RMKO is currently trading at 1.27x PBV.
3. FASW IJ recorded net sales of IDR3.9 trillion or decreased by -5% YoY in 1H24 (Kontan). MNCS Comment: This decline in sales was driven by a drop in export sales to non-related parties by -30% YoY to IDR872 billion in 1H24 (vs. IDR 1.3 trillion in 1H23). In addition, the increase in cost of sale (+0.6% YoY) and a foreign exchange loss of IDR99.5 million in 1H24 (vs. a foreign exchange gain of IDR84.8 billion in 1H23) also resulted to the company's net loss reaching IDR472.9 billion in 1H24. FASW is currently trading at 3.5x PBV.
IHSG Updates
The JCI declined -0.11% to 7.313,86 on Tuesday (23/07), followed by net foreign sell of IDR86.95 billion. The majority of sectors experienced declines, weighing down the index, led by the energy sector (-1.00%) and followed by the industrial sector (-0.81%). On the flip side, the sectors that strengthened were led by the technology sector (+4.55%) and followed by the healthcare sector (+0.66%). The index moved into the red zone along with most other Asian markets. Investors tended to wait and see ahead of the release of 2Q24 earnings reports. The Rupiah closed higher at IDR16,210/USD. We estimate that the JCI will move in the price range of 7,288-7,330. Today's recommendations: ANTM, BBRI, BRPT, TOWR.
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