Global Market Highlights
DJIA strengthened by +0.50% on Friday (27/07), followed by S&P500 (+0.99%) and Nasdaq (+1.90%). Wall Street managed to rebound, where investors paid attention to the release of the core PCE price index data in Jun-2023, which slowed down to +0.2% MoM (vs +0.3% MoM in May-2023), giving hope for a controlled inflation rate in the future. Today, the market will be looking toward several data releases such as: 1) Germany Retail Sales YoY Jun-2023; 2) UK Mortgage Approvals Jun-2023; 3) Japan Housing Starts YoY Jun-2023.
Domestic Update
• Government Regulation No. 36/2023 concerning export earnings from the processing of natural resources has the potential to increase the earnings up to USD100 billion. MNCS Comment: We believe that this effort can support exchange rate stabilization, amidst the narrowing spread between BI7DRR and the FFR. Notably, if The Fed increases the FFR by +25 basis points as projected, the spread becomes zero, which is feared could trigger an outflow. Meanwhile, an increase in foreign exchange can support intervention efforts to create a stable exchange rate.
Company News
1. TLKM IJ reported a net profit in 1H23 of IDR12.8 trillion, a decline of -4.2% YoY (vs IDR13.3 trillion in 1H22) (Kontan). MNCS Comment: The net profit decreased despite a rise in revenue (+2.1% YoY), concurrent with an increase in operating, maintenance, and telecommunications service expenses (+7.4% YoY) and OPEX (+18.1% YoY). Currently, TLKM is traded at the level of 14.44x/2.98x PER/PBV.
2. EXCL IJ recorded a net profit increase of +5.8% YoY to IDR650.7 billion (vs IDR614.9 billion in 1H22) (Investor ID). MNCS Comment: The positive performance was supported by an increase in revenue +12.0% YoY to IDR15.8 trillion (vs IDR14.1 trillion in 1H22), driven by a rise in income from customer contracts (+10.6% YoY), as well as a reduction in sales expenses (-14.8% YoY). However, NPM decreased to 4.1% (vs 4.4% in 1H22). Currently, EXCL is traded at the level of 22.70x/1.15x PER/PBV.
3. BUMI IJ reported a decrease in net profit of -51.2% YoY, down to USD81.8 million (vs USD167.7 million in 1H22) (Kontan). MNCS Comment: This net profit decrease is in line with the decrease in revenue (-8.5% YoY) to USD886.3 million (vs USD 968.7 million in 1H22), and an increase in COGS by +3.0% YoY, which caused the GPM to contract to 12.3% (vs 22.1% in 1H22). Currently, BUMI is traded at the level of 13.86x/2.10x PER/PBV.
IHSG Updates
JCI strengthened slightly +0.05% to 6,900.23 on Friday (28/07), followed by a net foreign sell reaching IDR727.05 billion. A number of sectors experienced strengthening and boosting the index rate, led by the raw material sector (+0.99%) followed by the infrastructure sector (+0.75%). On the other hand, sectors that weakened were led by the technology sector (-1.33%) followed by the industrial sector (-0.44%). The index strengthened amidst a mixed-closure of Asian markets, where investors once again observed the release of earnings in 2Q23 and adopted a wait-and-see approach in anticipation of the release of the latest macroeconomic data. The Rupiah closed lower at IDR15,095/USD. We estimate that the JCI will move in the price range of 6,879-6,924. Today's recommendation: ACES, ESSA, HRUM, SLIS.
Corporate Actions
IPO: RMKO (IDR450/share)
RUPS: KRAS, AWAN
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