Global Market Highlights
DJIA strengthened +0.03% on Monday (03/07), followed by the S&P500 (+0.12%) and the Nasdaq (+0.21%). Wall Street managed to continue strengthening amid the release of ISM Manufacturing PMI data in Jun-2023 which fell to a level of 46 (vs 46.9 previously), where expectation for a slowdown in inflation was still a positive catalyst. Today, the market will be looking toward several data releases such as: 1) Germany Balance of Trade May-2023; 2) UK 30-Year Green Gilt Auction; 3) Japan 10-Year JGB Auction.
Domestic Update
• Indonesia's Manufacturing PMI in Jun-2023 made a rebound to a level of 52.5 (vs 50.3 in May-2023). MNCS Comment: This achievement marks Indonesia's manufacturing expansion for 22 consecutive months. In addition, the increase in new orders represents a solid outlook for the economy, as well as a positive catalyst in the form of reduced input costs which has driven factory selling prices down as well.
Company News
1. SLIS IJ will carry out a Right Issue (RI) by issuing a maximum of 2 billion new shares. The exercise price is IDR168/share with a target of raising IDR336 billion (Market Bisnis). MNCS Comment: We view positively the company's efforts to accelerate the company's performance going forward, in which all RI proceeds will be used for working capital needs for its entity PT Juara Bike. SLIS is also benefited from the bright prospects in the EV vehicle industry. Currently, SLIS is traded at the level of 11.20x/1.27x PER/PBV.
2. CSAP IJ plans to conduct a Right Issue (RI) by issuing 1.22 billion new shares (21.55% of the issued and fully paid capital). The exercise price is IDR700/share with a target of raising IDR857.4 billion (Market Bisnis). MNCS Comment: Approximately IDR350 billion of proceeds will be used for the opening of 6 new Mitra10 outlets, bringing the potential to bring the total Mitra10 outlets to 51 (vs 45 outlets in FY22). We see this has the potential to improve the company's performance going forward. Currently, CSAP is traded at the level of 12.25x/1.33x PER/PBV.
3. PTRO IJ acquired Kemilau Mulia Sakti (KMS) as a coal mining company (UP) through its entity, with a transaction value equivalent to IDR1.35 trillion (Emiten News). MNCS Comment: We see that this effort is in line with the company's focus on developing business diversification, which has the potential to improve the company's performance going forward. Currently, PTRO is traded at the level of 20.49x/0.80x PER/PBV.
IHSG Updates
JCI strengthened +0.52% to 6,696.72 on Monday (03/07), followed by net foreign buy reaching IDR253.19 billion. The majority of sectors experienced strengthening and drove the index rate, led by the energy sector (+1.61%) followed by the non-cyclical sector (+0.67%). On the other hand, the sector that experienced weakness was the technology sector (-0.73%) followed by the health sector (-0.54%). The strengthening of the index was in line with Asian stock exchanges, where investors responded positively to the release of inflation data in June-2023 of +3.52% YoY, or below the consensus estimate (+3.64% YoY) and the results of May-2023 (+4. 00% YoY). The Rupiah closed lower at IDR15,025/USD. We estimate that the JCI will move in the price range of 6,650-6,717. Today's recommendation: ARTO, MDKA, MTEL, UNVR.
Corporate Actions
Cum Dividend: ACES (IDR31.06/share), CAMP (IDR20/share), KKGI (IDR25/share)
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