Global Market Highlights
DJIA rallied +0.56% on Monday (12/06), followed by the S&P500 (+0.93%) and the Nasdaq (+1.53%). Wall Street managed to continue strengthening, as a positive catalyst from inflation expectations in May-2023 which fell to a level of 4.1% (vs 4.4% in Apr-2023), or the lowest level since Mar-2021. Today, the market will be looking toward several data releases such as: 1) US Inflation Rate YoY May; 2) US Core Inflation Rate YoY May; 3) UK Unemployment Rate Apr.
Domestic Update
• The May-2023 Consumer Confidence Index (IKK) increased 2.2 points to a level of 128.3 (vs 126.1 in Apr-2023) accompanied by the Economic Conditions Index (IKE) and Consumer Expectations Index (IEK) which each reached 118.9 and 137.8 (vs 116.6 and 135.5 in Apr-2023). MNCS Comment: This was supported by increasing expectations of business activities and availability of jobs, reflected in the increase in the portion of consumption to income in most categories, including purchases of durable goods.
Company News
1. TOBA IJ will distribute cash dividends for the FY22 fiscal year of USD 6.9 million (Investor ID). MNCS Comment: Assuming an exchange rate of IDR14,900/USD, we estimate TOBA's DPS to be worth IDR 12.7 per share, or offer a yield of 3.1%. Currently, TOBA is traded at the level of 6.34x/0.63x PER/PBV.
2. HRTA IJ plans to export gold to East Asian countries and Saudi Arabia (Market Bisnis). MNCS Comment: We view positively the company's efforts to increase export penetration to other countries, having previously established partnerships with 3 companies in India, where this can increase the company's profitability going forward. Currently, HRTA is traded at the level of 5.90x/0.92x PER/PBV.
3. DSNG IJ is preparing a capex allocation in FY23E worth IDR800 billion, of which part will be used as capital for the construction of a new palm oil mill (Kontan). MNCS Comment: Factory construction will start in 3Q23 and is targeted to operate in FY25F, where this can increase the estimated FFB processing capacity to 735 tonnes/hour. In FY23E, DSNG targets FFB production growth +28% YoY and CPO sales +44% YoY. Currently, DSNG is traded at the level of 7.00x/0.73x PER/PBV.
IHSG Updates
JCI strengthened +0.42% to 6,722.37 on Monday (12/06), followed by a net foreign sell of IDR660.26 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the transportation sector (+2.87%) followed by the health sector (+1.43%). On the other hand, the sector that led to the decline was the property sector (-0.61%) followed by the cyclical sector (-0.42%). The index strengthened along with the movement of Asian stock exchanges, where the market was watching the pace of the Japanese producer price index (PPI) in May-2023 which was soft +5.1% YoY (vs consensus: +5.5% YoY), as well as the domestic consumer confidence index which is at an optimistic level of 128.3. The Rupiah closed lower at IDR14,865/USD. We estimate that the JCI will move in the price range of 6,650-6,747 pending the release of Retail Sales Apr-2023 data. Today's recommendation: AISA, ANJT, HMSP, INDY.
Corporate Actions
Cum Dividend: PGEO (IDR10.87/share), SGER (IDR37.07/share), BUAH (IDR14/share)
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