Global Market Highlights
Wall Street was closed on Wednesday (19/06) in observance of Juneteenth. Meanwhile, most European markets closed lower amid the release of UK inflation data for May-2024, which hit the BoE target of 2.0% YoY. Investors are likely to wait-and-see ahead of the release of US labor market and housing data. Initial jobless claims for the week ending June 15 are estimated to decrease to 235k from 242k in the previous period. Meanwhile, preliminary building permits for May-2024 are estimated to rise to 1.45 million from 1.44 million in Apr-2024. Today the market will be looking forward to several data releases such as: 1) China Loan Prime Rate 1Y & 5Y Jun-2024; 2) GB BoE Interest Rate Decision Jun-2024; 3) US Housing Starts Mei-2024.
Domestic Update
BPS reported that Indonesia's trade balance for May-2024 recorded a surplus of USD 2.93 billion, slightly lower than the surplus of USD 2.72 billion in Apr-2024. MNCS Comment: The trade balance realization in May-2024 was above the consensus estimate of USD 2.74 billion. The trade surplus in May-2024 was supported by the non-oil and gas sector with a surplus of USD 4.26 billion, despite being offset by a deficit in the oil and gas sector amounting to USD 1.33 billion. We believe that maintaining a trade surplus can strengthen foreign exchange reserves, providing Bank Indonesia with more room to implement its monetary policies.
Company News
1. BALI IJ will distribute dividends amounting to IDR 78.7 billion or equivalent of IDR20/share (CNBC). MNCS Comment: This dividend distribution is lower than the previous year (vs. IDR 32.2/share in FY23), in line with a decrease in net profit of -29.0% YoY. We estimate a potential yield of ~2.0%. Dividend payout ratio is also lower than previous year, at 52.3% (vs. 60% in FY23). Additionally, the company targets revenue for FY24 of IDR 1.1 trillion or an increase of ~9.2% YoY. BALI is currently trading at 25.13x/1.53x PER/PBV.
2. CTRA IJ absorbed IDR700 billion capex in 1Q24 (Kontan). MNCS Comment: This capex allocation reflects 35% of the total capex budget of IDR2 trillion for total 9 residential projects and expansion to the health segment in FY24E. Following the new launches, the management aims for IDR3.5-4.0 trillion marketing sales. Additionally, CTRA will start operating Ciputra Hospital Surabaya in Aug-2024, with a maximum capacity of 200 beds. In 1Q24, the company booked IDR2.3 trillion revenue (+8.7% YoY) and IDR483.4 billion (+17.1% YoY) of net income, mainly supported by the implementation of the VAT incentive scheme from the government. CTRA is currently trading at 0.87x PBV.
3. ERAA IJ aims to open 200 new stores in FY24E (Kontan). MNCS Comment: The expansive outlet rollouts will involve four business segments, Erajaya Digital, Erajaya Active Lifestyle, Erajaya Food & Nourishment, and Erajaya Beauty & Wellness. However, this target is less aggressive compared to the goal of 600 new outlets in FY23. In 1Q24, ERAA has absorbed IDR173 billion capex for the new stores development. From the financial performance, the company booked IDR16.7 trillion revenue (+12.6% YoY) and IDR255.3 billion net income (+16.0% YoY). ERAA is currently trading at 23.00x/0.70x PER/PBV.
IHSG Updates
The JCI declined by -0.12% to 6,726.92 on Wednesday (19/06), accompanied by a net foreign sell of IDR709.78 billion. Most sectors contracted and pressured the index, led by the consumer cyclicals sector (-1.94%) and followed by the transportation & logistic sector (-1.60%). Meanwhile, the infrastructures sector led the gain (+0.84%) and was followed by the energy sector (+0.80%). The index weakened amidst the surplus of USD2.93 billion registered in the balance of trade for May-2024 (vs consensus USD2.74 billion), as investors seem to wait and see for BI’s interest rate decision. The Asian market closed mixed as investors digest the decision of BoJ to maintain the interest rate at 0%-0.1%. The Rupiah closed higher at IDR16,365/USD. We estimate that the JCI will move in the price range of 6,685-6,764. Today's recommendations: BUKA, HRTA, MDKA, MYOR.
Corporate Actions
Cum Dividend: IPCC (IDR62.39/share)
Right Issue: TPMA (1:3)
AGMS: UNVR
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