Global Market Highlights
The DJIA climbed by +0.23% on Wednesday (01/05), while the S&P 500 (-0.34%) and the Nasdaq (-0.33%) dropped. Wall Street closed mixed as investors are eyeing for several key macroeconomics data to be released tomorrow. While The Fed’s decision to maintain the interest rate at 5.25%-5.50% for the sixth consecutive time, seemed to dim market’s expectations for a potential rate cut in a close time. Today the market will be looking forward to several data releases such as: 1) Japan Consumer Confidence Apr-2024; 2) Indonesia Inflation Rate YoY Apr-2024; 3) US Balance of Trade Apr-2024.
Domestic Update
Bank Indonesia reported the demand in the corporate financing Weighted Net Balance (SBT) stood at 25.3% in Mar-2024 (vs 11.1% in Feb-2024) and the survey for distribution of new credit by banks also indicated a rise with SBT of 80.9% in Mar-2024 (vs 54.1% in Feb-2024). MNCS Comment: We note that the growing need for corporate financing was driven by the demand in the Business Field (LU) of Trade, Processing Industry, and Construction. Meanwhile, the growth in new banks credit distribution was primarily affected by the demand for financing from customers, with the share of household financing sourced from commercial banks was recorded at 41.2% (vs 39.8% in Feb-2024). We expect that the potential rate cut by the Fed later this year should also result in further growth.
Company News
1. BBNI IJ reported a net profit of IDR5.3 trillion in 1Q24, an increase of +2.0% YoY (vs IDR5.2 trillion in 1Q23) (Kontan). MNCS Comment: The increase in BBNI's net profit was supported by a decrease in provision expenses by -18.9% YoY, amidst a decrease in net interest income by -9.8% YoY. The decrease in net interest income is in line with the NIM, which declined to 4.01%, lower than the achievement of 4Q23 at 4.36% and 1Q23 at 4.68%. Meanwhile, total loans increased by +9.6% YoY to IDR695.2 trillion, followed by an increase in LDR to 89.0% (vs 85.4% in 1Q23). BBNI is currently trading at 1.35x PBV.
2. PGAS IJ posted a jump in net profit of +40.8% YoY in 1Q24 to USD121.1 million (vs 1Q23: USD86.0 million) (Emiten News). MNCS Comment: The increase in net profit was driven by a revenue increase of +1.7% YoY to USD949.33 million in 1Q24 (vs USD933.74 million in 1Q23), a decrease in operating expenses by -2.56% YoY, an increase in financial income by +44.31% YoY, and a decrease in financial expenses by -27.02% YoY. Furthermore, revenue from related parties decreased by -12.52% YoY to USD318.8 million in 1Q24 (vs USD364.4 million in 1Q23), while revenue from third parties increased to USD630.52 million (+10.75% YoY). In terms of margin, NPM/GPM increased to 12.8%/22.3% (vs 9.2%/18.9% in 1Q23). Currently PGAS is trading at 4.63x/0.80x PER/PBV.
3. SGRO IJ booked a +31.63% YoY growth of net profit in 1Q24 (Kontan). MNCS Comment: Despite a -19.08% YoY drop of net sales in this period, the company’s bottom-line was aided with the effective cost management with the COGS declined by -23.49% YoY. The plunge in its revenue was attributed to the palm products segment which fell by -21.40% YoY, in line with the residual El-Nino impacts from the previous year. However, management maintains a positive view on achieving production growth of ~5% YoY this year, supported by the capex allocation for infrastructure and water management system to face the La-Nina that is predicted to take place in 1H24. SGRO is currently trading at 0.65x PBV.
IHSG Updates
The JCI closed on Wednesday (01/05) in observance of Labor Day. Meanwhile, JCI experienced a slight correction of -0.7% MoM in Apr-2024, with non-residents recording a net sell reaching IDR18.3 trillion. We see this outflow in line with the shifting expectations of a rate cut from 2Q24 to 3Q24. The FOMC maintained the FFR at 5.5% on 1-May. On the other hand, investors will wait and see ahead of the release of domestic inflation data in April 2024, which is expected to remain flat at 3.06% YoY according to consensus. Additionally, investors will also monitor the policy at the Bank of Japan meeting regarding the benchmark interest rate level and maintaining bond purchases. The Rupiah continued to close lower at IDR16,260/USD. We estimate that the JCI will move in the price range of 7,195-7,250. Today's recommendations: ASII, HRTA, INKP, MAPI.
Corporate Actions
Cum Dividend: AALI (IDR165/share), ASGR (IDR34/share), ASRM (IDR65/share).
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