Global Market Highlights
The DJIA strengthened by +0.34% on Friday (17/05), followed by the S&P 500 (+0.12%). While the Nasdaq closed flat (-0.07%). Wall Street closed mixed with several momentums took place, where the rebound 10Y UST to 4.40% from 4.33% slew down the index rally. Meanwhile, the market’s focus remains on the upcoming speech from Fed Chair, Powell, hoping for a rate cut implementation as recent macroeconomic data reading showed a trajectory towards soft-landing. Today the market will be looking forward to several data releases such as: 1) Indonesia Current Account 1Q24; 2) China Foreign Direct Investment YoY Apr-2024; 3) US Fed Chair Powell Speech.
Domestic Update
Bank Indonesia reported the foreign capital flow based on transactions from May 13 to 16, 2024, non-residents in the domestic financial market recorded net purchases of IDR22.06 trillion. These transactions consisted of net buys of IDR5.30 trillion in the SBN market, net sales of IDR2.40 trillion in the stock market, and net inflow of IDR19.17 trillion in SRBI. MNCS Comment: YTD until May 16, 2024, non-resident transactions have recorded net outflow in the SBN market amounting to IDR42.27 trillion, net sales in the stock market amounting to IDR2.05 trillion, and net purchases of IDR53.18 trillion in SRBI. The outflow in the stock market is influenced by selling actions of big-cap companies following the release of earnings in 1Q24 and BI’s decision to increase rates previously.
Company News
1. SIDO IJ will distribute a final dividend of IDR18/share for FY23 (Kontan). MNCS Comment: After distributing an interim dividend in Nov-2023 amounting to IDR12.6 per share, the total DPS for FY23 distributed amounts to IDR30.6 per share or equivalent to IDR918 billion. This final dividend distribution will result in a potential yield of 2.5%. We note that the FY23 DPS/DPR are lower compared to the previous year, FY22, which was IDR36.5 per share and DPR at 96.57% (vs.96/57% in FY22), in line with the decline in net profit by -13.95% YoY. SIDO is currently trading at 13.73x/5.66x PER/PBV.
2. ENAK IJ reported a net profit increase of +405.8% YoY to IDR15.5 billion in 1Q24 (vs IDR3.1 billion in 1Q23) (Emiten News). MNCS Comment: We note that this net profit increase was supported by a higher revenue of +27.5% YoY to IDR397.5 billion (vs IDR311.7 billion in 1Q23). The lower growth in COGS of +20.5% YoY also contributed to the gross profit growth of +31.8% YoY. Additionally, margins expanded, with OPM/NPM rising to 6.3%/3.9% (vs 3.7%/1.0% in 1Q23). ENAK is currently trading at 36.25x/8.01x PER/PBV.
3. PTPP IJ has secured new contracts amounting to IDR6.35 trillion until Apr-2024 (Kontan). MNCS Comment: The achievement consisted of 57.5% from government, 24.2% state-owned companies, and 18.3% private enterprises, reflecting 19.8% of the total contract target this year (IDR32 trillion). From the top-line standpoint, the company aims for 10%-15% YoY growth in FY24E, which means the 1Q24’s revenue of IDR4.6 trillion marked 19%-21% of the target. PTPP is currently trading at 24.58x/0.15x PER/PBV.
IHSG Updates
The JCI climbed by +0.97% to 7,317.24 on Friday (17/05), followed by a net foreign buy reaching IDR866.6 billion. Most sectors experienced gains, driving the index higher, led by the basic materials sector (+1.66%) and followed by the financial sector (+1.34%). On the other hand, the sectors that experienced declines were led by the non-cyclical sector (-0.41%) and followed by the cyclical sector (-0.38%). The index's strength aligned with the majority of Asian markets, which closed higher. Investors were monitoring the release of China's industrial production data for April 2024, which increased by +6.7% YoY, exceeding the consensus expectation of +5.5% YoY. This has fueled investor optimism about the recovering Chinese market, anticipated to positively impact global GDP growth. The Rupiah closed lower at IDR15,955/USD. We estimate that the JCI will move in the price range of 7,289-7,377. Today's recommendations: DSNG, ERAA, KLBF, PGEO.
Corporate Actions
Cum dividend: ANTM (IDR128.07/share), PTBA (IDR397.7/share), JSMR (IDR37.9/share)
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