Global Market Highlights
The DJIA declined by -0.49% on Monday (20/05). Meanwhile the S&P 500 closed flat (+0.09%) and the Nasdaq strengthened (+0.65%). Wall Street closed mixed as investors gauged the rate cut decision by the Fed and are waiting for the release of FOMC minutes tomorrow, after its officials’ speeches earlier did not alter any expectations. At the same time, the market is also eyeing on the upcoming earnings season. Today the market will be looking forward to several data releases such as: 1) China Foreign Direct Investment YoY Apr-2024; 2) Canada Inflation Rate Apr-2024; 3) Euro Area Balance of Trade Mar-2024.
Domestic Update
Bank Indonesia reported a deficit of USD2.2 billion in the current account in 1Q24, representing 0.6% of the total GDP. MNCS Comment: This deficit pointed out four consecutive months of shortfall, but was lower compared to the deficit of USD1.1 billion (0.3% of GDP) in 4Q23. The non-oil and gas trade balance remains in surplus, albeit smaller than the previous quarter, owing to a decrease in non-oil and gas exports amid a global economic slowdown. Conversely, the improved service balance sheet benefitted from higher foreign exchange earnings from tourism services. Meanwhile, the primary income balance deficit grew slightly, impacted by persistently high global interest rates.
Company News
1. DSSA IJ will conduct a stock split with a ratio of 1:10 (Market Bisnis). MNCS Comment: This stock split will increase the number of outstanding shares to 7.7 billion shares with a nominal value of IDR25/share. This stock split will potentially increase the liquidity of DSSA share transactions. DSSA’s trading with new nominal value will start on July 18, 2024. DSSA is currently trading at the level of 15.31x/4.72x PER/PBV.
2. GEMS IJ will distribute final dividends amounting to USD85 million for the FY23 (Kontan). MNCS Comments: GEMS will distribute final dividends amounting to USD85 million or the equivalent to ~IDR230.8 per share (USD/Rp15,978 as of 20 May 2024). We estimate this dividend distribution will provide a potential yield of 3.72%. The dividend payout ratio FY23 at 96.45%. GEMS is currently trading at 4.56x/3.62x PER/PBV.
3. ACES IJ posted a SSSG growth of +6,8% YoY in Apr-24 (Kontan). MNCS Comment: This performance marked a decline from +19,9% YoY in Mar-2024 and +15% YoY in Apr-2023, following the end of Ramadhan seasonality in the previous month. Regionally, the SSSG recorded positive advancement, Jakarta (+4.1%), Java excl. Jakarta (+6.9%), and ex-Java (+8.2%). As of 4M24, the SSSG increased by +11.4% YoY. The company aims for a total SSSG of 7% and 15 new store rollouts in FY24E. While the revenue is targeted to grow at +10% YoY, which means the net sales in 1Q24 marked 23.8% of the goal. ACES is currently trading at 2.28x PBV.
IHSG Updates
The JCI weakened by -0.69% to 7,266.69 on Monday (20/05), amidst a net foreign buy reaching IDR226.1 billion. Most sectors experienced declines, weighing down the index, led by the financial sector (-1.66%) and followed by the transportation and logistics sector (-1.64%). On the other hand, the sectors that strengthened were led by the energy sector (+0.78%) and followed by the healthcare sector (+0.54%). The index weakened despite the strengthening of Asian markets, as investors monitored the release of the current account data for 1Q24, which recorded a deficit of USD2.2 billion (vs USD1.1 billion in 4Q23). Additionally, the JCI's decline was likely due to profit-taking ahead of the long holiday after appreciating by +2.9% last week. The Rupiah closed lower at IDR15,975/USD. We estimate that the JCI will move in the price range of 7,225-7,304. Today's recommendations: ADRO, CPIN, MAPI, TKIM.
Corporate Actions
AGMS: CPIN, ISAT
Cum dividend: HEAL (IDR8.5/share)
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