Global Market Highlights
The DJIA weakened by -0.86% on Thursday (30/05), followed by the S&P 500 (-0.60%) and the Nasdaq (-1.08%). Wall Street continued its losses, following the lower revision of the 2nd estimate for GDP growth rate at 1.3% QoQ in 1Q24 (vs 3.4% in 4Q24) due to slower-than-expected consumer spending at 2% QoQ (vs 3.3%/2.5% previous/consensus). Additionally, the climb of initial jobless claims to 219,000 on the week ending May 25th (vs 216,000 previously) also exerted pressure on the index. Today the market will be looking forward to several data releases such as: 1) US Core PCE Price Index Apr-2024; 2) Japan Core CPI May-2024; 3) China NBS Manufacturing PMI May-2024.
Domestic Update
The Ministry of Finance recorded the government debt until Apr-2024 increased to IDR8,333.43 trillion. MNCS Comment: The debt position grew by 0.92% MoM (IDR8,262,1 trillion in Mar-2024), reflecting a debt to GDP ratio at 38.64% (vs 38.79% in Mar-2024). This ratio is still below the safe limit of 60% according to the Constitution (UU) No.17 Year 2023 and 40% based on the Medium-Term Debt Management Strategy for 2024-2027. The raise was mainly driven by the State Securities Instruments (SBN), which contributed to 87.94% of the total debt, with a total issuance amounting to IDR7,333.11 until Apr-2024.
Company News
1. TCID IJ will distribute dividends for FY23 amounting to IDR37.8 billion (Emiten News). MNCS Comment: This dividend distribution will offer a potential yield ~3.74% with DPS equivalent to IDR94 per share. Dividend payout ratio at 99.17%, higher than the previous year at 97.99% due to a spike in its net profit of +106.39% YoY in FY23. TCID is currently trading at 0.52x PBV.
2. MERK IJ will distribute dividends for FY23 amounting to IDR143 billion, or equivalent to IDR320 per share (Emiten News). MNCS Comment: Amidst a drop in revenue of -14.51% YoY and net profit slightly increased by -0.89% YoY in FY23. MERK decided to distribute its dividend with a higher DPR at 80.23% (vs 79.72% in FY22). We estimate a potential yield at approximately ~7.92%. MERK is currently trading at 19.13x/2.21x PER/PBV.
3. BOLT IJ prepares a capex budget of IDR49 billion for FY24 (Kontan). MNCS Comment: This capex allocation for FY24E increased +112.18% compared to IDR23.08 billion at FY23. Management is also targeting revenue of IDR1.7 trillion in FY24 or equivalent to +16% YoY growth (vs. realization of IDR1.46 trillion in FY23). We see that this target is still realistic and attainable supported by total revenue in 1Q24 which has contributed 21.49% of the revenue target in FY24. BOLT is currently trading at 2.25x PBV.
IHSG Updates
The JCI weakened by -1.49% to 7,034.14 on Thursday (30/05), followed by a net foreign sell of IDR1.19 trillion. Almost all experienced declines and weighed on the index, led by the basic materials sector (-2.10%) and followed by the technology sector (-1.52%). On the other hand, the sector that showed gains was the health sector (+0.25%). The weakening of the index was in line with the correction in Asian markets. We believe investors are taking a wait-and-see regarding several crucial macroeconomic data points, such as industrial production for Japan and South Korea. China's NBS Manufacturing PMI is estimated to rise slightly to 50.5 points in May-2024 (vs 50.4 points in Apr-2024). The Rupiah closed lower at IDR16,260/USD. We estimate that the JCI will move in the price range of 7,001-7,070. Today's recommendations: ADMR, BBRI, DSNG, ITMG.
Corporate Actions
Cum dividend: CPIN (IDR30/share), ISAT (IDR268.4/share)
AGMS: MTEL
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