Global Market Highlights
The DJIA strengthened by +0.22% on Friday (08/09), followed by the S&P500 (+0.14%) and the Nasdaq (+0.09%). Wall Street successfully rebounded due to increasing investor expectations that The Fed will maintain the benchmark interest rate during the FOMC meeting in Sep-2023. Today, the market will be looking toward several data releases such as: 1) US Consumer Inflation Expectation Aug-2023; 2) US 6-Month Bill Auction; 3) US 3-Year Note Auction.
Domestic Update
• Bank Indonesia (BI) reported that the Consumer Confidence Index for Aug-2023 increased to a level of 125.2 (vs Jul-2023 realization of 123.5). MNCS Comment: The CCI successfully remains at its optimistic level. This is supported by the Current Economic Index which rose to 115.5 (vs 113.8 in Jul-2023) and the Consumer Expectation Index which increased to 135.0 (vs 133.2 in Jul-2023). The rising optimism is expected to boost future purchasing power.
Company News
1. PTRO IJ announced a signed MoU with PT Hyundai Construction Equipment Asia, aiming to provide innovative solutions for the mining, construction, and heavy equipment sectors in Indonesia (Emiten News). MNCS Comment: We view this strategic collaboration positively as it could enhance PTRO's backlog, in line with diversification efforts. Additionally, an increase in clients is anticipated to bolster the company's performance going forward. Currently, PTRO is traded at a level of 10.67x/0.99x PER/PBV.
2. BMHS IJ reported that capex realization up to 7M23 has only reached 30%-40% of the total budget for FY23E, amounting to IDR200 billion (Investor ID). MNCS Comment: We expect significant capex realization in 2H23 to strengthen existing business units and achieve the company's initiatives for FY23E. We view the shift towards digitalization positively, where the company is launching a booking platform called OneBunda. Currently, BMHS is traded at a level of 1.96x PBV.
3. IPCC IJ reported export volume growth of CBU and import CBU up to 7M23 at +18.9% YoY and +49.4% YoY respectively (Emiten News). MNCS Comment: We observe the company benefiting from an increasing line-up of EVs and Hybrid vehicles going forward. With the government's strategy to promote EV vehicle regulations, this has the potential to continue the company's volume growth trend. Currently, IPCC is traded at a level of 8.53x/1.08x PER/PBV.
IHSG Updates
JCI weakened -0.43% to 6,924.78 on Friday (08/09), followed by net foreign sell reaching IDR1.1 trillion. A number of sectors experienced weakening and weighed on the index, led by the transportation sector (-1.72%) followed by the property sector (-1.30%). On the other hand, sectors that experienced strengthening were led by the technology sector (+1.58%) followed by the health sector (+0.31%). The decline in IHSG aligns with the contracting movement of Asian stock exchanges, where investors negatively responded to the release of Japan's economic growth data in 2Q23, which grew only by +4.8% QoQ (vs a consensus of +5.5% QoQ). The Rupiah closed at IDR15,325/USD. We estimate that the JCI will move in the price range of 6,912-6,946. Today's recommendation: AUTO, MEDC, PTBA, TOWR.
Corporate Actions
IPO: AEGS (IDR100/share)
Cum Dividend: ITMG (IDR2,660/share)
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