Global Market Highlights
The DJIA weakened -0.31% on Tuesday (19/09), followed by the S&P500 (-0.22%) and Nasdaq (-0.23%). Wall Street was corrected, where investors responded negatively to the release of weak employment market data. It was noted that housing starts in Aug-2023 fell -11.3% MoM. Today, the market will be looking toward several data releases such as: 1) US FOMC Economic Projections; 2) US Fed Interest Rate Decision; 3) UK Inflation Rate YoY Aug-2023.
Domestic Update
• Domestic credit performance in Aug-2023 is projected to continue its growth. MNCS Comment: We are optimistic that the credit growth target for this year can be achieved, in line with the ongoing economic growth momentum and the sustained purchasing power of the community. Additionally, the Net Weighted Balance (SBT) recorded in Aug-2023 is 86.2%, an increase from the realization in Jul-2023 of 45.1%.
Company News
1. BRIS IJ reported a net profit in 1H23 of IDR2.8 trillion, an increase of +32.4% YoY (vs IDR2.1 trillion in 1H22) (Emiten News). MNCS Comment: This net profit performance was supported by: 1) loan growth of +16.0% YoY; 2) a reduction in the cost of credit to 1.55% (vs 2.04% in 1H22); 3) a NIM of 5.99%. Currently, BRIS is traded at the level of 2.08x PBV.
2. PLIN IJ plans to distribute interim dividends in FY23E amounting to IDR272 billion, equivalent to IDR77 per share (Investor ID). MNCS Comment: With this, we estimate that PLIN will offer a dividend yield of 2.6% (vs 5-year average of 5.8%). Currently, PLIN is traded at the level of 18.97x/0.96x PER/PBV.
3. SGRO IJ is preparing several strategies to boost production amidst the potential El-Nino effects (Kontan). MNCS Comment: We observe that the company has commendable productivity. Notably, the average age of their core plantation in FY22 is 14 years, still robust in producing yield amidst the upcoming El-Nino potential. Currently, SGRO is traded at the level of 8.82x/0.76x PER/PBV.
IHSG Updates
JCI strengthened +0.64% to 6,980.32 on Tuesday (19/09), followed by net foreign buy reaching IDR389.58 billion. A number of sectors experienced strengthening and pushed up the index rate, led by the raw materials sector (+2.18%) followed by the transportation sector (+1.02%). On the other hand, the sectors experiencing weakness were led by the cyclical sector (-1.32%), followed by the health sector (-0.68%). The index managed to rebound amidst a predominantly weakening Asian market, where investors are anticipating China's latest monetary policy expected to boost the economic outlook. The Rupiah closed lower at IDR15,380/USD. We estimate the IHSG will move within the price range of 6,960-7,000. Today's Recommendations: ADHI, ENRG, INKP, NSSS.
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