Global Market Highlights
The DJIA climbed by +0.20% on Tuesday (24/09), followed by the S&P 500 (+0.25%) and the Nasdaq (+0.56%). Wall Street strengthened, in line with the decline in the 10Y UST to 3.75% as markets assess the possibility of another rate cut in Nov-2024. This sentiment was driven by the drop in CB Consumer Confidence in Sep-2024, which fell to 98,7bps (vs 105.6/103.8bps Aug-2024/cons). Additionally, the continued growth of money supply (M2) in Aug-2024 to USD29.3 billion (+39.17% MoM) also acted as a positive catalyst for the stock markets. Today the market will be looking forward to several data releases such as: 1) US New Home Sales Aug-2024; 2) US MBA Purchase index Sep/20; 3) US EIA Crude Oil Stocks Change Sep/20.
Domestic Update
The Ministry of Finance (Kemenkeu) decided that there will be no increase in the excise tax rate on tobacco products (CHT) in 2025. MNCS Comment: Previously, the State Financial Accountability Agency (BAKN) recommended the government apply a minimum 5% excise tariff on tobacco products for the next two years. Despite no increase in the excise rate, we anticipate the government to adjust the retail selling price (HJE) of tobacco products next year, which would also lead to a higher VAT component. Additionally, there is ongoing discussion about raising cigarette VAT from 9.9% to around 10.7%.
Company News
1. ISAT IJ will conduct a stock split with a ratio of 1:4. MNCS Comment: As a result, the nominal value will change to Rp25/share (vs Rp100/share), with a total of 35.25 billion outstanding shares. We believe this corporate action will further enhance the liquidity of ISAT shares. Transaction with the new nominal in the regular and negotiated markets will begin on 14 Oct-24. ISAT is currently trading at 16.18x/2.83x PER/PBV.
2. BBNI IJ recorded a net profit growth (bank only) of +4.3% YoY, reaching Rp14.2 trillion as of 8M24. MNCS: Despite a decline in NII of -6.8% YoY and an increase in OPEX of +7.6% YoY, the company managed to achieve a net profit increase supported by a decrease in provision expenses of -26.7% YoY. Furthermore, NIM decreased to 3.9% (vs 4.4% in 8M23). BBNI is currently trading at 10.12x/1.45x PER/PBV.
3. BBCA IJ recorded a net profit (bank only) amounting to Rp36 trillion (+13.5% YoY) as of 8M24. MNCS Comment: We note that this net profit increase was driven by an NII growth of +8.8% YoY, in line with loans growth of +15.6% YoY and TPF growth of +4% YoY as of 8M24. Furthermore, CoC decreased to 0.3%, supported by a reduction in provision expense of -25.2% YoY in 8M24. BBCA is currently trading at 5.53x PBV.
IHSG Updates
The JCI remained relatively flat, up +0.04% at 7,778.49 on Tuesday (24/09), amid a net foreign buy of IDR11.79 billion. Most sectors experienced gains, led by the consumer non-cyclical sector (+0.99%) and followed by the infrastructure sector (+0.54%). On the other hand, sectors that weakened were led by the technology sector (-1.14%) and followed by the consumer cyclical sector (-0.95%). The index tended to close flat amid gains in Asian markets, where the market welcomed the PBOC's move to stimulate the financial market through a 50 bps cut in bank reserve requirements. Furthermore, this is anticipated to act as a catalyst for China's property market moving forward. The Rupiah closed higher at IDR15,185/USD. We estimate that the JCI will move in the price range of 7,721-7,820. Today's recommendations: ANTM, BFIN, CTRA, UNTR.
Corporate Actions
EGMS: IPCM, TRIN, KOKA
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