Global Market Highlights

DJIA strengthened +0.50% on Thursday (08/06), followed by the S&P500 (+0.62%) and the Nasdaq (+1.02%). Wall Street managed to solidly strengthen, amid an increase in initial jobless claims as of June 3 to 261k, which is expected to control the inflation rate and make the Fed hold off on raising its benchmark interest rate at the FOMC Jun-2023. Today, the market will be looking toward several data releases such as: 1) US Baker Hughes Oil Rig Count June 9; 2) Japan 3-Month Bill Auction.

Domestic Update

Ahead of the release of data on Indonesia's foreign exchange reserves as of May-2023, the market is anticipating a continued downward trend of foreign exchange reserves to the level of USD143-144 billion. MNCS Comment: This is based on the potential for a reduction in the trade balance surplus amid DXY’s appreciation in May-2023 on top of UST yield’s rise, the continuing trend of depreciating commodity prices and the potential high interest costs in servicing state debts.

Company News

1. IMPC IJ targets a +24.8% YoY increase in net profit to IDR390 billion in FY23E (Investor ID). MNCS Comment: We are of the view that this target will be supported, one of which is through the IDR280 billion capex allocation for factory operational needs. In addition, by sluggish inflation it is hoped that it will be able to restore consumer purchasing power, which can boost income. Currently, IMPC is traded at the level of 38.30x/8.70x PER/PBV.
2. ANJT IJ targets CPO production growth of +5.4% YoY to 290,685 tons, and FFB production target of 904,333 tons (+7.8% YoY) (Market Bisnis). MNCS Comment: CPO production realization up to 1Q23 reached 20.7% of the FY23E target. We expect more replanting activities to maintain more stable production and yields. In addition, we see the potential for El Nino to be a cushion for future CPO prices. Currently, ANJT is traded at the level of 0.36x PBV.
3. DSNG IJ will distribute a cash dividend for FY22 of IDR318 billion, or the equivalent of IDR30 per share (Kontan). MNCS Comment: With that in mind, we estimate DSNG will offer a dividend yield of 5.3%. The amount of DPS increased compared to the previous year (IDR20 per share) as the company's profitability increased in FY22. Currently, DSNG is traded at the level of 7.00x/0.73x PER/PBV.

IHSG Updates

JCI strengthened +0.70% to 6,666.33 on Thursday (08/06), followed by a net foreign sell of IDR387.07 billion. The majority of sectors experienced strengthening and drove the index rate, led by the technology sector (+2.14%) followed by the energy sector (+1.16%). On the other hand, the sector that led to the decline was the property sector (-0.71%) followed by the raw materials sector (-0.37%). The index managed to outperform some of the weakening Asian stock exchanges, ahead of the release of data on foreign exchange reserves in May-2023. The rupiah closed lower at IDR14,895/USD. We estimate that the JCI will move in the price range of 6,615-6,694.

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