FROM EQUITY RESEARCH DESK

 

IDEA OF THE DAY

 

 

 

 

 

 
     

Poultry: Concern on low livebird prices is overdone; Reaffirming robust FY24 earnings growth outlook (OVERWEIGHT)

  • On the back of a drop in chicken prices in 3Q24, the poultry sector has underperformed since the end of Jul24.
  • We reaffirm our view that lower feed costs and a potential rebound in 4Q24 chicken prices will support profitability in 2H24.
  • We maintain our Overweight rating given: 1) robust FY24-25 earnings growth, 2) mild fund positioning, and 3) cheap valuations.

To see the full version of this report, please click here

 

Macro Strategy: The Prelude to Rate Cut

  • BI appears to add IDR liquidity, consistent with historical pre-rate cut cycle trends, by reducing SRBI auction and adding to its SBN holdings.
  • Still a balance job data, with NFP below expectation but unemployment rate down to 4.2% while average hourly earnings rising faster to 3.8%.
  • A gradual and predictable FFR cut is primary for market stability, as a larger rate cut would risk the return of recession fears.

To see the full version of this report, please click here

 

To see the full version of this snapshoot, please click here

 

MARKET NEWS

 
       
         
             
                   
                       
                         
                         

MACROECONOMY

China's Inflation Slightly Accelerates in Aug24

China reported a slight acceleration in inflation in Aug24. The headline inflation reached 0.6% yoy, lower than market expectations of 0.7%, but higher than July’s 0.5%. On a monthly basis, the CPI rose 0.4%, extending the monthly inflation trend that started in Jul24. The core inflation rose 0.3% yoy, the lowest since Mar21. (Trading Economics)

 

Indonesia Consumer Confidence Rose to 124.4 In Aug24

Indonesia consumer confidence rose to 124.4 in Aug24, higher than July’s 123.4. Confidence increased in all expenditure groups except the Rp3.1-4mn group. The Current Economic Perception also rose to 114 from 113.5, due to an increase in Current Income Index (122.9 vs. 121.4). Meanwhile, Job Availability slightly fell (107.6 vs. 107.7) and the Purchase of Durable Goods was unchanged (111.5). (Bank Indonesia)

 

SECTOR

Automotive: The Government Aims to Produce 600,000 Electric Vehicles by 2030

The government aims to produce 600,000 electric vehicles by 2030. However, many still doubt whether this target can be achieved due to the substantial production capacity required. According to data from Gaikindo, national production of electric vehicles was 15,659 units as of July 2024. (Kontan)

 

CORPORATE

HRTA to Issue Rp1tr Bonds with 6.75-7.5% Interest Rate

HRTA plans to issue its 2024 Sustainable Bonds I, valued at Rp1tr. The funds from this bond issuance will be used to expand its retail store network and gold bar sales, and to repay part of the principal of maturing bonds. The bonds will be issued in two series: Series A with a three-year tenor and Series B with a five-year tenor. The interest rates for Series A range from 6.75% to 7.50% per annum, while Series B rates range from 7% to 7.5% per annum. The public offering of these bonds is scheduled for October 22-24, 2024. (Emiten News)

 

KLBF Focuses on Strengthening its Market Presence in Southeast Asia

KLBF will focus on strengthening its market presence in Southeast Asia by adding new products that align with market needs. KLBF is taking steps to enhance its oncology drug penetration in Southeast Asia and is forming a strategic partnership with Alliance Pharma, an Indian company. The contribution of KLBF’s exports is around 5-6% of the company's total sales. (Bisnis)

 

MBMA is Conducting a Public Offering of Bonds worth Rp2tr

MBMA is conducting a public offering of its II Merdeka Battery Materials Bonds 2024 with a principal amount of Rp2tr. There are two series being offered: Series A, with a tenor of 367 calendar days from the issuance date, and Series B, with a tenor of 3 years. Interest on the bonds will be paid quarterly. The first interest payment will be made on January 8, 2025, while the final interest payment and the redemption of the bonds will occur on October 15, 2025, for Series A, and October 8, 2027, for Series B. (Investor Daily)