JCI 2023 Predictions At Level 7,880, Mirae Sekuritas: Ditopang Non-Cyclical And Financial Consumer Sectors

Head of Research Team & Strategic Mirae Asset Sekuritas Hariyanto Wijaya. (Photo: Doc. Mirae Sekuritas)

JAKARTA - PT Mirae Asset Sekuritas Indonesia predicts that the Composite Stock Price Index (IHSG) next year can reach the level of 7,880. This level is up about 11 percent from the November 2022 position with the support of the issuer's net profit growth in a sustainable manner.

Head of Research Team & Strategic Mirae Asset Sekuritas Hariyanto Wijaya said the basic scenario (base-case scenario) was also supported by the preference of global investors in the stock market of developing countries, including Indonesia.

"For the sector, we have a non-cyclical and financial consumer sector because it will still be prospective and can be an option next year," Hariyanto said in the 2023 Talk & Market Outlook, Tuesday, December 6.

According to him, the non-cyclicals consumer sector is still attractive because the profit margin of companies in this field can still increase and their net profit can grow in 2023. The growth in stock issuer performance in the sector, he continued, is a positive impact of the higher selling price than the increase in agricultural product prices due to normalization since July 2022.

For the financial sector, Hariyanto predicts that bank net profit growth will continue to strengthen in 2023, supported by loan growth and high net interest margin (NIM) growth next year. In addition, he assessed that the decline in reserves or provisional burdens that are predicted to occur next year will also support the growth of net banking profit.

Regarding monthly stock pick, he added three new stocks, namely three non-cyclical consumer companies, namely ICBP, INDF, and MYOR as replacements for DSNG, INTP, and SMGR. Stock choices are inclined to the banking sector, coal mining, and consumer non-cyclicalals, represented by shares of BMRI, BBRI, BTPS, BNGA, ITMG, INDF, ICBP, and MYOR.

"As of December 5, the same monthly stock pick produces an accumulated return of 79.9 percent (vs accumulated return of the JCI 9.3 percent) since the start of a monthly stock pick in August 2019. Therefore, monthly stock pick outperforms the JCI by 70.6 percent", said Hariyanto.

On the same occasion, Senior Economist Mirae Asset Sekuritas Rully Arya Wisnubroto predicts that bank credit growth next year will still be quite promising considering that government policies and monetary authority are still quite accommodative even though interest rates are predicted to continue.

"We predict that Bank Indonesia will continue to increase interest rates to control the increase in inflation and the exchange rate of the US dollar. Meanwhile, macroprudential policies and the banking sector are still accommodative to support bank credit growth," said Rully.

He predicts that Indonesia's economic recovery will also still be in line with predictions and expectations throughout the third quarter of 2022, which is reflected in the continued recovery in community mobility and consumption, accompanied by a strong foreign trade balance.

Household consumption, continued Rully, will still be moderate until the first quarter of 2023 despite a national economic slowdown next year, especially the limited mobility of the community after subsidized fuel prices rose.

The domestic economic slowdown, he continued, is still better than the global economic slowdown which has begun to appear until the end of this year. He assessed that the global economic slowdown has been reflected in the weakening of manufacturing activity in developed economies.

He said developed economies such as the United Kingdom and the European Zone had already experienced a weakening of the economy after being affected by monetary tightening policies and the energy crisis caused by the Russia-Ukraine conflict.