Equity Strategy │ 3 January 2024

Equity Strategy
January Effect

Several +Ve momentum in January INDEX TARGET

End-2024 JCI: 7,800
JCI presents a robust foundation for a rally in the current month (Jan24), driven by several key End-2024 IDX80: 146
factors: 1) a reinforced Rupiah sentiment resulting from the recent Global bonds offering by the
government, poised to elevate FX reserves (our economists advocate for tactical approach to
USD/IDR trading at 15,200), 2) the anticipation of increased Jan-Feb government spending amid
the approaching election scheduled for 14 February 2024, and 3) prevailing dovish sentiments on
interest rates. The realized 2023 state budget deficit reached -Rp347.6trn (-1.65% of GDP),
surpassing the initial outlook of -Rp486.4trn (-2.27% of GDP). As the 2024 state budget foresees a
higher deficit of -Rp522.8trn (-2.29% of GDP), we anticipate an early surge in expenditure becoming
apparent in Jan-Feb.

Back in 2023, underperformance of China reflation in 2023 meant that the world got a reprieve in
terms of inflation (figure 5). Subsequently, Indonesia's latest Jan23 Consumer Price Index (CPI)
data revealed a lower-than-anticipated figure of +2.61% YoY (Previous: +2.86%, Consensus:
+2.74%). Examining the Federal Reserve's interest rate trajectory, the most recent rate plot (figure
6) indicates a shift towards a potential rate cut, heightening the appetite for risk-on asset classes.
Following this, both the S&P 500, predominantly composed of US tech stocks, and Bitcoin have
registered substantial gains of +4% and +17%, respectively, over the past month.

Our historical data tracker (2010-2023) suggests that there is a 64% probability that JCI to
book a positive MoM growth in January (refer to figure 2).
Willinoy Sitorus
willinoy.sitorus@trimegah.com
021 – 2924 9105
Implication to equity market

JCI closed at 7,272.8 end of 2023, booking a +6.2% YoY increase. In contrast, IDX 80 reached Adi Prabowo
133.7, registering a more modest YoY growth of +1.0%. The large gap is due to IDX80’s absence adi.prabowo@trimegah.com
of BREN and AMMN’s inclusion which experienced a significant rally back in 2023. 021 - 2924 9107

Within the group of highly regarded foreign stocks, including BBCA, BMRI, BBRI, BBNI, ASII, and
Jonathan Gunawan
TLKM, exhibiting a robust 0.7 correlation to foreign flows, it is notable that ASII has experienced
jonathan.gunawan@trimegah.com
comparatively weaker performance, particularly evident in the past 3 months with a decline of 7.0%
021 - 2924 9096
(in contrast to the +3.95% average increase observed in BBCA, BMRI, BBRI, BBNI). This situation
presents a constructive opportunity for favorable trading momentum in ASII.

In our previous note, we mentioned that we have a bullish stance on the consumer sector. With
Rupiah to strengthen in the near-term, we did a quick analysis on the consumer stocks under our
coverage that tends to outperform when Rupiah strengthens (3 years back-testing), which are (in
orderly manner) GGRM (0.85), ACES (0.82), ERAA (0.82), SIDO (0.56) and HMSP (0.55).

As risk-on asset class is reviving, tech-related stocks such as GOTO, ARTO (NR) has a good trading
opportunity as well.

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 1

 Figure 1. JCI Index, JCI Index (excl. AMMN, BREN, CUAN) 2022 – 2023 & IDX80

7500

7273
7300

7100 7026

6900 6974 If we use free-float weighted

M. Cap and the same
6700 exclusion, JCI performed
630bps worse, ending at
6,846 (-0.1% YoY).
6500

6300
Jan-23
Jan-23

Nov-23
Apr-23
Apr-23

Jul-23

Nov-23
Jun-23
Jun-23
Jun-23

Jul-23
Dec-22

Feb-23
Feb-23
Mar-23
Mar-23

Aug-23

Dec-23
Dec-23
Dec-23
May-23
May-23

Aug-23

Oct-23
Sep-23
Sep-23

Oct-23
JCI Index JCI Index (Excl. AMMN BREN CUAN)* IDX80 (Rebased)
* Using Market Cap. Weighting Method

Source: Bloomberg, Trimegah research

Figure 2. JCI Monthly Seasonality Table

(%) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
Average 0.6 1.5 0.4 1.0 -1.3 0.3 2.3 -0.9 -0.2 2.2 -0.3 2.7 8.6
2023 -0.2 0.1 -0.6 1.6 -4.1 0.4 4.1 0.3 -0.2 -2.7 4.9 2.7 6.2
2022 0.8 3.9 2.7 2.2 -1.1 -3.3 0.6 3.3 -1.9 0.8 -0.3 -3.3 4.0
2021 -2.0 6.5 -4.1 0.2 -0.8 0.6 1.4 1.3 2.2 4.8 -0.9 0.7 9.7
2020 -5.7 -8.2 -16.8 3.9 0.8 3.2 5.0 1.7 -7.0 5.3 9.4 6.5 -5.3
2019 5.5 -1.4 0.4 -0.2 -3.8 2.4 0.5 -1.0 -2.5 1.0 -3.5 4.8 1.6
2018 3.9 -0.1 -6.2 -3.1 -0.2 -3.1 2.4 1.4 -0.7 -2.4 3.9 2.3 -2.7
2017 -0.1 1.8 3.4 2.1 0.9 1.6 0.2 0.4 0.6 1.8 -0.9 6.8 20.1
2016 0.5 3.4 1.6 -0.1 -0.9 4.6 4.0 3.3 -0.4 1.1 -5.1 2.9 15.6 Index tends to perform
2015 1.2 3.0 1.3 -7.8 2.6 -5.9 -2.2 -6.1 -6.3 5.5 -0.2 3.3 -11.3 positively in January, with an
2014 3.4 4.6 3.2 1.5 1.1 -0.3 4.3 0.9 0.0 -0.9 1.2 1.5 21.7 up probability of 64%.
2013 3.2 7.7 3.0 1.9 0.7 -4.9 -4.3 -9.0 2.9 4.5 -5.6 0.4 -1.1
2012 3.1 1.1 3.4 1.4 -8.3 3.2 4.7 -2.0 5.0 2.1 -1.7 1.0 13.0
2011 -8.0 1.8 6.0 3.8 0.5 1.3 6.2 -7.0 -7.6 6.8 -2.0 2.9 3.2
2010 3.0 -2.4 9.0 7.0 -5.9 4.2 5.3 0.4 13.6 3.8 -2.9 4.9 46.2

Up 9 10 10 10 6 9 12 9 6 11 4 13 10
Down 5 4 4 4 8 5 2 5 8 3 10 1 4
Total 14 14 14 14 14 14 14 14 14 14 14 14 14
Up Probability 64% 71% 71% 71% 43% 64% 86% 64% 43% 79% 29% 93% 71%

Source: Bloomberg, Trimegah research

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 2

 Figure 3. JCI Sub-Indices Weight (2023)
100%

90%

80%

70%

60%

50%
Since Oct’23 IDXINFRA has
40%
gained sub-indices share due to
30% BREN as the stock end up at
4.04% weight.
20%

10%

0%
Dec' 22 Jan' 23 Feb' 23 Mar' 23 Apr' 23 May' 23 Jun' 23 Jul' 23 Aug' 23 Sep' 23 Oct' 23 Nov' 23 Dec' 23

IDX Sector Financials (IDXFINANCE) IDX Sector Consumer Non-Cyclicals (IDXNONCYC) IDX Sector Basic Materials (IDXBASIC)
IDX Sector Energy (IDXENERGY) IDX Sector Infrastructures (IDXINFRA) IDX Sector Technology (IDXTECHNO)
IDX Sector Consumer Cyclicals (IDXCYCLIC) IDX Sector Healthcare (IDXHEALTH) IDX Sector Properties & Real Estate (IDXPROPERT)
IDX Sector Industrials (IDXINDUST) IDX Sector Transportation & Logistic (IDXTRANS)

Source: Bloomberg, Trimegah research

Figure 4. Big-6 Stocks Correlation to Foreign Flow

20.0
45,000.0 r = 0.7

15.0
35,000.0

25,000.0 10.0
As JCI gets more concentrated,
15,000.0 we see a higher correlation
5.0
between big-6 stocks and foreign
5,000.0
flow (r = 0.7).
0.0
(5,000.0)

-5.0
Note that in 2013, the correlation
(15,000.0) stood at r = 0.4.

(25,000.0) -10.0
Jun-22
Apr-22

Nov-22

Apr-23

Jun-23

Nov-23
Feb-22

Mar-22

Jul-22

Feb-23

Mar-23

Jul-23
Jan-22

May-22

Aug-22

Aug-23
Sep-22

Oct-22

Dec-22

Jan-23

May-23

Sep-23

Oct-23

JCI Monthly Net Foreign Flow (IDRbn) Average of Big-6 Stocks Monthly Return

Source: Bloomberg, Trimegah research

*Big-6 stocks: BBCA, BBRI, BMRI, BBNI, ASII and TLKM

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 3

 Figure 5. CPI (US, China, Indonesia)

12.0

10.0

8.0

6.0
% YoY

Underperformance of China
4.0
3.1
reflation in 2023 meant that
2.9 the world got a reprieve in
2.0 2.4 terms of inflation.

0.0
-0.5

-2.0

Indonesia Inflation US Inflation China Inflation Eurozone Inflation

Source: Bloomberg, Trimegah research

Figure 6. Fed Dot Plot (12M22 – 12M23)

6.0

5.5

5.0

4.5
This has shifted the
expectations on rate cut, as
4.0
%

Fed Dot Plot shifts, so does

the markets’ appetite for
3.5 risk-on asset classes, which
is especially pertinent in the
3.0 last 2 months of 2023.

2.5

2.0
2022 2023 2024 2025 2026 Longer-term

Dec-22 Mar-23 Jun-23 Sep-23 Dec-23

Source: Bloomberg, Trimegah research

Figure 7. S&P 500 & VIX Figure 8. Gold & BTC Price
30 6,000 2,200
4,900
5,500 2,150
25
4,700 5,000 2,100

2,050
4,500 20 4,500
2,000
4,000
4,300 1,950
15
3,500
1,900
4,100
3,000
10 1,850
3,900 2,500 1,800
5 2,000
3,700 1,750

1,500 1,700
3,500 0
Jun-23
Apr-23

Jul-23

Nov-23
Feb-23

Mar-23
Jan-23

May-23

Aug-23

Dec-23
Sep-23

Oct-23

Jan-24
Jun-23

Nov-23
Apr-23

Jul-23
Jan-23

Feb-23

Mar-23

May-23

Aug-23

Sep-23

Oct-23

Dec-23

Jan-24

BTC Price (USD) Gold Price (USD) (RHS)

S&P 500 VIX Index (RHS)

Source: Bloomberg, Trimegah research Source: Bloomberg, Trimegah research

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 4

 Figure 9. 2024 state budget

Realization Perpres Realization of % of

% of APBN Growth
Categories (in IDR tn) of 2022 APBN 2023 No. 75 of 2023 Perpres No. APBN 2024
2023 (%)
(LKPP) 2023 (Unaudited) 75 of 2023

A. Government Revenue 2,635.8 2,463.0 2,637.2 2,774.3 112.6 105.2 5.3 2,781.3
I. Tax Revenue 2,034.6 2,021.2 2,118.3 2,155.4 106.6 101.7 5.9 2,307.9
II. Non-Tax Revenue 595.6 441.4 515.8 605.9 137.3 117.5 1.7 473.0
B. Government Expenditure 3,096.3 3,061.2 3,117.2 3,121.9 102.0 100.2 0.8 3,304.1
I. Central government (BPP) 2,280.0 2,246.5 2,302.5 2,240.6 99.7 97.3 -1.7 2,446.5
1. Ministry/institutions (K/L) expenditure 1,084.7 1,000.8 1,000.8 1,153.5 115.2 115.2 6.3 1,077.2
2. Non-Ministry/institutions (non-K/L) expenditure 1,195.4 1,245.6 1,301.6 1,087.2 87.3 83.5 -9.0 1,369.3
II. Transfer to Regions and Village Funds (TKDD) 816.2 814.7 814.7 881.3 108.2 108.2 8.0 857.6
C. Primary Balance -74.1 -156.8 -38.5 92.2 -58.8 -239.4 -224.5 -25.5
D. Surplus/(Deficit) -460.4 -598.2 -479.9 -347.6 58.1 72.4 -24.5 -522.8
% of GDP -2.35 -2.84 -2.27 -1.65 -2.29
E. Budget Financing 591.0 598.2 479.9 359.5 60.1 74.9 -39.2 522.8
F. SiLPA/SiKPA 130.6 11.9

Source: MoF, Trimegah research

Figure 10. 3Y correlation of USD/IDR Vs. consumer share prices

1.00
0.85 0.82 0.82
0.80
0.56 0.55
0.60
0.42
0.40 0.27
0.20
GGRM, ACES, ERAA, SIDO, HMSP
0.00 have good positive momentums
-0.05 when IDR appreciates
-0.20
-0.23
-0.40 -0.30

-0.60 -0.45

-0.80 -0.67
-0.78 -0.79
-1.00

Source: Bloomberg, Trimegah research

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 5

 Research Team
Willinoy Sitorus
Fakhrul Fulvian
Adi Prabowo
Heribertus Ariando
Richardson Raymond
Kharel Devin Fielim
Alpinus Dewangga
Ignatius Samon
Sabrina
Jonathan Gunawan
Alberto Jonas Kusuma
Corporate Access
Nur Marini
Institutional Sales Team
Beatrix Susanto
Henry Sidarta, CFTe
Calvina Karmoko
Stefanus Indarto
Morgan Gindo
Retail Sales Team
Billy Budiman
Hasbie Sukaton
Jakarta Area
Ignatius Candra Perwira
Robby Jauhari
Sumatera
Alfon Ariapati
Eastern Indonesia
Carlo Ernest Frits Coutrier
East Java
Pandu Wibisono
Central Java, Area
Aloysius Primasyah
Laili Ma’muroh
West Java
Bhisma Herlambang
Renny Nurhayati Hidayat
PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com
Head of Research, Strategy willinoy.sitorus@trimegah.com +62-21 2924 9105
Economics, Fixed Income fakhrul.fulvian@trimegah.com +62-21 2924 9097
Banks, and Financial-related adi.prabowo@trimegah.com +62-21 2924 9107
Consumer, Media and Healthcare heribertus.ariando@trimegah.com +62-21 2924 9106
Telco, Tower, and Digital Media richardson.raymond@trimegah.com +62-21 2924 6325
Property, CPO, Cement, Toll, Small Caps kharel.devin@trimegah.com +62-21 2924 9106
Commodities, Auto, and Small Caps alpinus.raditya@trimegah.com +62-21 2924 6322
Consumer, Healthcare and Media & Tech ignatius.samon@trimegah.com +62-21 2924 9143
Telco, Tower, and Digital Media sabrina@trimegah.com +62-21 2924 9018
Economics and Fixed Income jonathan.gunawan@trimegah.com +62-21 2924 9096
Commodities, Auto, and Small Caps alberto.kusuma@trimegah.com +62-21 2924 9103
Corporate Access marini@trimegah.com +62-21 2924 6323
Head of Institutional Sales beatrix.susanto@trimegah.com +62-21 2924 9086
Head of Institutional Dealing henry.sidarta@trimegah.com +62-21 3043 6309
Equity Institutional Sales calvina.karmoko@trimegah.com +62-21 2924 9080
Equity Institutional Sales stefanus.indarto@trimegah.com +62-21 2924 9080
Equity Institutional Sales morgan.gindo@trimegah.com +62-21 2924 9076
Head of Retail Equity Sales billy.budiman@trimegah.com +62-21 3043 6310
Deputy Head of Retail Sales hasbie.sukaton@trimegah.com +62-21 2924 9088
Kelapa Gading, Jakarta ignatius.perwira@trimegah.com +62-21 8061 7270
BSD, Jakarta robby.jauhari@trimegah.com +62-21 5089 8959
Medan, Sumatera Utara alfon.ariapati@trimegah.com +62-61 4100 0000
Makasar, Sulawesi Selatan carlo.coutrier@trimegah.com +62-411 3604 379
Surabaya, Jawa Timur pandu.wibisono@trimegah.com +62-31 2973 18000
Semarang, Jawa Tengah primasyah.kristanto@trimegah.com +62-24 8600 2310
Solo, Jawa Tengah laili.mamuroh@trimegah.com +62-271 6775 590
Bandung, Jawa Barat bhisma.herlambang@trimegah.com +62-22 8602 6290
Cirebon, Jawa Barat renny.nurhayati@trimegah.com +62-231 8851 009
6
 Disclaimer

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While all reasonable care has been taken to ensure that information contained herein is not untrue or
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INVESTMENT RATING RULE:

Buy : Share price is expected to exceed more than 10% over the next 12 months
Neutral : Share price is expected to trade within the range of 0%-10% over the next 12 months
Sell : Share price is expected to trade below 0% over the next 12 months
Not Rated : The company is not within Trimegah research coverage

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in whole or in part, certifies that with respect to the companies or relevant securities that the analyst(s) covered in this report:
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The disclosure column in the following table lists the important disclosures applicable to each company that has been rated
and/or recommended in this report:

Company Ticker Disclosure (as applicable)

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2. It had an investment banking relationship with this company in the last 12 months.
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