IHSG: A Tactical Entry Point
Key Summary:
- Tactical trade entry point
- Conglomerate stocks contribute 20% to IHSG market cap
- IHSG valuation acts as a floor
October proved to be a difficult month where IHSG was down -2.7% and -1.6% at the start of November, practically erasing the gain since June low (3 months of gain erased in 3 weeks). As mentioned in our previous report few weeks ago (read here) where we highlighted to wait until 6,500-6,600, now IHSG is near that level and we think it is worth looking to enter the market again. Furthermore, excluding "conglomerate" stocks (as explained below) such as BREN and AMMN, the market is actually already down by a lot, which could see consolidation and bounce from here.
The outflows should start to subside as we already seen close to IDR10tn of foreign selling in the past 1 month, although note that 3Q23 results that were generally lower than expectation should take couple of more days for the market to digest. Note that IHSG has no attractive growth story, but at 6,500-6,600, its valuation should act as a floor for the market to start raising equity position.