Global Market Highlights
The DJIA strengthened by +1.15% on Friday (10/11), followed by S&P500 (+1.56%) and Nasdaq (+2.05%). Wall Street rebounded amidst disappointing macroeconomic data. The Michigan consumer sentiment preliminary in Nov-2023 dropped to 60.4 (vs 63.7 consensus). Meanwhile, the rise in technology stocks and a slight decrease in UST yields to 4.62% acted as catalysts for the index. Today, the market will be looking toward several data releases such as: 1) Japan PPI YoY Oct-23; 2) US Consumer Inflation Expectations Oct-23; 3) China Outstanding Loan Growth YoY Oct-23.
Domestic Update
Bank Indonesia (BI) recorded, based on transactions from November 6 - 9, 2023, a net sale by non-residents in the domestic financial market amounting to IDR1.27 trillion (net sales of IDR1.59 trillion in the SBN market, net sales of IDR1.35 trillion in the stock market, and net buy of IDR1.66 trillion in the SRBI). MNCS Comment: We observe a continued outflow in the SBN market as investors adopt a wait and see approach ahead of the release of US inflation data in Oct-2023, which could influence The Fed's decision at the upcoming FOMC. Meanwhile, we attribute the outflow in the stock market to the negative sentiment from last month's increase in BI7DRR and the lack of positive catalysts.
Company News
1. ASRI IJ recorded a net profit increase of +97.6% YoY to IDR210.0 billion in 9M23 (vs IDR106.3 billion in 9M22) (Emiten News). MNCS Comment: The increase in net profit was supported by a FX gain of IDR25.3 billion in 9M23 (vs a FX loss of IDR323.0 billion in 9M22). Meanwhile, ASRI's revenue decreased by -9.5% YoY to IDR2.5 trillion (vs IDR2.7 trillion in 9M22). Operating profit decreased by -15.2% YoY. However, NPM increased to 8.4% (vs 3.9% in 9M22). Currently, ASRI is traded at a level of 11.44x/0.30x PER/PBV.
2. ITMG IJ reported a net profit decline of -54.6% YoY to USD405.8 million in 9M23 (vs USD893.8 million in 9M22) (Emiten News). MNCS Comment: The decline in net profit was due to a -30.2% YoY decrease in revenue to USD1.8 billion (vs USD2.6 billion in 9M22), in line with the normalization of global coal prices. Note that the GPM/NPM of the company both decreased to 33.4%/22.2% (vs 53.8%/34.2% in 9M22). Currently, ITMG is traded at a level of 3.34x/1.07x PER/PBV.
3. RALS IJ reported a net profit of IDR254.7 billion in 9M23, a -14.6% YoY decrease (vs IDR298.1 billion in 9M22) (Emiten News). MNCS Comment: The decline in net profit accompanies a -10.9% YoY decrease in revenue, leading to a prolonged decrease in profitability. However, RALS's GPM increased to 51.2% (vs 49.2% in 9M22). Meanwhile, NPM experienced contraction to 11.9% (vs 12.4% in 9M22). Currently, RALS is traded at a level of 10.41x/1.00x PBV.
IHSG Updates
The JCI weakened by -0.42% to 6,809.26 on Friday (10/11), followed by a net foreign sell of IDR705.32 billion. Most sectors experienced a decline and burdening the index, led by the property sector (-1.04%), followed by the cyclical sector (-0.89%). On the other hand, sectors that experienced gains were led by the transportation sector (+0.43%), followed by the raw materials sector (+0.28%). The index weakened along with most other Asian markets as investors scrutinized The Fed's hawkish statements regarding the potential return of benchmark interest rate hikes. Additionally, investors adopted a wait and see approach ahead of the release of macroeconomic data early this week. The Rupiah closed lower at IDR15,655/USD. We estimate the IHSG will move within the price range of 6,763-6,830. Today's Recommendations: ADMR, ADRO, ANTM, SMGR.
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