Global Market Highlights
DJIA flat +0.01% on Tuesday (29/11), while S&P500 (-0.16%) and Nasdaq (-0.59%). Wall Street was corrected as consumer confidence data contracts in Nov-2022 to a level of 100.2 (vs 102.2 in Oct-2022). In addition, the increase in the US T-note 10Y yield to a level of 3.75% also weighed on the index. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ 2nd Est Q3; 2) US Fed Chair Powell Speech; 3) Germany Unemployment Rate Nov.
Domestic Update
• Investors’ interest in the SBSN auction on Tuesday (29/11/22) decreased as reflected in the incoming bid value of only IDR9.87 trillion (vs IDR11.51 trillion at the auction on 15 November 2022). MNCS Comment: We view that the decline in auction interest was caused by volatility in global financial markets which triggered the US T-note yield and the US Dollar index to strengthen.
• Furthermore, the national Covid-19 daily rate had increased by 5,766 active cases (29/11).
Company News
1. BUMI IJ targets coal production volume in FY23F to reach 80 million tons (Kontan). MNCS Comment: Therefore, the production target increased +14% YoY from the production target in FY22E of 70 million tonnes. Meanwhile, until 9M22, coal production had reached 53.7 million tons, or 76.7% of the FY22E realization. We also see the company maintaining profitability by increasing volume amid the normalization of coal prices. Currently, BUMI is traded at the level of 8.57x PER.
2. SMGR IJ projects the value added from consolidation with SMBR will reach IDR1.6 trillion in the next 5 years (Investor ID). MNCS Comment: The consolidation of SMBR into the SMGR ecosystem will certainly strengthen its market share position, especially in southern Sumatra, where SMBR's market share until 1H22 reached 33%. With SMBR's production capacity of 3.85 million tonnes, SMGR's total production capacity will be 56.5 million tonnes, as well as an estimated additional sales volume of ~1.9 million tonnes at SMGR. Currently, SMGR is traded at the level of 20.49x/1.21x PER/PBV.
3. SMRA IJ pushes marketing sales in FY22E through landed houses (Market Bisnis). MNCS Comment: Marketing sales achievements up to 10M22 reached IDR3.79 trillion, or realization reached 75.8% of the FY22E target of IDR 5 trillion. Meanwhile, for landed houses, up to 10M22, marketing sales reached IDR 2.71 trillion, or 77.4% has been realized from the FY22E target of IDR3.5 trillion (71% contribution). Currently, SMRA is traded at the level of 25.19x/1.17x PER/PBV.
IHSG Updates
JCI weakened -0.08% to 7,012.07 on Tuesday (29/11), followed by net foreign buy which reached IDR776.62 billion. A number of sectors weakened and weighed on the index, led by the technology sector (-2.82%) and followed by the financial sector (-0.19%). On the other hand, the sectors that experienced strengthening were the energy sector (+1.69%) and followed by the health sector (+1.56%). The index weakened amid the strengthening of some Asian stock exchanges. We see that market players tend to wait and see ahead of the release of China Manufacturing PMI data in Nov-2022 which is expected to continue its contraction to a level of 49 points (vs. 49.2 points in Oct-2022), as well as weakening of stocks technology stocks which weighing on the index run. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,743/USD. We estimate that the JCI will move in the price range of 6,988-7,060. Today's recommendation: LPPF, MDKA, SMGR, SRTG.
Corporate Actions
Cum Rights: MITI (IDR165/share)
RUPS: BUKA, BBKP
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