Global Market Highlights
The DJIA strengthened by +0.66% on Friday (03/11), followed by S&P500 (+0.94%) and Nasdaq (+1.38%). Wall Street solid extended its gains as the UST 10Y yield declined to 4.57%, influenced by the release of the ISM Services PMI data for Oct-2023, which dropped to 51.8 (vs 53.6 previously). Today, the market will be looking toward several data releases such as: 1) Japan Jibun Bank Services PMI Final Oct-23; 2) Germany Factory Orders MoM Sep-23; 3) UK New Car Sales YoY Oct-23.
Domestic Update
Bank Indonesia (BI) reported that based on transaction data from October 30 to November 2, 2023, non-residents in the domestic financial market recorded a net buy of IDR2.83 trillion, consisting of a net buy of IDR4.07 trillion in the SBN, a net sell of IDR 2.84trillion in the stock market, and a net buy of IDR 1.61 trillion in the SRBI market. MNCS Comment: We view the net foreign buy in the SBN as being supported by the decline in SBN yields as well as UST yields. This has also been driven by the strengthening of the Rupiah, given the expectation that The Fed has ended its era of interest rate hikes. We also anticipate net foreign buy in the stock market this week.
Company News
1. HERO IJ reported a net profit of IDR19.4 billion in 9M23 (vs a net loss of IDR85.4 billion in 9M22) (Emiten News). MNCS Comment: The increase in net profit is attributed to the profit from operations that were discontinued in 2023. HERO also recorded a positive EBIT of IDR33.4 billion. Furthermore, a +17.6% YoY increase in revenue drove the rise in net profit. Meanwhile, the company's GPM decreased to 40.0% (vs. 41.4% in 9M22). Currently, HERO is traded at a level of 4.88x PBV.
2. PRDA IJ reported a -14.4% YoY decrease in net profit to IDR235.7 billion in 9M23 (vs IDR275.2 billion in 9M22) (Emiten News). MNCS Comment: The decline in net profit is due to a +11.3% YoY increase in OPEX to IDR707.9 billion in 9M23 (vs IDR636.1 in 9M22). Furthermore, we noted that the GPM/NPM both decreased to 60.7%/14.6% (vs 60.9%/17.4% in 9M22). Currently, PRDA is traded at a level of 18.12x/2.43x PER/PBV.
3. SLIS IJ recorded a -35.8% YoY decrease in net profit to IDR16.0 billion in 9M22 (vs IDR25.0 billion in 9M22) (Emiten News). MNCS Comment: The decrease in net profit is attributed to a -9.1% YoY decrease in revenue to IDR324.3 billion (vs IDR356.9 billion in 9M22). Additionally, a +11.8% YoY increase in OPEX burdened SLIS's profitability. We noted that the GPM/NPM of the company decreased to 13.1%/4.9% (vs 15.6%/7.0% in 9M22). Currently, SLIS is traded at a level of 9.56x/0.60x PER/PBV.
IHSG Updates
The JCI strengthened by +0.55% to 6,788.85 on Friday (03/11), followed by a net foreign buy of IDR309.60 billion. Almost all sectors experienced gains, led by the energy sector (+1.55%), followed by the technology sector (+1.37%). On the other hand, sectors that weakened led by the healthcare sector (-1.46%), followed by the cyclical sector (-0.29%). The index's strengthening aligns with movements in the Asian markets, where the expectation that The Fed has ended its interest rate hike era continues to be a positive catalyst. Investors are also optimistic about the release of Indonesia's 3Q23 GDP data. Furthermore, investors are monitoring China's Caixin PMI composite data for Oct-2023, which successfully maintained its expansionary level at 50 (vs 50.9 previously). The Rupiah closed higher at IDR15,728/USD. We estimate the IHSG will move within the price range of 6,733-6,810. Today's Recommendations: BSDE, ERAA, ERAL, ESSA.
Corporate Actions
Cum Dividend : PNGO (IDR70/share)
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