Global Market Highlights
The DJIA rose by +0.12% on Friday (13/10), while S&P500 (-0.50%) and Nasdaq (-1.23%). Wall Street closed with a mixed performance. Investors were attentive to the release of the Michigan Consumer Sentiment Preliminary data for Oct-2023, which fell to 63 (vs the consensus of 67.2). Additionally, concerns about a significant rise in crude oil prices due to the Middle East conflict potentially pushing up future inflation. Today, the market will be looking toward several data releases such as: 1) Japan Industrial Production Final YoY Aug-2023; 2) Germany Wholesale Prices YoY Sep-2023; 3) US NY Empire State Manufacturing Index Oct-2023.
Domestic Update
Bank Indonesia (BI) reported, based on transactions from 2 - 5 October 2023, that non-residents in the domestic financial market had net sales of IDR2.50 trillion. This comprised net sales of IDR2.92 trillion in the government bond market, net purchases of IDR200 billion in the stock market, and net purchases of IDR400 billion in the SRBI. MNCS Comment: We have observed that despite the 10-year government bond yield falling to 6.76% (vs 7.03% in the previous week), foreign investors significantly increased their selling actions. From 2 - 5 October, foreign investors recorded a net sale of IDR2.92 trillion in the government bond market. We anticipate an inflection point this week due to the auction schedule on Tuesday, 17 October 2023.
Company News
1. AVIA IJ will distribute interim dividends amounting to IDR 681.5 billion, equivalent to IDR 11 per share (Emiten News). MNCS Comment: Therefore, we estimate AVIA will offer an interim dividend yield of 2.1%. Meanwhile, with a net profit of IDR806.6 billion in 1H23, the payout ratio reaches 84.5%. Currently, AVIA is traded at a level of 20.55x/3.38x PER/PBV.
2. CSAP IJ has established a new business entity named PT Catur Sentosa Adiprima (CSAD) with a capital of IDR4 billion. CSAD is engaged in wholesale trade for food, soft drinks, and daily necessities (Emiten News). MNCS Comment: We view the company's effort to diversify positively, as it can strengthen the revenue stream, in addition to its building materials trade with Mitra10. We see CSAP developing the full potential to reach the retail food staples market. Currently, CSAP is traded at a level of 13.97x/1.09x PER/PBV.
3. SMDR IJ will add 6 new ships to its fleet in FY24F (Market Bisnis). MNCS Comment: The expansion of the fleet is less than FY23E, which amounted to 11 units. However, with this expansion, it is expected to drive the company's future performance. Currently, SMDR is traded at a level of 3.62x/0.80x PER/PBV.
IHSG Updates
The JCI weakened by -0.12% to 6,926.78 on Friday (13/10), followed by a net foreign buy of IDR149.44 billion. Most sectors experienced declines, putting pressure on the index, led by the technology sector (-2.90%), followed by the property sector (-1.20%). On the other hand, sectors that gained ground were led by the infrastructure sector (+4.19%), followed by the non-cyclical sector (+0.36%). The index's decline is in line with movements in Asian markets, where investors were closely monitoring US inflation data in September 2023, which exceeded consensus expectations and raised concerns of hawkish policies from The Fed. The Rupiah closed higher at IDR15,683/USD. We estimate the IHSG will move within the price range of 6,896-6,930. Today's Recommendations: BIRD, ESSA, EXCL, UNVR.
Corporate Actions
Cum dividend: ASGR (IDR13/share)
EGMS: DCII
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