Global Market Highlights
The DJIA rose by +0.93% on Monday (16/10), followed by S&P500 (+1.06%) and Nasdaq (+1.20%). Wall Street closed on a positive note as investors responded favorably to diplomatic efforts to reduce geopolitical tensions in the Middle East between Israel and Hamas. Additionally, the market anticipates positive 3Q earnings releases. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM Sep-2023; 2) Germany ZEW Economics Index; 3) UK Unemployment Rate Aug-23.
Domestic Update
BPS reported that Indonesia's trade balance in Sep-2023 recorded a surplus of USD3.42 billion. MNCS Comment: The trade balance performance in Sep-2023 exceeded consensus estimates of USD2.13 billion. This was driven by a larger drop in imports compared to exports. However, the ongoing trade surplus has not been able to curb the depreciation of the Rupiah's exchange rate (+0.73% YTD), influenced by the Dollar index's upward pressure due to rising UST yields. We anticipate a moderation in the trade balance performance ahead, as import performance is expected to pick up. We believe the festive season in 4Q will drive the demand for crude oil and cereal products.
Company News
1. DMAS IJ reported marketing sales reaching IDR1.37 trillion in 9M23 (Emiten News). MNCS Comment: Marketing sales grew +3.2% YoY (vs IDR1.33 trillion in 9M22). With a FY23E marketing sales revenue target of IDR1.8 trillion, the realization in 9M23 reached 76.1%. Currently, DMAS is traded at a level of 7.07x/1.34x PER/PBV.
2. AKRA IJ increased the capital of its entity, PT AKR Sea Transport (AST), by IDR80 billion to IDR274.9 billion (Emiten News). MNCS Comment: We assess the company's efforts to strengthen the operational business through capital infusion positively. By increasing capital, the number of ship fleets is expected to grow, which should have a positive impact on the logistics segment. Currently, AKRA is traded at a level of 14.07x/2.64x PER/PBV.
3. BRMS IJ reported an increase in gold ore processing capacity at the second plant in Palu, Central Sulawesi, above 2k tons/day. Meanwhile, in October 2023, the average capacity has exceeded 3k/day (Market Bisnis). MNCS Comment: We anticipate an increase in gold ore processing utilization approaching 4k tons/day in the future, in line with increased exploitation of existing mines. This is expected to drive the company's performance forward. Currently, BRMS is traded at a level of 1.59x PBV.
IHSG Updates
The JCI weakened by -0.44% to 6,896.29 on Monday (16/10), followed by a net foreign sell of IDR55.25 billion. Most sectors experienced declines, led by the property sector (-1.52%), followed by the transportation sector (-1.01%). On the other hand, sectors that gained ground were led by the infrastructure sector (+2.94%), followed by the non-energy sector (+0.28%). The index weakened in line with other Asian markets, as investors monitored the escalating Middle East geopolitical tensions. The Rupiah closed lower at IDR15,720/USD. We estimate the IHSG will move within the price range of 6,874-6,920. Today's Recommendations: ADRO, ANTM, CPIN, SMGR.
Corporate Actions
Cum dividend: SMMT (IDR63/share)
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