Global Market Highlights
The DJIA gained +0.04% on Tuesday (17/10), while S&P500 (-0.01%) and Nasdaq (-0.25%). Wall Street closed mixed as UST 10Y yields rose to 4.83%. The increase in yields reflects investor concerns regarding the potential hawkish stance of The Fed in light of the Sep-2023 retail sales data, which grew by +0.7% MoM, or exceeding the consensus of +0.3% MoM. Today, the market will be looking toward several data releases such as: 1) China GDP Growth Rate YoY Q3; 2) UK Inflation Rate YoY Sep-23; 3) China Retail Sales YoY Sep-23.
Domestic Update
Sales of landed houses are projected to remain stagnant in the run-up to the political year in FY24F as investors adopt a wait and see approach. MNCS Comment: Through backtesting, the marketing sales realization remained relatively flat in political years FY14 and FY19. We anticipate a similar trend ahead, given the flat marketing sales targets of companies in our coverage. Another factor is the rise in mortgage rates, which inhibits buying power. However, we expect the political year to have a positive impact on MICE activities, potentially driving recurring income.
Company News
1. PANI IJ reported marketing sales achievements of IDR1.7 trillion in 9M23 (Emiten News). MNCS Comment: With a FY23E marketing sales target of IDR2.1 trillion, the realization reached 81.0% in 9M23. We believe that the company can achieve this target, driven by the landlots, shophouses, and residential property segments. Currently, PANI is traded at a level of 26.04x PBV.
2. INCO IJ reported nickel matte production of 51,644 tons in 9M23 (Market Bisnis). MNCS Comment: We noted that nickel matte production grew by +17.6% YoY (vs 43,907 tons in 9M22). With a production target of 70,000 tons in FY23E, the realization reached 73.8% in 9M23. We believe that the company can achieve this target, supported by the recovery of Furnace 4's operations. Currently, INCO is traded at a level of 11.10x/1.52x PER/PBV.
3. ASII IJ reported a total 4W sales of 421,409 units in 9M23 (Investor ID). MNCS Comment: 4W unit sales grew by +1.9% YoY (vs 413,464 units in 9M22). With domestic wholesale sales reaching 755,173 units in 9M23, ASII holds a market share of 55.8%. Currently, ASII is traded at a level of 6.79x/1.27x PER/PBV.
IHSG Updates
The JCI strengthened by +0.63% to 6,939.62 on Tuesday (17/10), followed by a net foreign sell of IDR323.43 billion. Most sectors experienced gains and drove the index, led by the infrastructure sector (+7.54%) followed by the non-cyclical sector (+1.39%). On the other hand, sectors that saw declines were led by the cyclical sector (-0.47%), followed by the technology sector (-0.35%). The index rebounded following the movement of other Asian markets. Investors are once again looking for positive catalysts stemming from the easing of Middle East geopolitical tensions, as well as taking a wait and see approach to global macroeconomic data releases this week. The Rupiah closed higher at IDR15,715/USD. We estimate the IHSG will move within the price range of 6,874-6,960. Today's Recommendations: ADMR, ENRG, INCO, CARS.
Corporate Actions
EGMS: ARNA, PNGO
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