Global Market Highlights
The DJIA weakened -0.75% on Thursday (19/10), followed by S&P500 (-1.85%) and Nasdaq (-0.96%). Wall Street experienced another decline, with investors reacting negatively to the rise in the UST 10Y yield to 4.98%. Additionally, the unexpected drop in initial jobless claims to 198k as of October 14 (vs consensus of 212k) indicated a labor market that remains relatively robust, raising concerns of a potential hawkish stance from The Fed in the future. Today, the market will be looking toward several data releases such as: 1) Japan Inflation Rate YoY Sep-23; 2) UK Retail Sales MoM Sep-23; 3) Germany Producer Price Index MoM Sep-23.
Domestic Update
Bank Indonesia (BI) unexpectedly raised the BI7DRR by +25 bps to 6.00%, followed by the deposit facility to 5.25% and the lending facility to 6.75%. MNCS Comment: We note that the increase in interest rates is in response to the narrowing interest rate differential between BI7DRR and the U.S. Federal Funds Rate (FFR), with lingering potential for hawkish sentiment due to the relatively strong US economic growth. This phenomenon is accompanied by the ongoing outflow of foreign ownership of government bonds, as the spread between UST 10Y and Indo GB 10Y continues to shrink.
Company News
1. BBCA IJ reported a +25.8% YoY increase in net profit to IDR36.4 trillion in 9M23 (Emiten News). MNCS Comment: The increase in net profit was primarily supported by a +21.3% YoY increase in Net Interest Income (NII) and a decrease in provision expenses. Additionally, Net Interest Margin (NIM) increased by +40 bps to 5.5% (vs 5.1% in 9M23). Meanwhile, Non-Performing Loans (NPL) increased slightly by +10 bps to 2.0% in 9M23 (vs 1.9% in 1H23). Currently, BBCA is traded at a level of 4.58x PBV.
2. CTRA IJ achieved marketing sales of IDR7.8 trillion in 9M23 (Market Bisnis). MNCS Comment: Marketing sales grew by +19.0% YoY (vs IDR6.6 trillion in 9M22). It is noted that IDR4.3 trillion of marketing sales came from the sale of 2,588 new units such as CitraGarden Serpong and CitraLand Surabaya. With a marketing sales target of IDR9.8 trillion in FY23E, the realization as of 9M23 is 79.5%. Currently, CTRA is traded at a level of 11.90x/0.98x PER/PBV.
3. ENAK IJ plans to expand with 2 additional Monsieur Spoon branches in Bogor and Makassar (Emiten News). MNCS Comment: We view the company's expansion efforts positively, which have the potential to increase the number of Monsieur Spoon outlets to 20. With the addition of these outlets, it is expected to improve the company's performance moving forward. Currently, ENAK is traded at a level of 46,56x/10.28x PER/PBV.
IHSG Updates
The JCI weakened by -1.18% to 6,846.43 on Thursday (19/10), followed by a net foreign sell of IDR1.05 trillion. Most sectors experienced a decline and weighed on the index, led by the transportation sector (-3.04%), followed by the basic materials sector (-1.98%). On the other hand, sectors that saw gains were led by infrastructure (+1.34%), followed by healthcare (+0.60%). The index's decline aligned with the broader Asian markets as investors engaged in a sell-off due to rising global bond yields putting pressure on the stock market. Additionally, investors were closely monitoring Bank Indonesia's decision to raise the BI7DRR by +25 bps to 6.00%. The Rupiah closed lower at IDR15,815/USD. We estimate the IHSG will move within the price range of 6,830-6,887. Today's Recommendations: KLBF, PTRO, UNIQ, WIIM.
Corporate Actions
EGMS: MBMA, SOSS
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