Global Market Highlights
The DJIA weakened by -0.58% on Monday (23/10), followed by S&P500 (-0.17%), while Nasdaq (+0.27%). Wall Street closed mixed, influenced by the pullback in UST 10Y yield from 5.02% to 4.84%. Additionally, investors were monitoring the release of the Chicago Fed National Activity Index for Sep-2023, which rebounded to a positive level of 0.02 (vs -0.22 previously). Today, the market will be looking toward several data releases such as: 1) South Korea PPI MoM Sep-23; 2) Germany Gfk Consumer Confidence Nov-23; 3) US S&P PMI Manufacturing Flash Oct-23.
Domestic Update
Bank Indonesia (BI) reported that new loan disbursements in 3Q23 showed signs of an increase, with the Weighted Net Balance (WNB) of new loans at 95.4% (vs 94.0% in 2Q23). MNCS Comment: We are optimistic that credit growth can reach 9%-11% YoY in FY23E, partly supported by the ample banking liquidity. Furthermore, we view the solid domestic economy and BI's macroprudential policies as factors that will boost domestic credit growth.
Company News
1. ARNA IJ recorded a -23.1% YoY decrease in net profit to IDR352.7 billion in 9M23 (vs IDR458.4 billion in 9M22) (Market Bisnis). MNCS Comment: The decline in net profit aligns with an -8.1% YoY drop in revenue to IDR1.8 trillion (vs IDR 2.0 trillion in 9M22). We attribute this to weak demand across the entire building materials industry, particularly at the end of last year. Contraction also occurred in the margins, with GPM/OPM at 37.6%/19.1% (vs 41.0%/22.9% in 9M22). Currently, ARNA is traded at a level of 10.54x/2.82x PER/PBV.
2. SIDO IJ will distribute interim dividends for the FY23E book year totaling IDR378 billion, or equivalent to IDR12.6 per share (Emiten News). MNCS Comment: we estimate a dividend yield of 2.2%. With net profit for 1H23 at IDR448.1 billion, the payout ratio reaches 84.4%. Currently, SIDO is traded at a level of 19.08x/5.24x PER/PBV.
3. HMSP IJ recorded sales volume of 63.1 billion sticks in 9M23 (Market Bisnis). MNCS Comment: HMSP's sales volume in 9M23 decreased by -3.8% YoY (vs 65.6 billion sticks in 9M22). However, this decline is more moderate compared to the industry's -5.0% YoY drop to 219.1 billion sticks in 9M23 (vs 230.6 billion sticks in 9M22). As a result, HMSP's cumulative market share in 9M23 increased to 28.8% (vs 28.4% in 9M22). Currently, HMSP is traded at a level of 13.26x/3.90x PER/PBV.
IHSG Updates
The JCI weakened by -1.57% to 6,741.96 on Monday (23/10), followed by a net foreign sell of IDR592.73 billion. Most sectors experienced declines and weighed on the index, led by the infrastructure sector (-3.27%), followed by the energy sector (-2.63%). On the other hand, the technology sector showed gains (+0.49%). The index declined in line with other Asian markets. Negative sentiment stemmed from UST 10Y yield rising to its highest level since 2007, reaching 5.02%. Additionally, speculation that the BoJ would move away from negative interest rates also weighed on the index. The Rupiah closed lower at IDR15,935/USD. We estimate the IHSG will move within the price range of 6,724-6,800. Today's Recommendations: BMRI, ERAA, MEDC, TBIG.
Corporate Actions
EGMS: LUCY
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