Global Market Highlights
The DJIA weakened by -0.32% on Wednesday (25/10), followed by S&P500 (+0.73%) and Nasdaq (+0.93%). Wall Street contracted as the UST 10Y yield increased to 4.95%. This surge was driven by the release of solid data on new home sales in Sep-2023, which reached 759k, surpassing the consensus estimate of 680k. This has raised concerns among market participants about potential Fed hawkishness in the future. Today, the market will be looking toward several data releases such as: 1) EU ECB Interest Rate Decision; 2) US GDP Growth Rate Adv Q3; 3) US Goods Trade Balance Adv Sep-23.
Domestic Update
The government has reinstated VAT incentives for home purchases with a maximum price of IDR2 billion. A 100% incentive will be given from November 2023 - June 2024, followed by a 50% incentive from July - December 2024. MNCS Comment: We view this as a positive step by the government, which is expected to benefit the property industry. We anticipate that these incentives can help maintain consumer buying power for property purchases, especially as a buffer for marketing sales, which typically decline in the lead-up to elections year.
Company News
1. BBRI IJ reported consolidated net profit growth of +12.4% YoY to IDR44.0 trillion in 9M23 (vs IDR39.2 trillion in 9M22) (Emiten News). MNCS Comment: The increase in net profit is supported by a +12.5% YoY growth in credit and financing. PPOP grew by +10.9% YoY. Meanwhile, NIM was recorded at 8.05%, exceeding management's target of 7.7%-7.9%. NPL increased slightly to 3.07% (vs 2.6%-2.8% in the guidance). Currently, BBRI is traded at a level of 2.56x PBV.
2. UNVR IJ recorded a -9.2% YoY decrease in net profit to IDR4.2 trillion in 9M23 (vs IDR4.6 trillion in 9M22) (Kontan). MNCS Comment: The decrease in net profit is in line with a -3.3% YoY decrease in revenue to IDR30.5 trillion (vs IDR31.5 trillion in 9M22), coupled with a +10.0% YoY increase in OPEX. However, GPM has recovered, rising to 50.1% (vs 47.4% in 9M22) due to the normalization of commodity prices. Currently, UNVR is traded at a level of 27.87x/28.93x PER/PBV.
3. AKRA IJ will distribute an interim dividend of IDR493.4 billion, equivalent to IDR25 per share (Emiten News). MNCS Comment: As a result, we estimate that the second interim dividend will offer a dividend yield of 1.7%. With a net profit of IDR1.7 trillion in 9M23, the total payout ratio (including the first interim dividend) is 86.6%. Currently, AKRA is traded at a level of 12.68x/2.70x PER/PBV.
IHSG Updates
The JCI strengthened by +0.41% to reach 6,834.39 on Wednesday (25/10), followed by a net foreign sell of IDR243.85 billion. Several sectors saw gains and drove the index, led by the financial sector (+1.18%) and followed by the transportation and logistics sector (+1.01%). On the other hand, sector that weakened were led by the technology sector (-1.80%) and followed by the healthcare sector (-1.21%). The index strengthened in line with most other Asian markets, whereas investors responded positively to positive earnings results in 9M23. In addition, the release of Australian inflation data in 3Q23, which slowed to +5.4% YoY (vs +6.0% YoY in the previous quarter), also contributed positively. The Rupiah closed lower at IDR15,870/USD. We estimate the IHSG will move within the price range of 6,808-6,850. Today's Recommendations: AMRT, ELSA, GGRM, JSMR.
Corporate Actions
EGMS: DNET
Cum Dividend: BOBA (IDR2/share), KMDS (IDR15/share)
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