Global Market Highlights
DJIA strengthened by +2.59% on Friday (28/10), followed by the S&P500 (+2.46%) and the Nasdaq (+2.87%). Wall Street strengthened amid the release of Michigan Inflation Expectations Final Oct-22 data which rose to 5% (vs 4.7% in Sep-2022). Investors tend to respond positively to the release of Personal Income Sep-22 data which rose by +0.4% MoM or exceeded the consensus at +0.3% MoM. In addition, Michigan Consumer Sentiment Final in Oct-22 expanded to 59.9 points, an increase from Sep-22 and consensus at 58.6/59.8 points, respectively. Today, the market will be looking toward several data releases such as: 1) UK Nationwide Housing Prices YoY Oct; 2) Germany Retail Sales YoY Sep; 3) Japan Consumer Confidence Oct.
Domestic Update
• Based on transaction data from October 24 to 27, 2022, BI reported the non-residents in the domestic financial market to record a net purchase of IDR3.02 trillion, consisting of a net purchase of IDR210 billion in the SBN market and a net purchase of IDR2.81 trillion in the stock market. MNCS Comment: The inflow of foreign funds into the Indonesian financial market during the past week has also increased domestic asset prices. However, we expect the inflow to be temporary.
• Furthermore, the national Covid-19 daily rate had increased by 2,717 active cases (30/10).
Company News
1. INCO IJ posted revenue growth in 9M22 of +27.29% YoY to USD873.78 million (vs USD686.43 million in 9M21). Meanwhile, net profit grew by +36.97% YoY to USD168.39 million (vs USD122.94 million in 9M21) (IQ Plus). MNCS Comment: The increase in revenue was supported by the increase in the average realized nickel price of +41% YoY. The increase in average realized prices was also able to offset the increase in the cost of commodities such as diesel (+58.80% YoY) and coal (+162.04% YoY). The company's margins were expansive and supported the increase in net profit, where GPM and OPM in 9M22 were recorded at 29.65%/27.11%, respectively (vs 24.71%/23.52% in 9M21). Currently, INCO is traded at the level of 18.89x/1.83x PER/PBV.
2. AALI IJ posted an -8.31% YoY decline in revenue in 9M22 to IDR16.52 trillion (vs IDR18.01 trillion in 9M21). Meanwhile, net profit fell by -17.24% YoY to IDR1.22 trillion (vs IDR1.47 trillion in 9M21) (IQ Plus). MNCS Comment: The lower revenue was driven from the contraction of CPO production by -13.68% YoY and FFB by -5.84% YoY. Meanwhile, the decline in production was triggered by the continued decline in crop productivity caused by the long dry season in FY19. Net profit fell as operating expenses increased by +9.73% YoY and lowered operating profit by -39.03% YoY. AALI is currently traded at the level of 10.03x/0.77x PER/PBV.
3. SIDO IJ will distribute interim cash dividends of IDR450 billion, or equivalent to IDR13.5 per share for the FY22 financial year (IQ Plus). MNCS Comment: We estimate SIDO to offer a dividend yield of 1.82%. Currently, SIDO is traded at the level of 23.11x/6.30x PER/PBV.
IHSG Updates
JCI weakened -0.50% to 7,056.04 on Friday (28/10), followed by net foreign buy which reached IDR1.46 trillion. The majority of sectors experienced weakness and slowed the pace of the index, led by the technology sector (-2.15%) and followed by the non-cyclical sector (-1.29%). On the other hand, the sectors that experienced strengthening were the transportation & logistics sector (+1.03%) followed by the health sector (+0.12%). The weakening of Asian markets also weighed on the JCI performance, where investors were watching the stance of the Japanese Central Bank (BoJ) which held its benchmark interest rate at -0.1% amidst the increase in the Oct-22 inflation rate of 3.5% YoY, the highest in the last 40 years. On the other hand, the Rupiah exchange rate closed higher at IDR15,552/USD. We estimate that the JCI will move in the price range of 7,000-7,130. Today's recommendation: BBRI, DMAS, INDF, TBIG.
Corporate Actions
RUPS: BNBA, AMAR, ELTY
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