Global Market Highlights
The DJIA strengthened by +0.47% on Wednesday (15/11), followed by S&P500 (+0.16%) and Nasdaq (+0.07%). Wall Street continued its upward trend, supported by expectations of a dovish stance from The Fed following the release of inflation data in Oct-2023, which came in below consensus estimates. Investors also responded positively to the release of producer price data in Oct-2023, which experienced deflation of -0.5% MoM (vs +0.1% MoM in the consensus). Today, the market will be looking toward several data releases such as: 1) Japan Balance of Trade Oct-23; 2) China House Price Index YoY Oct-23; 3) US Initial Jobless Claims 11-Nov.
Domestic Update
BPS reported Indonesia's trade balance performance in Oct-2023, recording a surplus of USD3.48 billion. MNCS Comment: This figure exceeded the consensus estimate of USD3.0 billion and the Sep-2023 realization of USD3.41 billion. The surplus in the trade balance in Oct-2023 was supported by export performance, rebounding +6.76% MoM to USD22.15 billion, amid a +7.68% MoM increase in imports to USD18.67 billion. We view the consistently positive performance of the trade balance in Oct-2023 as a buffer for GDP in 4Q23. However, we note that the increase in oil imports ahead of the festive season at the end of FY23E could pose a downside risk to Indonesia's trade balance performance.
Company News
1. TPMA IJ expanded its operations by purchasing 79 units of used tugboats and barges, with a budget allocation of IDR1.2 trillion. Additionally, TPMA also ordered 30 new tugboats and barges expected to be realized in FY24F (Market Bisnis). MNCS Comment: We view the company's expansion to increase the number of tugboat fleets positively, enhancing the company's value in the future. We see TPMA striving to seize the momentum of the ongoing downstreaming of the industry, where scattered smelter construction and increased exploration by mining companies will undoubtedly require a fleet of ships for cargo mobility. It is expected that through this expansion, the company's performance can be driven forward. Currently, TPMA is traded at a level of 6.43x/1.24x PER/PBV.
2. BIPI IJ achieved coal production of 4.4 million tons until 3Q23 (Market Bisnis). MNCS Comment: With a production target of 6.0 million tons of coal, the realization until 3Q23 reached 73.3%. We also note that the stripping ratio until 9M23 was maintained at 13.4x (vs. 13.0 in 9M22). With global coal prices and stable DMO at ~USD120/MT, we expect this to support BIPI's performance, coupled with a +9.1% YoY increase in coal logistics achievement in 9M23. Currently, BIPI is traded at a level of 9.57x/0.87x PER/PBV.
3. AUTO IJ is actively strengthening the production of EV components as the company's main focus, supported by R&D development and collaborations with various company-owned partners (Market Bisnis). MNCS Comment: We view the company's aggressive efforts to develop EV components as a strengthening move to its position and market share in the automotive industry. This opens a new footprint for the company in the EV industry, which we expect to drive the company's performance forward. This will be supported by a capex allocation of IDR500 billion in FY23E, as well as a cash allocation of IDR3.3 trillion in 9M23 (+59.3% YTD). Currently, AUTO is traded at a level of 7.14x/0.97x PER/PBV.
IHSG Updates
The JCI strengthened by +1.40% to 6,958.21 on Wednesday (15/11), followed by a net foreign buy of IDR681.32 billion. Almost all sectors experienced gains and driving the index, led by the infrastructure sector (+3.60%), followed by the technology sector (+2.47%). On the other hand, the sector that experienced a decline was the healthcare sector (-0.49%). The index strengthened alongside other Asian markets, whereas investors responded positively to the performance of Indonesia's trade balance in Oct-2023. Additionally, the release of China's retail sales data in Oct-2023, which grew by +7.6% YoY (vs +7.0% YoY in the consensus), also acted as a positive catalyst. The Rupiah closed higher at IDR15,695/USD. We estimate the IHSG will move within the price range of 6,893-6,900. Today's Recommendations: AKRA, HEAL, MAPA, UNTR.
Corporate Actions
AGMS : AMOR
EGMS : CMPP
Cum Dividend : CPIN (IDR100/share)
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