MNCS Morning Navigator

17 November 2022

MNCS Morning Navigator November 17, 2022

Global Market Highlights
DJIA was down -0.12% on Wednesday (16/11), followed by the S&P500 (-0.83%) and the Nasdaq (-1.54%). Wall Street corrected amid the release of retail sales data on Oct-2022 which grew +1.3% MoM, or exceeded consensus at +1% MoM. We see investors tend to wait and see ahead of the release of Housing Starts data in Oct-2022 which is expected to fall to 1.41 million according to consensus (vs 1.44 million in Sep-2022 realization). Today, the market will be looking toward several data releases such as: 1) US Building Permits Prel Oct; 2) US Initial Jobless Claims Nov; 3) UK Autumn Statement.

Domestic Update
• Bank Indonesia (BI) will announce the decision on the BI7DRRR Nov-2022 benchmark interest rate today after the RDG 16-17 November 2022. MNCS Comment: We estimate Bank Indonesia will increase BI7DRRR +25 bps as a step to anchor inflation and maintain spread with FFR.
• Furthermore, the national Covid-19 daily rate had increased by 8,486 active cases (16/11).

Company News
1. BBRI IJ recorded a consolidated net profit growth of +103.34% YoY to IDR39.16 trillion (vs IDR19.26 trillion in 9M21) (IQ Plus). MNCS Comment: The increase in net profit was supported by: 1) lending and consolidated financing (+7.9% YoY); 2) increase in consolidated NIM to 8.21% (vs 7.38% in 9M21). BBRI is currently traded at the level of 2.31x PBV.
2. ITMG IJ targets a sales volume of 19-19.5 million tons of coal and a net revenue of USD2.6 billion in FY22E (Emiten News). MNCS Comment: As of 9M22, ITMG's revenue reached USD2.6 billion, or has grown +97.71% YoY. Meanwhile, the sales volume up to 9M22 was 13.8 million tons, or the realization has reached 72.6% of the FY22E target. Currently, ITMG is traded at 2.36x/1.45x PER/PBV levels.
3. ANTM IJ along with CNGR Hong Kong Material Science & Technology signed the Framework Agreement, as a continuation of the previous Head of Agreement agreement on 5-Aug'2022 for the construction and development of the nickel ore downstream industrial area (Investor ID). MNCS Comment: CNGR is one of the largest precursor producers in the world. With the continuation of the agreement, it will further strengthen the milestones in developing the nickel downstream industry, especially for the production of battery raw materials. CNGR's installed production capacity is 80,000 tons of nickel. ANTM is currently traded at the level of 15.98x/2.27x PBV.

IHSG Updates
JCI weakened -0.30% to 7,014.39 on Wednesday (16/11), followed by net foreign sell which reached IDR1.33 trillion. The majority of sectors weakened and weighed on the index, led by the raw materials sector (-1.85%) and followed by the infrastructure sector (-1.28%). On the other hand, the sectors that experienced strengthening were the technology sector (+1.28%) followed by the non-cyclical sector (+0.12%). The index weakened amid the strengthening of Wall Street and some Asian bourses. We see investors tend to wait and see ahead of the release of the BI benchmark interest rate data (BI7DRRR) and observe the release of China's House Price Index data in Oct-2022 which continued its correction of -1.6% YoY, thus raising concerns regarding the crisis in the Chinese property market. On the other hand, the Rupiah exchange rate closed lower at IDR15,603/USD. We estimate that the JCI will move in the price range of 7,000-7,050 pending the Interest Rate Decision and the release of Lending Facility Rate Nov and Deposit Facility Rate Nov data. Today's recommendation: BBRI, INDF, PTBA, SMGR.

Corporate Actions
Cum Dividend: CSRA (IDR25/share)

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