MNCS Morning Navigator

20 November 2023

MNCS Morning Navigator November 20, 2023

Global Market Highlights
The DJIA closed flat at +0.01% on Friday (17/11), while S&P500 (+0.13%) and Nasdaq (+0.08%). Wall Street showed relative strength, with investors focusing on the release of preliminary building permits data in Oct-2023, recording 1.49 million units, up +1.1% MoM (vs the consensus of 1.45 million units). Additionally, the relatively flat UST yield at 4.44% also contributed to the index's momentum. Today, the market will be looking toward several data releases such as: 1) China Loan Prime Rate 5Y Nov-23; 2) Germany PPI MoM Oct-23; 3) US CB Leading Index MoM Oct-23.

Domestic Update
Bank Indonesia (BI) reported that based on transactions from November 13 - 16, 2023, non-residents in the domestic financial market recorded a net buy of IDR7.33 trillion (net buy of IDR2.49 trillion in the SBN, net buy of IDR870 billion in the stock market, and net buy of IDR3.97 trillion in the SRBI). MNCS Comment: We view this inflow as indicative of investor optimism about the end of The Fed's benchmark interest rate hike era, supported by the easing of US inflation data in Oct-2023 and dovish statements from several Fed officials. With BI's expectation to maintain the BI7DRR at 6.0% until the end of this year, we anticipate that the ongoing inflow can drive the index and strengthen the Rupiah.

Company News
1. NCKL IJ opens the opportunity to export nickel sulfate to battery-producing countries such as Korea and Japan (Emiten News). MNCS Comment: We view this export potential positively as it can increase the company's client base abroad, supported by the continuously rising demand for EVs. The addition to the export portfolio is expected to boost the company's performance in the future. Currently, NCKL is traded at a level of 12.47x/3.43x PER/PBV.
2. CLEO IJ targets double-digit growth above the industry average in 2024 (Market Bisnis). MNCS Comment: In 9M23, CLEO recorded revenue growth of +13.6% YoY and net profit growth of +35.7% YoY. With the increase in production capacity from 5 billion liters to 5.5 liters for 2024, along with distribution expansion, we are optimistic that the company can achieve this target. Currently, CLEO is traded at a level of 28.78x/5.73x PER/PBV.
3. ADHI IJ reported a new contract value of IDR30.3 trillion until 10M23 (Kontan). MNCS Comment: We note that the new contract value grew +58.6% YoY (vs IDR19.1 trillion in 10M22). With the FY23E new contract value target of IDR27 trillion, the realization until 10M23 reached 112.2%, or exceeding the target. We see this increase was propelled by solid balance sheet and more prudent debt management. Currently, ADHI is traded at a level of 0.41x PBV.

IHSG Updates
The JCI rose by +0.28% at 6,977.67 on Friday (17/11), followed by a net foreign sell of IDR157 billion. Several sectors experienced gains and leading the index, led by the infrastructure sector (+4.34%), followed by the basic materials (+0.94%). On the other hand, sectors experiencing losses were led by the technology sector (-0.95%), followed by the industrial sector (-0.83%). The index strengthened amid mixed performance in Asian markets, reflecting investor optimism ahead of China's loan interest rate announcement in Nov-2023, which is anticipated to remain steady to encourage global economic growth. The Rupiah closed higher at IDR15,493/USD. We estimate the IHSG will move within the price range of 6,950-7,000. Today's Recommendations: BRPT, KLBF, MIKA, PTPP.

Corporate Actions
Cum Dividend : MCOL (IDR250/share), TGKA (IDR30/share)

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