Global Market Highlights
DJIA was down by -0.32% on Monday (10/10), followed by the S&P500 (-0.75%) and the Nasdaq (-1.04%). Wall Street was pressured from the falling of semiconductor stocks after the US government plans to impose restrictions on China against US technology companies. In addition, investors were also closely watching the consensus estimate on core inflation in Sep-22, where the consensus estimates core inflation to rise +6.5% YoY, or higher than the realization in Aug-22 of 6.3% YoY. Today, the market will be looking toward several data releases such as: 1) US Fed Harker Speech; 2) UK Unemployment Rate Aug; 3) UK Average Earnings incl. Bonus (3Mo/Yr) Aug.
Domestic Update
• The September 2022 Consumer Confidence Index (IKK) fell 7.5 points to 117.2. MNCS Comment: The decline in FX reserves position was driven by external debt payment and IDR stabilization. Fx reserves position is currently equal to 5.9 months of imports.
• Furthermore, the national Covid-19 daily rate had increased by 1,195 active cases (10/10).
Company News
1. MDKA IJ reported that exploration costs in 3Q22 reached IDR301.6 billion. Specifically, IDR184.6 billion was used for activities in Tujuh Bukit, IDR40.58 billion for the Wetar project and the remaining IDR76.41 billion was used for the Pani project (Emiten News). MNCS Comment: We see that the use of exploration costs in 3Q22 increased by +170.73% YoY (vs IDR111.40 billion in 3Q21). It is hoped that through the increase in exploration costs, it can bring maximum output. Currently, MDKA is traded at the level of 31.35x/5.88x PER/PBV.
2. INCO IJ reported exploration costs in Sep-22 amounting to USD905.73. The exploration area includes areas in the Sorowako Block, Sorowako Outer, Bahodopi and Pomala Block (Emiten News). MNCS Comment: It is hoped that this exploration will boost the company's production volume, where in 1H22, the production volume of nickel in matte (t) was recorded at 26,394, lower by -12.74% YoY from 1H21. Currently, INCO is traded at the level of 31.70x/2.06x PER/PBV.
3. BRMS IJ has completed the construction of its second gold plant in Palu. The capacity of the second plant in 4Q22 will be 200-500 tons of ore per day, followed by an increase to 4,000 tons of ore per day in the early 2Q23 (Emiten News). MNCS Comment: With the company's first factory capacity of 500 ores per day, the total capacity will be totalled to 4,500 ores per day. The increase in capacity is also in line with the increase in new mineral resources at the CPM entity, bringing the total resources to 21.7 million tons (vs 17.8 million tons previously). Currently, BRMS is traded at the level of 216.86x/1.33x PER/PBV.
IHSG Updates
JCI closed down by -0.46% to 6,994.39 on Monday (10/10), followed by net foreign sell which reached IDR721.77 billion. The majority of sectors weakened and weighed on the index, led by the energy sector (-1.91%) followed by the industrial sector (-1.23%). On the other hand, the sectors that experienced strengthening were the health sector (+1.08%) followed by the non-cyclical sector (+0.36%). The index was depressed as investors watched solid US employment market data, raising concerns among market participants about the Fed's aggressive monetary tightening. In addition, investors were watching the IKK in Sep-22 at the level of 117.2 points, or lower than Aug-22 at the level of 124.7 points. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,240/USD. We estimate that the JCI will move in the price range of 6,970-7,070 pending the release of Retail Sales YoY Sep data. Today's recommendation: AGII, CPIN, LPPF, WMPP.
Corporate Actions
Cum Dividend: ASII (IDR88/share), AALI (IDR85/share), SSMS (IDR74.64/share)
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