Global Market Highlights
DJIA was down by -1.34% on Friday (14/10), followed by the S&P500 (-2.37%) and the Nasdaq (-3.08%). Wall Street was pressured as investors watched the release of Michigan 5Y Inflation Expectations Prel Oct-22 data which rose to 2.9% (vs 2.7% in the previous period), reflecting the potential for higher inflation in Oct-22. In addition, the Michigan Consumer Sentiment Prel Oct-22 recorded expansion to the level of 59.8 points, or is above the consensus level of 59 points. This further increased investors' concerns about the potential for aggressive monetary tightening of the Fed. Today, the market will be looking toward several data releases such as: 1) US NY Empire State Manufacturing Index Oct; 2) Japan Industrial Production YoY Final Aug; 3) Japan Tertiary Industry Index MoM Aug.
Domestic Update
• International trade projection Sep-22 MNCS, export +31.60% YoY; imports +40.12% YoY; trade balance surplus of USD4.387 billion. MNCS Comment: Export performance is still supported by persistently high global coal prices, while imports are supported by continued domestic economic recovery.
• Furthermore, the national Covid-19 daily rate had increased by 1,326 active cases (16/10).
Company News
1. PTPP IJ reported that the new contract value from the IKN development was worth IDR1.47 trillion. The new contract covers several projects including the central government area, toll roads and road construction (Kontan). MNCS Comment: With the total IKN development budget for phase 1 reaching IDR5.1 trillion, the contract value obtained by the company is equivalent to 29% of the total budget. Meanwhile, the total value of new contracts up to 9M22 reached IDR16.57 trillion or the realization reached 53.45% of the target in FY22E of IDR31 trillion. Currently, PTPP is traded at the level of 31.73x/0.50x PER/PBV.
2. CLEO IJ estimated revenue in 9M22 to reach IDR1 trillion (Market Bisnis). MNCS Comment: Therefore, the company's revenue in 9M22 has the potential to grow +24% YoY. Meanwhile, the company's revenue in 1H22 had grown by +23.75% YoY. We are optimistic that the company can achieve this target, supported by: 1) expansion of 3 new factories; 2) allocation of capex of IDR220 billion in FY22E. Currently, CLEO is traded at the level of 41.12x/7.74x PER/PBV.
3. TINS IJ alongside PLN, signed an agreement to add electricity supply to support the operation of its newest smelter, namely the Ausmelt Furnace, thus increasing power supply from 5.54 million VA to 8.67 million VA (Market Bisnis). MNCS Comment: The Ausmelt Furnace smelter is targeted to operate on Nov-22 with an estimated capacity of 40 thousand tons of crude tin per year, the investment value reaching USD 80 million. One of the advantages of the smelter is the process efficiency of 25-30%. It is hoped that the operation of the smelter will encourage the company's performance in the future. Currently, TINS is traded at 4.54x/1.39x PER/PBV.
IHSG Updates
JCI weakened by -0.96% to 6,814.53 on Friday (14/10), followed by net foreign sell which reached IDR426.29 billion. The majority of sectors weakened and weighed on the index's pace, led by the technology sector (-2.06%) followed by the infrastructure sector (-1.21%). On the other hand, the sectors that experienced strengthening were the industrial sector (+0.89%) followed by the property sector (+0.36%). The index underperformed with Asian markets and Wall Street. We see that investors tend to wait and see ahead of the release of trade balance data for Sep-22, where according to consensus estimates, the trade balance in Sep-22 remains in surplus even though it shrank to USD4.84 billion (vs USD5.76 billion realized in Aug-22). On the other hand, the Rupiah exchange rate closed lower at IDR15,423/USD. We estimate that the JCI will move in the price range of 6,750-6,950 pending the release of Balance of Trade Sep, Imports YoY Sep, and Exports YoY Sep data. Today's recommendation: BBTN, BUMI, ICBP, UNTR.
Corporate Actions
Cum Dividend: ASGR (IDR8/share)
RUPS: ABDA, ELSA
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