Global Market Highlights
DJIA was up by +1.86% on Monday (17/10), followed by the S&P500 (+2.65%) and the Nasdaq (+3.43%). Wall Street strengthened amid the release of NY Empire State Manufacturing Index Oct-22 data which contracted to -9.1 points (vs -1.5 points previously). The yield of US T-note 10Y which fell to 4.01% and the rally in banking stocks as earnings expectations were exceeded in 3Q22 were the drivers of the index's pace. Today, the market will be looking toward several data releases such as: 1) US Industrial Production YoY Sep; 2) US NAHB Housing Market Index Oct; 3) Germany ZEW Economic Sentiment Index Oct.
Domestic Update
• Indonesia's trade balance recorded a surplus for the 29 consecutive months with USD4.99 billion in Sep-22. However, this figure was lower than the previous period of USD5.76 billion. MNCS Comment: Export/import rose by +20.28% YoY/+22.02% YoY, lower than MNC forecast (+31.60%/+40.12% YoY) and consensus (+27.91% YoY) /+31.48% YoY). Looking ahead, we see that the trade balance surplus will continue until the end of the year. However, exports will tend to stabilize in line with the global economic slowdown and the decline in the prices of several commodities.
• Furthermore, the national Covid-19 daily rate had increased by 1,233 active cases (17/10).
Company News
1. INCO IJ recorded production of 17,513 metric tons of nickel in matte in 3Q22 (IQ Plus). MNCS Comment: Thus, total nickel production in 3Q22 on a quarterly basis was recorded rising by +39.36% QoQ (vs 12,567 metric tons of nickel in 2Q22), yet decreased by -3.39% YoY when compared to the achievement in 3Q21 with 18,127 metric tons . Meanwhile, nickel production in 9M22 fell by -9.23% YoY (vs 48,373 metric tons in 9M21). The decline in production was due to the redevelopment project of Furnace 4 in 1H22. However, we see that the completion of the redevelopment of Furnace 4 in 9M22 can push back the company's production. Currently, INCO is traded at the level of 14.55x/1.90x PER/PBV.
2. ARNA IJ recorded revenue growth in 9M22 of +6.24% YoY to IDR2.00 trillion (vs IDR1.89 trillion in 9M21). Meanwhile, net profit rose by +31.92% YoY to IDR458.36 billion (vs IDR347.45 billion in 9M21) (Market Bisnis). MNCS Comment: We see that the increase was supported by the growth of ASP, which was accompanied by sales volume and an increasingly solid product mix along with the expansion into the mid-high segment. Meanwhile, the increase in net profit was in line with the company's increasingly expansive margins, where the company's GPM and OPM recorded 41.09%/29.54%, respectively in 9M22 (vs 35.91%/23.57% in 9M21). ARNA is currently traded at the level of 10.63x/3.87x PER/PBV.
3. DMAS IJ recorded marketing sales of IDR1.33 trillion up to 9M22 (Emiten News). MNCS Comment: The company's marketing sales grew by +6.49% YoY (vs IDR1.25 trillion in 9M21). Meanwhile, with the marketing sales target in FY22E reaching IDR1.8 trillion, the realization up to 9M22 has reached 73.89%. Currently, DMAS is traded at the level of 6.06x/1.36x PER/PBV.
IHSG Updates
JCI strengthened by +0.24% to 6,831.12 on Monday (17/10), followed by net foreign buy which reached IDR2.37 trillion. A number of sectors experienced strengthening and boosted the index rate, led by the health sector (+0.95%) followed by the raw materials sector (+0.80%). On the other hand, the sectors that experienced weakness were the transportation sector (-1.91%) followed by the property sector (-1.31%). The index strengthened as investors watched the release of Indonesia's trade balance data in Sep-22 which recorded a surplus of USD4.99 billion. This achievement also marks a trade balance surplus for 29 consecutive months. On the other hand, the Rupiah exchange rate closed lower at IDR15,488/USD. We estimate that the JCI will move in the price range of 6,800-6,930. Today's recommendation: ADMR, BBCA, BRMS, SRTG.
Corporate Actions
RUPS: AMOR, BBTN, PRDA
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