Global Market Highlights
The DJIA weakened by -0.41% on Tuesday (01/10), followed by the S&P 500 (-0.93%) and Nasdaq (-1.53%). Wall Street came under pressure amid rising geopolitical tensions in the Middle East. Additionally, the market responded to the release of ISM PMI Manufacturing data for Sep-2024, which remained flat at 47.2, or below the consensus estimate of 47.5. Today the market will be looking forward to several data releases such as: 1) US ADP Employment Change Sep-2024; 2) Japan Consumer Confidence Sep-2024; 3) South Korea PMI Manufacturing Sep-2024.
Domestic Update
BPS reported annual inflation of +1.84% YoY in Sep-2024, or a deflation of -0.12% MoM. Meanwhile, core inflation was recorded at +2.09% YoY/+0.16% MoM. MNCS Comment: We noted that in terms of expenditure categories, the food, beverages, and tobacco segment remained the largest contributor to deflation, at -0.59% MoM. Furthermore, gasoline and diesel experienced deflation of -0.72% MoM and -0.74% MoM, respectively. We estimate inflation will rise moderately this year to +2.2% YoY, driven by the regional election campaigns and increased demand during Christmas and New Year. Low inflation, along with the Rupiah’s continued strengthening, provides room for BI to implement a 25 bps rate cut during this month’s Board of Governors Meeting (RDG).
Company News
1. MBMA IJ reported a significant increase in net profit to USD20.4 million (+203.7% YoY), marking a turnaround in 1H24. MNCS Comment: This rise was attributed to a +162.6% YoY increase in revenue to USD921.6 million (vs. USD351.0 million in 1H23), driven by the growth in all business segments. Additionally, G&A expenses declined by -31.5% YoY, expanding operating profit by +5274.1% YoY to USD49.4 million (vs. USD0.9 million in 1H23), with OPM growing to 5.4% in 1H24 (vs. 0.3% in 1H23). Furthermore, finance income grew by +64.3% YoY and finance cost shrank by -80.4% YoY. As a result, NPM increased from -5.6% to 2.2% in 1H24. MBMA is currently trading at 2.51x PBV.
2. PTRO IJ has allocated capex of IDR6.0 trillion for new equipment and business expansion. MNCS Comment: The allocated capex will be used to invest in new mining equipment, which is expected to enhance the company’s operational efficiency. Additionally, the company has started First Cut Operations (FCO) for several mining projects in Kalimantan Tengah, which are expected to support the company’s future performance and long-term growth. PTRO is currently trading at 3.67x PBV.
3. MDKA IJ posted a net loss of USD12.9 million in 1H24. MNCS Comment: We note that net loss in 1H24 is lower than previous year (vs. net loss USD47.7 million in 1H23) due to a spike in revenue of +109.6% YoY reaching USD1.1 billion (vs. USD520 million in 1H23) and other revenue grew by +137% YoY to USD11.2 million in 1H24. Additionally, G&A expenses declined by -4.3% YoY. MDKA is currently trading at 4.17x PBV.
IHSG Updates
The JCI rebounded by +1.52% to 7,642.13 on Tuesday (01/10), with a net foreign buy of IDR509.41 billion. Almost all sectors strengthened, led by energy (+2.50%) and basic materials (+2.19%), while healthcare remained flat (-0.02%). The index, along with other Asian markets, gained as Japan's economic indicators largely met expectations. The unemployment rate in Aug-2024 eased to 2.5% (vs 2.7%/2.6% prev/cons), while the Jibun Bank manufacturing PMI final for Sep-2024 held steady at 49.7bps (vs 49.8bps/49.6bps prev/cons). Investors also reacted positively to the domestic core inflation rate for Sep-2024, which rose to 2.09% from 2.02% previously. The Rupiah closed lower at IDR15,140/USD. We estimate that the JCI will move in the price range of 7,579-7,652. Today's recommendations: BULL, GOTO, PANI, SMGR.
Corporate Actions
EGMS: DGNS
Cum Dividend: HEXA (USD0.046/Share)
Disclaimer On
