Global Market Highlights
DJIA weakened by -0.33% on Wednesday (19/10), followed by the S&P500 (-0.67%) and the Nasdaq (-0.85%). Wall Street was under pressure as the yield on the US T-note 10Y rose to 4.12% driven from the continued rising of UK’s inflation. In addition, investors were also watching the release of Housing Starts data for Sep-22 which was recorded at 1.44 million or below the consensus estimate of 1.47 million. Today, the market will be looking toward several data releases such as: 1) US CB Leading Index MoM Sep; 2) US Continuing Jobless Claims; 3) US Philadelphia Fed Manufacturing Index Oct.
Domestic Update
• Bank Indonesia (BI) will announce the BI7DRRR benchmark interest rate decision today. MNCS Comment: We estimate BI will raise the benchmark interest rate +50 bps to 4.75% to maintain the movement of the rupiah exchange rate and anchor the inflation rate.
• Furthermore, the national Covid-19 daily rate had increased by 2,390 active cases (19/10).
Company News
1. WIKA IJ recorded a new contract value of IDR19 trillion up to 9M22. The majority of new contracts come from infrastructure, Engineering, Procurement, EPCC and building projects (Market Bisnis). MNCS Comment: Achievement of new contract value grew by +44.28% YoY (vs IDR13.17 trillion in 9M21). Meanwhile, with the target of achieving new contract values in FY22E reaching IDR39 trillion, the realization up to 9M22 was recorded at 48.72%. WIKA is currently traded at the level of 0.61x PBV.
2. WTON IJ recorded a new contract value of IDR4.95 trillion up to 9M22. The new contract value consisted of: 1) 50.9% private; 2) 31.2% WIKA; 3) Government 2.6% (Market Bisnis). MNCS Comment: Thus, the new contract value grew by +39.04% YoY (vs IDR3.56 trillion in 9M21). Meanwhile, with the target value of new contracts in FY22E reaching IDR7.35 trillion, the realization up to 9M22 was recorded at 67.35%. Currently, WTON is traded at the level of 14.93x/0.53x PER/PBV.
3. AALI IJ targets a 5% increase in production of FFB and CPO in FY22E (Kontan). MNCS Comment: The realized FY21 FFB production reached 4.33 million tons while CPO reached 1.47 million tons. With a 5% increase target, the company targeted a FY22E production of FBB to be 4.54 million tons while CPO is 1.55 million tons. However, up to 1H22, FFB production was 1.96 million tons (43% realization of the target) while CPO was 638 thousand tons (41% realization of the target). AALI is currently traded at the level of 9.69x/0.75x PER/PBV.
IHSG Updates
JCI strengthened +0.38% to 6,860.47 on Wednesday (19/10), followed by net foreign buy which reached IDR93.84 billion. Almost all sectors experienced strengthening and boosted the index rate, led by the financial sector (+1.39%) and followed by the non-cyclical sector (+1.29%). On the other hand, the only sector that experienced weakness was the energy sector (-0.74%). The index's gains were in line with Wall Street. We see investors tend to be optimistic ahead of the announcement of the benchmark interest rate (BI7DRRR) by BI, where the consensus estimates that the BI7DRRR will rise 50 bps to 4.75% which is expected to be able to suppress inflation amidst rising prices of basic commodities and restrain foreign investors' outflows. On the other hand, the Rupiah exchange rate closed lower at IDR15,498/USD. We estimate that the JCI will move in the price range of 6,800-6,930 pending BI interest rate decision and the release of Lending Facility Rate Oct, Deposit Facility Rate Oct, and Foreign Direct Investment YoY Q3 data. Today's recommendation: ANTM, BRPT, ICBP, INCO.
Corporate Actions
RUPS: AXIO, TRIN
Public Expose: GIAA
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