Global Market Highlights
DJIA strengthened by +2.66% on Monday (03/10), followed by the S&P 500 (+2.59%) and the Nasdaq (+2.27%). Wall Street managed to rebound amid the release of ISM Manufacturing PMI data on Sep-22 which was corrected to 50.9 points (vs 52.2 points on consensus). Investors were watching the yield on the US T-note 10Y which fell to the level of 3.66% and became the driving force for Wall Street. Today, the market will be looking toward several data releases such as: 1) US Factory Orders Mom Aug; 2) US Fed Logan Speech; 3) US Redbook YoY.
Domestic Update
• BPS reported inflation rate in Sep-22 to be +1.17% MoM/+5.95% YoY. MNCS Comment: The increase in inflation was triggered by government-regulated components, especially from the increase of subsidized fuel prices for Pertalite & Solar by +30-31% YoY which pushed inflation for transportation components by +8.88% MoM.
• Furthermore, the national Covid-19 daily rate had increased by 1,134 active cases (03/10).
Company News
1. PTBA IJ implements the CISEA application in its operational activities. With this digitalization, system integration in the mining ecosystem will improve the company’s operation where operational business can be monitored in real time (Kontan). MNCS Comment: We view positively the digital transformation that the company is carrying out. That way, mining business operations are expected to be more efficient and faster in overcoming obstacles that occur in the field. Currently, PTBA is traded at the level of 3.89x/2.13x PER/PBV.
2. UNTR IJ reported that Komatsu heavy equipment sales in Aug-22 had reached 590 units. Therefore, the accumulated sales of heavy equipment up to 8M22 had reached 3,989 units (Market Bisnis). MNCS Comment: Up to 8M22, heavy equipment sales rose by +111.06% YoY. With the sales target of Komatsu heavy equipment in FY22E of 5,000 units, the realization of sales had reached 79.78%. We are optimistic that the company can achieve its target as global coal prices remain high and the capex allocation of USD750-800 million. Currently, UNTR is traded at the level of 5.94x/1.58x PER/PBV.
3. STAA IJ acquired 2 oil palm plantation companies covering an area of 3,072 Ha, with the transaction value reaching IDR306 billion (Market Bisnis). MNCS Comment: With this acquisition, the total planted area of the company becomes ~48,000 Ha. Until FY25F, the company plans to expand its land expansion to 50,000 hectares. It is hoped that the acquisition will encourage the company's production volume, thus impacting positively on the company's revenue amid the continued correction in CPO prices. Currently, STAA is traded at the level of 10.30x/3.33x PER/PBV.
IHSG Updates
JCI weakened by -0.44% to 7,009.72 on Monday (03/10), followed by net foreign buy which reached IDR34.52 billion. A number of sectors weakened and weighed on the index's pace, led by the health sector (-2.58%) followed by the financial sector (-0.73%). On the other hand, the strengthening sectors were led by the industrial sector (+1.01%) followed by the energy sector (+0.67%). The index weakened amid the release of S&P Manufacturing PMI Sep-22 which expanded to a level of 53.7 points, the highest in the last 8 months. Investors were looking at the inflation rate Sep-22 which grew by +5.95% YoY (vs +4.69% YoY in Aug-22). On the other hand, the Rupiah exchange rate closed higher at IDR15,228/USD. We estimate that the JCI will move in the price range of 7,000-7,100. Today's recommendation: BTPS, BRPT, ESSA, TKIM.
Corporate Actions
Cum Dividend: UNTR (IDR818/share)
Cum Rights: BKSL (IDR50/share)
RUPS: BABP
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