Global Market Highlights
DJIA weakened by -0.14% on Wednesday (05/10), followed by the S&P500 (-0.20%) and the Nasdaq (-0.25%). Wall Street was pressured as the yield on the US T-note 10Y rose to 3.75%, following the release of fairly solid economic data, where the ADP Employment Change Sep-22 rose to 208,000 (vs 200,000 on consensus) and the ISM Non-Manufacturing PMI Sep-22 expanded to the level of 56.7 points (vs 56 points on consensus). Today, the market will be looking toward several data releases such as: 1) US Continuing Jobless Claims; 2) US S&P Global/CIPS Construction PMI Sep; 3) Germany S&P Global Construction PMI Sep.
Domestic Update
• Based on OJK data, foreign exchange credit (forex) grew by +17.9% YoY in Jun-22. MNCS Comment: We view that the significant growth in foreign currency loans is due to banks trying to increase loan yields amid the trend of rising global benchmark interest rates. However, in the midst of high financial market volatility, banks should be aware of the credit risk and possible asset quality deterioration of this foreign currency credit exposure.
• Furthermore, the national Covid-19 daily rate had increased by 1,542 active cases (05/10).
Company News
1. AUTO IJ posted a net profit increase of +55.06% YoY in 1H22 to IDR435.16 billion (vs IDR280.63 billion in 1H21) (Emiten News). MNCS Comment: The increase in net profit was supported by 1) the company's revenue growth (+19.99% YoY), where all segments of the company recorded an increase, especially the automotive component manufacturing segment (+28.08% YoY); 2) Expansive GPM at 13.12% (vs 12.45% in 1H21); 3) increase in profit of associates +23.25% YoY. Currently, AUTO is traded at the level of 7.02x/0.55x PER/PBV.
2. SSMS IJ will distribute an interim cash dividend for FY22E of IDR710.98 billion or equivalent to IDR74.64 per share with the cum dividend date in the regular and negotiation market on 11-Oct'22 (Emiten News). MNCS Comment: Therefore, SSMS will distribute an interim dividend yield of 5.37%. Meanwhile, the payout ratio reached 70% of net profit in 1H22. Currently, SSMS is traded at the level of 6.52x/2.10x PER/PBV.
3. BUMI IJ targeted ASP realization in FY22E of USD125/ton, Meanwhile, coal production target in FY22E is 70-78 million tons (Market Bisnis). MNCS Comment: With ASP in FY21 of USD58/ton, the increase in ASP in FY22E will be +115.52% YoY. Meanwhile in 1H22, the company's ASP was recorded at USD108/ton. Thus, to achieve the ASP target of USD125/ton in FY22E, the company needs to increase its ASP to USD141/ton in 2H22. BUMI is currently traded at the level of 4.76x PER.
IHSG Updates
JCI closed up +0.04% to 7,075.39 on Wednesday (05/10), followed by net foreign buy which reached IDR77.96 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the transportation sector (+2.79%) followed by the technology sector (+1.83%). On the other hand, the weakening sectors were led by the infrastructure sector (-0.19%) followed by the industrial sector (-0.18%). The index's gains were in line with Wall Street and the majority of other Asian bourses. Investors' concerns about the potential for aggressive monetary tightening of the Fed had eased, as the release of US employment opening data in Aug-22 which fell by -10% MoM and headed to its lowest level in 14 months. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,193/USD. We estimate that the JCI will move in the price range of 7,000-7,100. Today's recommendation: DOID, ELSA, PGAS, PTPP.
Corporate Actions
RUPS: DSSA, CITA
Public Expose: OBMD
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