MNCS Morning Navigator

30 September 2022

MNCS Morning Navigator September 30, 2022

Global Market Highlights
The DJIA was down -1.54% on Thursday (29/09), followed by the S&P500 (-2.11%) and the Nasdaq (-2.84%). Wall Street corrected following the release of initial jobless claims data per 24-Sep'22 which was below the consensus of 193,000 (vs 215,000 on consensus), thus giving speculation to market participants for more aggressive monetary tightening by the Fed in the future. In addition, the yield on the US T-note 10Y which rebounded to 3.76% also pressured the Wall Street. Today, the market will be looking toward several data releases such as: 1) US Core PCE Price Index YoY Sep; 2) US Michigan Consumer Sentiment Final Sep; 3) UK GDP Growth Rate YoY Final Q2.

Domestic Update
• Since BI decided to increase the benchmark interest rate, IndONIA's interest rate rose 28 bps to 3.83% and the 1-week JIBOR rate rose 46 bps to 4.52%. MNCS Comment: We view that the increase in money market interest rates reflects the ongoing transmission of monetary policy. Currently, there is sufficient liquidity in the banking system. However, with the increase in Statutory Reserves and a rising loan demand, we estimate that loan interest rates will begin to increase 3-6 months after the benchmark interest rate hike (1Q23).
• Furthermore, the national Covid-19 daily rate had increased by 2,003 active cases (29/09).

Company News
1. BIRD IJ realized its capex allocation in 1H22 with IDR600 billion, which was used for the purchase of a fleet of vehicles to a fleet of CNG fuel (Kontan). MNCS Comment: Realized capex from the FY22E target had reached 50%. The company targets the purchase of a vehicle fleet of 4,000-5,000 units with 75-100 units of EV vehicles. BIRD is currently traded at the level of 11.72x/0.86x PER/PBV.
2. INDY IJ through its entity PT Indika Mineral Investindo had acquired PT Perkasa Investama Mineral for USD 5 million, where the company is engaged in bauxite ore mining and smelters (Emiten News). MNCS Comment: We view positively the company's efforts to diversify into the non-coal business, in line with the company's goal to be more expansive into the green industry. INDY is currently traded at 2.61x/1.07x PER/PBV levels.
3. LPPF IJ opened a new outlet in Gowa, Makassar. With an area of 2,279 m2, the new outlet is the third store to open in South Sulawesi (Investor Id). MNCS Comment: The opening of outlets in Gowa marks the company's 4th expansion this year, reaching 9M22 total outlets to 142 units. Currently, LPPF is traded at the level of 4.96x/24.03x PER/PBV.

IHSG Updates
JCI weakened by -0.58% to 7,036.20 on Thursday (29/09), followed by net foreign sell which reached IDR622.91 billion. The majority of sectors weakened and weighed on the index's pace, led by the technology sector (-1.95%) followed by the transportation and logistics sector (-1.60%). On the other hand, the strengthening sectors were led by the health sector (+0.92%) followed by the energy sector (+0.14%). The index continued its correction as foreign investors made outflows amid uncertainty in the global economy going forward, triggered by the Fed's plan to increase the FFR aggressively to curb inflation. On the other hand, the Rupiah exchange rate closed at Rp15,263/USD. We estimate that the JCI will move in the price range of 7,000-7,100. Today's recommendation: BBRI, INKP, MEDC, UNVR.

Corporate Actions

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