Global Market Highlights

The DJIA strengthened by +3.57% on Wednesday (6/11), followed by the S&P 500 (+2.53%) and Nasdaq (+2.95%). Wall Street continued to rally as investors reacted positively to the US presidential election results, with Donald Trump winning, bringing expectations of policies favorable to economic growth. Additionally, the market wait-and-see ahead of the The Fed FOMC meeting, which is anticipated to cut the benchmark interest rate by -25 bps. Today the market will be looking forward to several data releases such as: 1) China Balance of Trade Oct-2024; 2) Indonesia Foreign Exchange Reserves Oct-2024; 3) US Initial Jobless Claims 2-Nov.

Domestic Update

The Ministry of Trade has officially issued Regulation of the Minister of Trade (Permendag) Number 26/2024 regarding the export of palm oil derivative products. This new regulation expands the list of products that must meet the Domestic Market Obligation (DMO) for Minyakita from four to five products. The regulation adds processed palm oil waste products, high acid palm oil residue, and empty fruit bunch oil to the DMO requirements. MNCS Comment: We believe that this regulation will boost the shift in consumer habits toward packaged oil, which will increase domestic volume. In line with this, price fluctuations can be mitigated as supply is controlled, helping to balance supply and demand. On the other hand, the export of POME, HAPOR, and EFB oil has increased over the past two years. With this regulation in place, it is expected to slow the pace of exports, which will increase the supply of Minyakita.

Company News

1. AVIA IJ will distribute an interim dividend of IDR665.8 billion or the equivalent of IDR11/share. MNCS Comment: We estimate a potential yield of approximately ~2.2% with a payout ratio of 57.4% of total net profit as of 9M24. Cum dividend in the regular market and negotiated market will be on 12 Nov-2024. Additionally, the company posted a net profit of IDR1.2 trillion (+1.8% YoY) in line with an increase in revenue of +4.7% YoY in 9M24. AVIA is currently trading at 19.38x/2.99x PER/PBV.

2. SICO IJ reported an increase in net profit to IDR8.7 billion (+5.0% YoY) in 9M24. MNCS Comment: This increase in net profit was in line with a +0.6% YoY increase in revenue to IDR72.7 billion (vs IDR72.2 billion in 9M23). Additionally, OPEX declined by -6.3% YoY, resulting in an increase in operating profit to IDR11.0 billion (vs IDR10.5 billion in 9M23). Furthermore, finance costs also declined by -8.3% YoY. As a result, margins expanded, with OPM/NPM rising to 15.1%/11.9% in 9M24 (vs 14.6%/11.4% in 9M23). SICO is currently trading at 8.11x/0.78x PER/PBV.

3. MARK IJ will distribute an interim dividend of IDR76.8 billion or the equivalent of IDR20/share. MNCS Comment: We estimate a potential yield of approximately ~1.7% with a payout ratio of 34.4% of total net profit as of 9M24. Cum dividend in the regular market and negotiated market will be on 13 Nov-2024. Additionally, the company posted a net profit of IDR221.1 billion (+124.5% YoY) in line with an increase in revenue of +74.1% YoY in 9M24. MARK is currently trading at 14.76x PER.

IHSG Updates

The JCI plunged by -1.44% to 7,383.87 on Wednesday (6/11), with a net foreign sell of IDR1.1 trillion. The majority of sectors posted declines, weighing down the index, led by the technology sector (-2.96%), followed by the property and real estate sector (-2.00%). Meanwhile, the sectors that strengthened were led by the industrial sector (+0.38%), followed by the basic materials sector (+0.18%). The index weakened amid mixed movements in other Asian markets, as investors anticipated the outcome of the US presidential election, which increased outflow pressures. The Rupiah closed weaker at IDR15,830/USD. We estimate that the JCI will move in the price range of 7,325-7,417. Today’s recommendations: AMRT, CPIN, MDKA, MIKA.

Corporate Actions

Cum Dividend: TAPG (IDR76/share), SMSM (IDR35/share)

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