UBS-Indonesia Metals Feedback：Bullish on gold copper, but equities scarce；neutral on nickel...-20251117

Feedback: Scarce metal equity, with reasonable valuations and good liquidity

We were in Singapore and Hong Kong last week, discussing our positive ideas onIndonesian metals (earnings at turning point) with investors. In Indonesian equities, wesensed investors were overweight gold and neutral to slightly underweight nickel andcopper. While there was a consensus bullish view on gold and copper, investor pushbackcame from scarce availability of equities with quality attributes, undemanding valuationsand sufficient liquidity (above US$10m average daily trading turnover). Reactions weremixed on our positive nickel equity narrative but we thought more investors were willingto be bullish on nickel by seeking positive potential drivers. We met some pushback,albeit not meaningful, to our: 1) top gold pick Merdeka Copper Gold (MDKA; Buy) for itsless-pure gold exposure, risk of unfavourable gold policy, and slow copper assetmonetization; and 2) top nickel pick Vale Indonesia (INCO; Buy) for its smelter permit riskunder the new smelter moratorium and relatively low stock-trading liquidity.