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Morning Dew 1 July 2020

FOKUS

INDONESIA ECONOMIC LIQUIDITY GREW STRONGER

In May, economic liquidity, or often called M2, grew at a faster rate of +10.4% (Y/Y) than that of April at +8.6% (Y/Y). Quasi money, which includes: term deposits, saving, and foreign exchange deposit, accelerated by +10.5% (Y/Y) from +8.5% (Y/Y), in addition to a jaw-dropping growth of securities excluding stocks of +37.5% (Y/Y). As a result, third-party funds grew +8.2% (Y/Y) if compared with the figure in April at +8.0% (Y/Y). 

 

Credit distribution, however, decelerated to +2.4% (Y/Y) from +5.1% (Y/Y), as credit from both corporations and individuals grew slower to +2.9% (Y/Y) and +2.2% (Y/Y) from +5.7% (Y/Y) and +4.4% (Y/Y), respectively. Property credit also decelerated to 4.7% (Y/Y) from +6.5% (Y/Y), which was caused by slower growth of mortgage loans, real estate credit, and construction credit. According to the data released by BI, construction credit growth was down by almost 300 bps to 5.2% (Y/Y) from +8.0% (Y/Y). Furthermore, mortgage loans growth declined to +4.7% (Y/Y) from +6.5% (Y/Y). 

 

Credit and term deposit rates also declined following an interest rate cut by Bank Indonesia. Weighted credit rate declined to 10.02% from 10.14%, while the 12-month and 24-month term deposit rate slipped to 6.42% and 7.26% from 6.52% and 7.32%, respectively.

 

JCI

On Tuesday trading (6/30), JCI rose by +3.6 points (+0.1%) to 4,905. The total transaction volume reached 8.0 billion shares. Meanwhile, the transaction value was recorded at Rp6.9T. Foreign investors booked a net sell of Rp489 billion, resulting in a net sell of Rp15.7T (YTD).

 

The highest weakening was led by sectors: Transportation (-2.54%), followed by Property (-0.77%) and Mining (-0.34%). Meanwhile, Meanwhile, the following sectors experienced gains: Agriculture (+1.23%), Basic Industries (+1.13%) and Finance (+0.79%). The following Stocks supported the JCI: SMMA (+4.0%), ARTO (+24.2%) and DNET (+7.4%). However, these stocks weighed the JCI': TLKM (-4.1%), INDF (-3.3%) and TCPI (6.8%).

 

U.S. NEWS   

U.S. stocks closed higher as bolstered by strong economic data and that the Fed will continue to be aggressive on supporting the economy. The Fed and Treasury were looking at extending the Fed’s established 11 emergency lending facilities to include asset-based lending markets. From economic data, the ISM will likely show its index of national factory activity rose to a reading of 49.5 in June from 43.1 in the month before, the index of consumer confidence rose to 98.1 this month from a revised 85.9 in May and by a better than expected U.S. Pending Home Sales in May spiking 44.3% (M/M). The DJIA rose 0.94% to 25,836.96, the S&P 500 gained 1.54% to 3,100.18 and the Nasdaq Composite added 1.87% to 10,058.77

 

U.S. Treasury yields were mostly higher, pushing prices lower as solid U.S. economic data. The benchmark 10-year notes were down 7/32 to yield 0.66%. The 30-year bonds fell 19/32, yielding 1.41%. Two-year notes were flat to yield 0.15%.

 

Crude oil prices closed lower as crude oil demand remains uncertain due to the rising number of cases of COVID-19. WTI crude down by -0.65% to US$39.44/barrel. Brent futures down by -1.0% to US$41.43/barrel.

 

MARKET UPDATE

IDX WILL LAUNCH 2 NEW INDEXES

PT Indonesia Stock Exchange (IDX) in the second half of this year will launch 2 new indexes, namely the IDX Quality 30 Index which contains 30 constituent members filtered from issuers that occupy the IDX80 index and one thematic index namely an index oriented towards environmentally friendly companies or meet environmental, social and governance (ESG) standards. In the selection of IDX Quality 30 Index members, IDX uses a number of variables that will be indicators of the selection of new index members, including the components of the ratio of return to equity (ROE ratio), debt to equity ratio (DER ratio), income ratio, income stability, capital structure , and the company's profitability.

 

COMPANY UPDATE

UNTR: TUMBLING CONSTRUCTION MACHINERY SALES, SKYROCKETING GOLD SALES

PT United Tractors, Tbk. (UNTR) noted the sales of Komatsu construction machinery of 60 units in May 2020 (-40% M/M). Cumulatively (January-May 2020), the realization of Komatsu sales was 777 units (-55% Y/Y) compared to 1,731 units in the same period last year. The detail: 280 units (36%) sold to the mining sector, 218 units (28%) to construction, 186 units (24%) to forestry, and the remaining 93 units (12%) to agribusiness. Despite continuing to decline in every month of this year, the national market share of Komatsu sales stood at 34%. On the other hand, UNTR’s gold sales skyrocketed by +122% M/M in May to reach 40,000 ounces, caused by the realization of deferred sales in the previous month due to the implementation of large-scale social restrictions (PSBB). Year-on-year, gold sales increased by +21.2% compared to 33,000 ounces in May 2019, while cumulatively, total sales reached 153,300 ounces (-7.4% Y/Y). Gold sales was the only segment still booked positive growth in May, when construction machinery and coal sales were unpromising.

 

WSBP BOOKED NEW CONTRACTS OF Rp577 BILLION IN 1Q20

PT Waskita Beton Precast, Tbk. (WSBP) booked new contracts amounting to Rp577 billion (-74.5% Y/Y) in 1Q20, making the order book to reach Rp9.5 trillion. External projects dominated the new contracts by 87% share, some of which including Padang - Sicincin Toll Road, Semarang - Demak Toll Road, Penajam - Balikpapan Toll Road, the addendum of Krian - Legundi - Bunder - Manyar (KLBM) Toll Road, and new airport in Kediri. In line with contracts, WSBP’s revenue and net profit slumped as well to Rp754 billion (-65.8% Y/Y) and Rp105 billion (-63.5% Y/Y), respectively. After all, thanks to strict efficiency, gross profit and net profit margins improved to 24.9% and 13.9%, respectively, compared to those of 1Q19 at 17.8% and 13.0%. Earlier, Fitch Ratings had also cut WSBP’s long-term national rating from BBB-(idn) to BB(idn) with a negative outlook.

 

WSKT WILL ISSUE NEW BONDS

PT Waskita Karya Tbk (WSKT) will offer Sustainable Bonds - Phase IV Year I of Rp300B in the first phase with two series: Series A (3 years) & Series B (5 years). Company targets fund of Rp4.95T. WSKT will give it assets as collateral to issue the bonds. The company also pointed several emissions issuers: PT Bahana Sekuritas, PT BNI Sekuritas, PT Danareksa Sekuritas, PT DBS Vickers Sekuritas Indonesia, PT Indo Premier Sekuritas & PT Mandiri Sekuritas. Meanwhile, WSKT appointed PT Bank Mega Tbk as trustee. This bond received a 'BBB (idn)' rating from Fitch Ratings Indonesia. The bond funds will be used to pay off WSKT's debt (50%) and also for the Company's working capital. The offering period will be from July 1, 2020 to July 15, 2020.

 

LPKR’S MARKETING SALES INCREASED BY 13%

PT Lippo Karawaci Tbk (LPKR) recorded pre-sales income (Marketing sales) of Rp703B (+13%, Y/Y) or reached 28% of the 2020 target (Rp2.5T). This marketing sales growth is supported by the launch of Waterfront Estates in Cikarang. LPKR will launch a new footprint housing project in Lippo Village Karawaci. It also will release non-strategic assets and focus on cash flow & core business (property & healthcare) in 2Q20. Previously, LPKR released its shares in First REIT, increased its ownership in Siloam Hospitals from 4.3% to 55.4% and then reduced its share portion in LPCK from 3% to 84%.

 

PPRO WILL LAUNCH 3 RESIDENTIAL PROJECTS

PT. PP Properti Tbk (PPRO) will launch 3 residential or landed house projects located in Rancasari with 536 units, Bandung - Transyogi Cibubur with 607 units and Cengkareng, West Jakarta with 179 units. As additional information, the company currently has a total land bank of 300-310 Ha.

 

JSMR STILL HAS A BILL OF Rp5.03 T TO THE GOVERNMENT

PT Jasa Marga (Persero) Tbk (JSMR) noted that up to now it still has a bill to the government for land acquisition for toll road construction of Rp5.03 T. For land acquisition in 2016 to 2020 the company has issued a bailout fund of Rp27 T and has already paid by the government in the amount of Rp22.2 T.

 

TECHNICAL OUTLOOK

FOR TODAY – OUR JCI POSITIVE, WITH EXPECTED RANGE OF 4,850 to 5,000.

JCI closed slightly higher at 4,905 and changing its Resistance to 4,980/5,130 while the Support at 4,880/745/. PSAR red dot still appeared, while EMA 5&20 just crossed and turned into dead cross pattern. MACD still negative while RSI and Stochastic were showing a posibility to turn positive.

Hence, according to the Technical Analysis, for this week our JCI will be NEGATIVE.

 

ADHI

Support            500

Resistance        1015

Target Price     995

 

BBTN

Support            900

Resistance        1930

Target Price     1800

 

BEEF

Support            210

Resistance        276

Target Price     260

 

DMAS

Support            102

Resistance        296

Target Price     246

 

GGRM

Support            46725

Resistance        49800

Target Price     49500

 

HOKI

Support            575

Resistance        780

Target Price     710

 

INCO

Support            2750

Resistance        3500

Target Price     3250

 

KAEF

Support            1160

Resistance        1455

Target Price     1400

 

TBIG

Support            1050

Resistance        1250

Target Price     1120

 

TLKM

Support            2880

Resistance        3540

Target Price     3400

           

WEGE

Support            107

Resistance        290

Target Price     240

 

 

 

DISCLAIMER

This research report is prepared by PT MINNA PADI INVESTAMA SEKURITAS Tbk. for information purposes only and is not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. The report has been prepared without regard to individual financial circumstance, need or objective of person to receive it. The securities discussed in this report may not be suitable for all investors. The appropriateness of any particular investment or strategy whether opined on or referred to in this report or otherwise will depend on an investor’s individual circumstance and objective and should be independently evaluated and confirmed by such investor, and, if appropriate, with his professional advisers independently before adoption or implementation (either as is or varied).

Tue June 30Th, 2020

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