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Morning Dew 10 March 2020



Stock markets around the world continue to plunge as panic selling continues on the back of continued spread of the coronavirus as well as recent eruption of Saudi-Russia oil war. Domestically, JCI fared no better as the index approaches the key 5,000 support. Post-market announcement of additional positive domestic coronavirus cases may spark additional concerns when the market opens on Tuesday.


Overnight, the Dow Jones Industrial Average lost close to 8% or over 2,000 points while the S&P 500 index took a sharp fall of 7.6% or over 200 points. It was the biggest one-day decline since 2008 financial crisis. The S&P 500 index initially plunged 7% at the start of the trading day, immediately triggered the automatic trading suspension for 15 minutes. The trading halt system has been implemented since 1987, after the Black Monday crash sent the S&P 500 down by 20%. Year-to-date (YTD), the S&P 500 and the DJIA have shed 17.6% and 19.6%, respectively. Just around a week ago, the Federal Reserve has slashed its federal funds rate to 1-1.25%. Subsequent developments after the cut have increased the odds for another cut.


Continued spread of the coronavirus has led to heightened risk for the global economic outlook. So far there have been over 110,000 cases of infections coming from 110 countries with over 3,800 fatalities reported. Outside China, Italy, Iran and South Korea were the hardest hit. There are 7,375 cases in Italy, 7,161 cases in Iran and 7,478 in South Korea. In the US, there have been over 600 cases of infection reported with 22 deaths. In Indonesia, there were 13 additional cases confirmed on Monday evening, bringing the total of 19 cases.


Saudi-Russia oil price war erupted over the weekend, sending the oil prices down by more than 20% overnight. Brent crude futures fell to as low as US$31.02 while WTI crude futures fell to as low as US$27.34 but later ended slightly off the lows. Both Saudi and Russia are to raise production, breaking the pact to limit supply previously in place. Already under pressure by the coronavirus worldwide spread, oil has been facing significant fall in demand. As oil prices tank, energy shares are facing lower revenues, adding fuel to the fire already ablaze in global stock markets.


Sharp 6.6% decline of the IDX composite on Monday has added the total YTD losses of 22.6% for the domestic stock market. Following the decline, the regulator has reapplied the asymmetric auto-rejection mechanism with auto-rejection for stocks to be triggered after 10% decline. Previously, the OJK has stated that it allows listed companies to conduct shares buyback without having to hold General Stockholders Meeting (GMS) first. Both measures are aimed to stabilize the market already under intense selling pressure. With the Federal Reserve already slashed its rates, Bank Indonesia is likely to follow suit in lowering the 7D-RR rate. Already cutting it by 25 basis points this year, at least another 25 bps is likely to be delivered as well.


Looking ahead, the global rout is likely to stay for now, stretching across continents. Despite sharing its impact, oil problem may eventually be resolved when the fear for recession due to the coronavirus dissipates. The virus itself holds the key to the current panic selling. Should the confirmed cases start to moderate, the panic will slowly stop, stabilizing the markets. From China itself, daily additional cases have been declining significantly, which means other countries will end up seeing declining rate of contagion as well after some time. At the moment, blue-chip names from the LQ-45 index have been heavily battered by the selloffs and thus attractive for selective accumulation. Based on technical analysis of the IDX composite, next support is seen at 5,050-5,067 ahead of 5,000 – the psychological support.



JCI closed down very sharply -361.7 points to level 5,137 (-6.6%) on Monday Trading (9 March 2020). The transaction volume reached 6.51B shares with a value amounting to Rp9.41T. Foreign investors recorded a net buy amounting to Rp218.01M resulting in an accumulation of net foreign sales amounting to Rp6.3T in 2020.


All sectors were down, the highest weakening was led by Miscellaneous Industry (-9.42%), Agriculture (-7.92%), and Basic Industry & Chemical (-7.35%). Stocks that supported JCI are EMTK (+1.4%), DADA (+30.5%) and BESS (+69.5%). On the other hand, the following stocks weaken JCI performance: BBCA (-6.7%), BBRI (-6.5%), and BMRI (-9.3%).



U.S. stocks took a nose-dive, The DJIA fell 7.78%, to 23,851.33, the S&P 500 lost 7.6%, to 2,746.56 and the Nasdaq Composite dropped 7.29%, to 7,950.68. Apple Inc shares fell 7.91% to $266.17


U.S. Treasury yields fell, with The benchmark 10-year Treasury yields plunged to historic lows,  yielding 0.57%, with the price rising to 1-10/32. The 30-year bonds rose 4-23/32, to a yield of 1.0%. The 2-year notes were 4/32 higher, yielding 0.4%


Oil prices sank the most since 1991, the global oil market is facing double pressure conditions. On the one side, the global outbreak of COVID-19 is feared to negatively impact the global economy, therefore slowing the demand for oil. On the other side, the different stance between the world’s two largest crude producers, Saudi Arabia and Russia, in responding to the possible impacts of coronavirus on oil demand causes the prices to tumble. The last week OPEC+ meeting in Vienna ended in a deadlock as Russia balked at the proposal of making further steep output cut of 1.5 million bpd to keep prices from falling even further. Saudi’s surprise by cutting its official selling price by US$6-8/barrel compounded with increasing output of 10-12 million bpd in April causing a price war seems unavoidable.


On Monday trading (3/9), Brent price for May 2020 contracts in the ICE Futures, London, took a nosedive to the level of US$34.49/barrel, a -23.8% intraday contraction, whereas WTI for April 2020 contracts at Nymex vanished by -24.6% to US$31.13/barrel. Previously, Brent and  WTI even touched the miserable level of US$31.02/barrel and US$27.34/barrel, respectively, which were the lowest prices since February 2016 and the largest intraday losses since January 1991 when the outbreak of the First Gulf War between Iraq and Kuwait occurred.


As a result, Morgan Stanley forecasts a zero growth rate for Chinese’ crude demand this year, while Goldman Sachs sees a contraction of 150,000 bpd in global demand and cuts its forecast for Brent to US$30/barrel for the 2Q-3Q20.




The Bank Indonesia Consumer Survey (BI) in February 2020 indicated consumer optimism current economic conditions weakened in February 2020. This condition was seen from the decline in the Consumer Confidence Index (CCI) to 117.7 or down -3.3% Vs. January 2020 is 121.7. Despite the decline, index numbers above 100 indicate that consumers are still optimistic about the economy. Medan (-15.1 points), followed by Banten (-12.7 points) and Surabaya (-12.5 points) experienced the most declining consumer optimism that occurred in all expenditure groups and all age groups. 




As of February 2020, PT Adhi Karya (Persero) Tbk. (ADHI) and PT Pembangunan Perumahan (Persero) Tbk (PTPP) recorded new contracts valued at Rp1.8T for ADHI and Rp3.4T for PTPP. In the near future, ADHI has a project worth Rp865B which has been won and will be carried out in April 2020. Whereas PTPP has a potential contract that has been in the tender process of Rp9.1T


The acquisition of ADHI's new contract came from the Jakarta Phase 2 MRT Project Package CP201 ​​Contract with a total value of Rp4.03T and ADHI received a project portion of Rp1.41T, the Oyama Plaza Apartment project in Sunter and Legi Market in Ponorogo worth Rp322B, and several building projects. Whereas PTPP comes from the Regular Refinery Development Master Plan (RDMP) of Rp448B, RDMP through a joint-operation scheme of Rp1.8T, the Cross-Country Post (PLBN) of Sei Pancang Rp205B, Phase II Kendari-Toronipa Road Rp412B and from a subsidiary of Rp589B.



PT Garuda Maintenance Facility Aero Asia Tbk (GMFI) on April 4, 2020, will open aircraft maintenance operations at Ngurah Rai Airport, Bali by targeting a number of airlines from Australia, which many planes stop at Ngurah Rai Airport. Previously, for operational steps at Ngurah Rai Airport, GMFI had acquired a hangar in the PT Angkasa Pura I area and treatment utilization would be carried out immediately at that location. Furthermore, if the business expansion runs smoothly, GMFI will acquire another hangar next to the hangar, which has been obtained.



PT Bumi Serpong Damai Tbk (BSDE) targeted its marketing sales growth by 11% (Rp7,2T) in 2020. These pre-sales will come from the main segment/ residential  (58%), commercial projects (28%), and land sales in joint venture partnerships with strategic partners (14%). New projects that are ready to be launched include Tabebuya, Zena, The Zora, Nava Park, Savia and Mozia. BSDE also targeted the commercial land sales in BSD City amounting to Rp800B, and it is expected to come from several projects such as Kota Wisata in Cibubur, Taman Banjar Wijaya in Tangerang, Grand City Balikpapan in Kalimantan, Grand Wisata in Bekasi, Southgate TB Simatupang in South Jakarta & The Elements in Jakarta. As of  2019, BSDE recorded pre-sales amounting to Rp6,5T and housing sales increased by 2%



PT Surya Semesta Internusa Tbk. (SSIA) will launch the Subang Industrial Estate in July 2020. This 250-ha industrial estate will be used for industrial areas (70%) and residential areas for workers (30%). SSIA targeted to sell 20 ha of land (+12.35%;Y/Y) with CAPEX of Rp600B (+15.38%;Y/ Y). SSIA will add up to 2,000 ha to develop the Subang City of Industry project.



PT Indo Tambangraya Megah Tbk (ITMG) will provide CAPEX amouniting to US$49M - US$50M this year. It will be allocated for mining or hauling road construction projects in Central Kalimantan. This project will support the expansion of the ITMG subsidiary's coal mine project, PT Bharinto Ekatama. The source of CAPEX funds will be from internal cash and bank loans. ITMG also plans to enter the renewable energy business (EBT) business in the future.




JCI was closed sharply lower at 5,136 and breached two nearest Support at 5,330/245 so the next Support lays at 5,020/4,940 while the Resistance hanging still at 5,750/845. PSAR red dot allready appeared along with EMA 5, 20&50 still in dead cross pattern. MACD turn to negative along with RSI and Stochastic still curled lower to negative. The Candlestick bounching down from the middle Bbline and heading to the lower Bbline. Hence, from technical analysis and foreign sentiment, our JCI is NEGATIVE.




Support            7050

Resistance        8400

Target Price      8500



Support            210

Resistance        390

Target Price      380



Support            1440

Resistance        1890

Target Price      1800



Support            1170

Resistance        1690

Target Price      1500



Support            810

Resistance        1400

Target Price      1270




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 March 10Th, 2020


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