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Morning Dew 12 March 2020

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INDONESIA GDP PROJECTION IN 2020 AFTER THE SPREAD OF COVID-19

The COVID-19 outbreak has a big impact on the global economy (GDP) especially China due to disruption of international trade activities, supply chains & domestic consumption. GDP growth is predicted to decline if the COVID-19 outbreak continues until the 2Q20. The Central Bank of Indonesia (BI) is likely to revise Indonesia's economic growth outlook in 2020 at the Central Bank meeting on March 18 - March 19. It was previously estimated between 5.0% - 5.4%. However, the Asian Development Bank (ADB) estimated that COVID-19 will not give a big effect on Indonesia's GDP compared to other countries in ASEAN or Asia region. ADB stated three reasons related to this: (1) BI & Indonesian Government still have many rooms  to support its economy through macro & fiscal expansion policies, (2) Indonesia is not deeply integrated in the global supply chain, (3) the Indonesian economy is supported by domestic consumption/ household (HH) which as of  4Q19 the HH portion to Indonesian GDP reached  50%.

 

The OECD and Moody's projected a decline in Indonesia's GDP (4.7% - 4.8%) in 2020 due to a slowdown in global economic activities and a fall in China's GDP (below 5%). The IMF estimated that Indonesia's GDP growth will only reach 5.2%. While the United Nations Comtrade and S&P Global Economics predicted that the Asia Pacific region GDP including Indonesia will only grow by 4.3% in 2020 or it was lower than 2019 projection (-0.5 points) before the existence of COVID-19. This is caused by dependence on China.  On the other hand, Bloomberg and Goldman Sachs Global Investment Research also stated the GDP of Emerging Markets countries would be between 4.7% - 4.8%. However, many economists, international organizations and central banks believe the global GDP growth including Indonesia are predicted to recover in 3Q20 mainly supported by the policy of lower interest rates.

 

JCI

JCI on Wednesday trading session (11/03) was closed lower -66.7 points to 5,154 (-1.3%). The transaction volume reached 6.4 B shares, with a value amounting to Rp6.97T. Foreign Investors booked a net buy amounting to Rp171.8B resulting in the YTD accumulation of foreign net sale of Rp6.95T

 

Only the consumer goods sector advanced by +1.25%, while the other sectors weakened, led by property (-3.59%), infrastructure (3.19%), and agriculture (-2.86%). Stocks that supported JCI are UNVR (+2.8%), HMSP (+1.9%) and MEGA (+5.6%). In contrast, stocks weighing down the JCI were BBCA (-1.3%), TLKM (-2.6%) and POLL (-5.4%).

 

U.S. NEWS  

U.S. stocks slumped with DJIA ending more than 20% below its all-time closing high from last month and entering the bear-market territory for the first time in more than a decade, after the World Health Organization (WHO) on Wednesday (11/03) officially declared the coronavirus that causes COVID-19 and that has infected more than 121,000 people around the world has become a pandemic, while investors looked for fiscal stimulus. The DJIA fell 5.85%, to 23,553.53, the S&P 500 lost 4.89%, to 2,741.39 and the Nasdaq Composite dropped 4.7%, to 7,952.05.

 

U.S. Treasury yields rose, the benchmark 10-year notes at a high yield of 0.849%. The 30-year bonds dropped 4-7/32, to a yield of 1.38%. On the short end of the curve, the 2-year notes were 2/32 lower, yielding 0.50%.

 

Oil prices closed lower after Saudi Arabia and UAE moved to boost output as it intensified a price war with Russia and exacerbated by data that showed U.S. crude supplies rise a 7th straight week. Brent crude down -4.06%, to US$35.71/barrel and WTI crude fell 4.77%, at US$32.72/barrel.

 

COMPANY UPDATE

ACES OPENED THE 200th NEW OUTLET IN MAKASSAR

PT Ace Hardware Tbk (ACES) after previously on the 29th of February 2020 opening new outlets in Gorontalo, Sulawesi, ACES on Wednesday, March 12, 2020, will open the 3rd new outlet in 2020 at the Perintis Kemerdekaan Living Plaza, Makassar, South Sulawesi. Thus, the total outlets currently owned by the company reached 200 outlets. In addition to this information in 2020, ACES is targeting to add 15 new outlets that are integrated into the shopping center and allocates a capex of Rp250B to support business expansion.

 

SMBR TO ALLOCATE CAPEX Rp149.5B

PT Semen Baturaja Tbk (SMBR) will allocate a capex of Rp149.5B which will be used for business expansion and development. Specifically, capex will be used for the preparation of the development of the mine in Bukit Pelawi and also the construction of the cement terminal. Furthermore, the company will also downstream the cement derivative products, reconditioning the 3 site emplacement path and several other investments that are routine. Some downstream cement products that the company will sell include mortar cement, lightweight bricks, white clay, and B3 waste treatment.

 

TBLA ISSUING Rp500B BOND

PT Tunas Baru Lampung Tbk (TBLA) on Wednesday, March 11, 2020, has issued Phase I Tunas Baru Lampung Phase II Year 2020 worth as Rp500B. The bonds consist of 2 Series, Series-A (Rp300B - 8.9%/year - 3-year term) and B-Series (Rp200B - 9.75%/year - 5-year period). The bonds received an A (idn) rating (Single-A) from PT Fitch Rating Indonesia (Fitch). The funds obtained will be used for debt refinancing to the three banks that are due. With details, Rp270B is used to pay debts to PT Bank CIMB Niaga Tbk (BNGA). Rp125B is used to pay a portion of the loan to PT Bank OCBC NISP Tbk (NISP). Rp100B to repay loans to PT Bank Permata Tbk (BNLI).

 

BLTZ TO EXPAND UP TO 100 NEW CINEMAS

PT Graha Layar Prima, Tbk. (BLTZ), the company operating the CGV Cinemas networks, is striving to expand by opening up to 100 new cinemas in all over Indonesia this year. The company tries to balance between equalizing the coverage of its cinemas, while expanding the segmentation and acquiring new markets. So far, BLTZ has already owned 68 cinemas with 396 screens scattered in 35 cities in 16 provinces in Indonesia.

 

TECHNICAL OUTLOOK

JCI IS NEGATIVE, WITH EXPECTED RANGE OF 4,940 to 5,290.

JCI was closed lower at 5,154. PSAR red dot still appeared along with EMA 5, 20&50 still in dead cross pattern. MACD, RSI, and Stochastic still negative along with the Candlestick breached the lower Bbline. Support lays at 5,130/020/4,940 while the Resistance hanging still at 5,230/290/750.

Hence, from technical analysis and foreign sentiment, our JCI is NEGATIVE.

 

TPIA

Support            7050

Resistance        8400

Target Price      8500

 

ELSA

Support            210

Resistance        390

Target Price      380

 

ACES

Support            1440

Resistance        1890

Target Price      1800

 

BJBR

Support            810

Resistance        1400

Target Price      1270

 

 

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).

Thu March 12Th, 2020

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