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Morning Dew 13 January 2020

FOCUS

RETAIL SALES IN NOVEMBER 2019 UP BY 1.3%

Central Bank of Indonesia (BI) recorded the Real Sales Index (RSI) in November 2019 at 216.6 (+1.3%;Y/Y) supported by sales growth in Parts & Accessories sales  (+17.0%;Y/Y), Other Household Equipment sales (+5.5%;Y/Y), and Food, Beverage & Tobacco sales (+4.6%;Y/Y). It occurred in Medan and Denpasar. The RSI in November 2019 continued to grow positively, despite a decline of RSI in October 2019. While RSI in October 2019 grew by 3.6% (Y/Y). Meanwhile, RSI in December 2019 decreased (-0.2%;Y/Y) and reached at 235.9 due to a decrease in the Cultural & Recreational Goods sales (-17.0%;Y/Y). However, on a monthly basis, the RSI in December 2019 increased (+8.9%; mtm) supported by Christmas & New Year demand. RSI in 4Q19 grew by 1.6% (Y/Y) and came from an increase of Food & Beverage sales (+4.5%;Y/Y), and Tobacco sales (+1.4%;Y/Y). A rising prices at retail traders level for next three months (PEI-February 2020) increased caused a the Price Expectations Index (PEI) moved to 154.6 from 149.2 in the previous month, however, it is predicted to decline. 


While the PEI for the next six months (PEI-May 2020) is estimated to increase with an index of 177.8. For retail Sales Expectations Index (SEI) in the next three months (SEI-February 2020), it is predicted to decline at level 140.8.While SEI for the next six months (SEI-May 2020) will reach at level 156.1 or higher than the previous period. It was supported by an increase of Ramadan and Eid Mubarak demand.

 

JCI

On Friday trading session, JCI was closed higher by +0.5 pts (+0.007%) to 6,275. Total trading volume reached 11.7B shares, with a total transaction value of Rp6.2T. Foreign investors posted a net buy of Rp95B, uplifting the YTD foreign net buy to Rp1.95T.

 

The retreating sectors were led by basic industry (-0.7%), agriculture (-0.59%), and manufacturing (-0.46%). The advancing sectors were led by mining (+1.54%), trade (+0.54%), and infrastructure (+0.18%). Stocks supporting the JCI were UNTR (+4.3%), TLKM (+0.5%), and ADRO (+3.7%). In contrast, stocks weighing down the JCI were UNVR (-1.2%), MEGA (-8.3%), and ASII (-0.7%).

 

U.S. NEWS

U.S. stock indexes closed lower as slower-than-expected U.S. jobs and wage growth in December. U.S. Nonfarm payrolls in December added 145,000 new jobs, below the 165,000 expected by market consensus and less than the 266,000 gain recorded in November. The DJIA fell 0.46% to 28,823.57, the S&P 500 lost 0.29% to 3,265.35 and the Nasdaq Composite dropped 0.27% to 9,178.86

 

U.S. Treasury yields fell, after a tepid December jobs report and the announcement by the U.S. of new sanctions against Iran. The benchmark 10-year notes were up 11/32 to yield 1.82%, while the two-year notes were up 1/32, yielding 1.57%. The 30-year bonds were up 1- 5/32 to yield 2.28%

 

Oil prices fell, as traders digested mixed data from big jump from U.S. crude stockpiles - OPEC commitment to maintain the price - Easing tensions in the Middle East. Brent crude were down -0.52% to US$65.03/barrel. WTI crude slip by -0.74% to US$59.12 /barrel

 

MACRO UPDATE

GERMANY EXPORTS TO IRAN WERE HALVED

As of 11M19, Germany exports to Iran plunged -48.2% (yoy) to around US$1.44B or 1.3B Euro as a result of U.S. sanctions on the latter. Germany distributed machineries, chemical products, foods, and pharmaceuticals. Moreover, it is known that Germany imports to Iran fell significantly by -54.7% (yoy) to approximately 191 million Euro. 

 

COMPANY UPDATE

WSKT’S 2020 CAPEX TO AMOUNT Rp 25 - 28 T

PT Waskita Karya Tbk (WSKT) is to allocate Rp25 trillion to Rp28 trillion for capital expenditure this year, an increase from Rp22 trillion last year. The source of funds would be from internal cash, loans, or new bonds issuance. Some projects currently undergoing are Kuala Tanjung - Tebing Tinggi - Parapat Toll Road (143.25 km), Kayu Agung - Palembang - Betung Toll Road (111.7 km), and Cileunyi - Sumedang - Dawuan Toll Road (60.1 km). Additionally, WSKT also targets new investment projects in realty and non-toll infrastructure.

 

MOODY’S UPGRADED MEDC RATING FROM B2 TO B1

Moody’s upgraded PT Medco Energi Internasional, Tbk. (MEDC)’s corporate family rating from B2 to B1, as well as the company’s backed senior unsecured bonds. In addition, MEDC outlook was changed from positive to stable. The rating upgrade was due to Moody’s view that MEDC’s scale and geographic diversification have improved as a result of Ophir acquisition, in addition to expected cash flow improvement. Moody’s expects the company’s debt/EBITDA to improve to below 4.0x in 2019.

 

CITA WILL CONDUCT RIGHT ISSUE

PT Cita Mineral Investindo Tbk (CITA) will conduct a Limited Public Offering (PUT) III by adding Capital by granting Pre-emptive Rights (PMHETD) by issuing as many as 648,218,250 new shares with a nominal value of Rp100 per share. Shareholders who have 26 shares up to 12 February 2020 are entitled to 5 Pre-emptive Rights where 1 Pre-emptive Rights has the right to buy 1 new share. The funds obtained will be used, among others, to pay part of the bank's debt to Oversea-Chinese Banking Corporation and the company's working capital.

 

TLKM WILL ADD THE CONTENT SERVICE

PT Telkom Indonesia Tbk (TLKM) will add several providers content that can be accessed through the Telkom network, both Telkomsel and IndiHome. In which, one of them is Netflix, the company is currently entering the negotiation stage so that the streaming service can meet the terms and conditions of content in Indonesia.

 

TECHNICAL OUTLOOK

JCI IS POSITIVE, with expected range of 6,250 - 6,330

JCI was closed higher to 6,275. The candlestick still headed to the upper BB line, while EMA 5&20 still flattened. MACD starts to cross down but prone to turn positive, along with a red dot from PSAR already hit the candlestick – hopefully, today be able to turn into the green dot. RSI curled lower, while stochastics still negative but leaning to positive. The next Support laid at 5,940, while Resistance stood at 6,340.

 

BBNI

Support            7200

Resistance        7750

Target Price      8150

 

ICBP

Support            10700

Resistance        11850

Target Price      12550

 

KAEF

Support            1230

Resistance        1960

Target Price      1600

 

MAPI

Support            1000

Resistance        1115

Target Price      1125

 

MYOR

Support            1800

Resistance        2100

Target Price      2150

 

SOCI

Support            160

Resistance        210

Target Price      200

 

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).

Mon January 13Th, 2020

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