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Morning Dew 14 January 2020

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BUSINESS ACTIVITIES SURVEY 4Q19

The results of the Business Activity Survey (SKDU) released by Bank Indonesia (BI) indicate that expansion of business activities in 4Q19 continued to grow positively, although slowing if compared to the previous quarter (qoq). The slowdown is in line with the historical pattern of business activity development which tends to decelerate at the end of the year. This is reflected in the value of 4Q19 SBT of 7.79%, lower than 13.39% in 3Q19. The sectors supported the growing SBT were Financial, Real Estate and Corporate Services (SBT 3.01%), Trade, Hotel and Restaurant (SBT 2.76%), Services (SBT 2.51 %), as well as Transportation and Communication (SBT 1.06%).

 

In line with the development of business activities, production capacity and labor use were recorded lower in 4Q19 than the previous quarter (production capacity: 4Q19 74.41% vs. 3Q19 75.42%; labor: 4Q19 0.95% vs. 3Q19 1.40%). Financially, liquidity and profitability of the business remained good, sustained by normal access to bank loans.

 

Respondents predicted business activities in 1Q20 would improve, indicated by SBT which increased to 10.70% (qoq). The increase sourced from business activities in Finance, Real Estate and Corporate Services; Agriculture, Plantation, Animal Husbandry, Forestry and Fisheries; and the Manufacturing sectors.

 

JCI

On Monday trading session, JCI was closed higher by +22 pts (+0.35%) to 6,297. Total trading volume reached 7.8B shares, with a total transaction value of Rp6.6T. Foreign investors posted a net buy of Rp252B, uplifting the YTD foreign net buy to Rp2.2T.

 

The retreating sectors were basic industry (-1.4%), agriculture (-1.02%), and mining (-0.35%). The advancing sectors were led by miscellaneous industry (+1.03%), consumer goods (+0.85%), and infrastructure (+0.7%). Stocks supporting the JCI were BBRI (+2.3%), HMSP (+2.2%), and UNVR (+1.8%). In contrast, stocks weighing down the JCI were BRPT (-5.1%), CPIN (-3.4%), and MIKA (-5.3%).

 

U.S. NEWS

U.S. stock indexes closed higher as U.S. and Chinese officials prepare to sign a phase-one trade deal in Washington later this week. Moreover, the U.S. plans to withdraw its largely symbolic designation of China as a currency manipulator ahead of Wednesday’s (15/01) planned signing of a partial trade pact. The DJIA was up 0.28% at 28,905.9, while the S&P 500 gained 0.7% to 3,288.06. The Nasdaq Composite added 1.04% to 9,273.93.

 

U.S. Treasury yields rose, ahead of U.S.-China trade deal signing. The benchmark 10-year notes were down 5/32 to yield 1.84%, while the two-year notes were 1/32 lower, yielding 1.59%. The 30- year bonds fell 10/32 to yield 2.30%.

 

Oil prices fell as Middle East tensions eased, easing worries about potential global supply disruptions.  Brent crude were down -1.15% to US$64.23/barrel. WTI crude slip by -1.63% to US$58.08 /barrel

 

COMPANY UPDATE

MEDC ALLOCATES CAPEX OF US$ 340M

PT Medco International Tbk. (MEDC) will allocate its new CAPEX amounting to US$340M by 2020. It will be used for oil and gas business (US$ 280M) and electricity business (US$ 60M). MEDC targeted the two compositions for oil (43%) and gas production (67%) by 2020. As December 2019, MEDC conducted two projects: the initial oil production at Bualuang Phase 4B and the 12,900 barrels per day (bopd) in Thailand. These productions are above expectations. Next, MEDC will undertake gas development in East Java & Buntal-5, South Natuna Sea Block B in the middle of 2020. For the electricity business through its subsidiary, MEDC sold 1,870 GWh of power. While the metal mining business through PT Amman Mineral Nusa Tenggara, MEDC supplied 96 million pounds of copper & 42 kilos of gold troy ounces. The latest project is the development of the 7th phase of the Batu Hijau Mine and the front end engineering design (FEED) smelter.

 

BBRI DISTRIBUTED KUR FOR 4 MILLION SMEs

PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) successfully managed to distribute KUR (SME credit) amounting to Rp 87.9T to more than 4 million SMEs. The main channel; of this KUR is for production sector (50%). BRI expects to distribute the KUR amounting to Rp 120.2T in 2020. The company's business strategy includes expanding the marketing network (415 BRILink agents) and synergizing with various ministry and institutional programs

 

MBSS TO EXPAND ITS BUSINESS

PT Mitrabahtera Segara Sejati, Tbk. (MBSS) allocates capital expenditure of US$14.6 million this year, which will be used for tug boat, barge, and floating crane maintenance; as well as investment in digitalization. Moreover, the company expects to record a 10% revenue growth this year, supported by MBSS’ effort to convert spot to long-term contracts, in addition to reduce idle time.

 

BMRI DISTRIBUTED SYNDICATED LOAN OF US$ 3.4 B

As of 2019. PT Bank Mandiri, Tbk. (BMRI) involved in 34 syndicated transactions amounting to US$12.32 billion, and the company contributed US$3.4 billion. In addition, the majority of syndicated loan receivers were from infrastructure sectors; power plants; oil & gas, energy, and mining industries.

 

CTRA MARKETING SALES OF Rp 6.1 T IN 2019

As of 2019, PT CIputra Development, Tbk. (CTRA) acquired marketing sales of Rp6.1T, which is higher than the full year target at Rp6T. The biggest contribution stemmed from low-middle-segment residential project, as for example, the company succeeded in acquiring Rp900 billion from Citra Garden Puri Jakarta and Losari Makassar projects in October. 

 

PWON TO INCREASE RECURRING INCOME PORTION

PT Pakuwon Jati, Tbk. (PWON) plans to increase recurring income portion to 55% in 2020, which is higher than historical 52%, on average. There are two hotels that are expected to operate this year, namely, Four Points hotel and Westin Hotel. In addition, the company expects property sales to improve this year as a result of more benign interest rate environment.

 

BWPT ALLOCATES A CAPEX OF Rp 617 BILLION

PT Eagle High Plantations Tbk. (BWPT) will allocate capex of Rp 617 billion in 2020, up 54.2% Vs. capex 2019 amounting to Rp 400 billion, which will be used for the plantation and non-plantation sectors. As much as Rp. 45 billion for plantations, building 3 biogas units amounting to Rp. 129 billion, and as much as Rp 444 billion is used to build and develop factories.

 

IMJS OBTAIN US$ 175 M OF SYNDICATION CREDITS

PT Indomobil Multi Jasa Tbk. (IMJS) through its subsidiary, PT CSM Corporatama received a syndicated loan of US$ 175 million or IDR 2.45 T (exchange rate of 1US$ = Rp14,000) which will be used for working capital and refinancing. PT CSM Corporatama is a company engaged in the business of long-term vehicle rental, short-term vehicle rental, driver services, fleet management services, and vehicle ownership programs for tenants.

 

RUIS DIVERSIFY TO RENEWABLE ENERGY

PT Radiant Utama Interinsco Tbk. (RUIS) in 2020 will diversify its business to non-organic businesses that focus on continuing the development of new and renewable energy businesses, especially solar energy, biomass, and waste to energy from previously only supporting services of oil and gas mining companies. With this diversification, the company in 2020 targets its revenues to grow double-digit. As of 2019, the company managed to record a contract value of Rp 3.5 trillion, and in 2020 allocates capex Rp 70-80 billion which will be used for the project development in the business inspection, construction and to Meliwis project.

 

TECHNICAL OUTLOOK

JCI IS POSITIVE, with expected range of 6,270 - 6,330

JCI was closed higher to 6,296. The candlestick still headed to the upper BB line, while EMA 5&20 still flattened. MACD turn to positive, along with a green dot from PSAR just appears. RSI flatened, while stochastics signaling up. The Resistance stood at 6,340/400, while the Support laid at 6,210/5,940,

 

ASII

Support            6690

Resistance        6950

Target Price      7100

 

BBNI

Support            7200

Resistance        7750

Target Price      8150

 

BRPT

Support            1150

Resistance        1450

Target Price      1600

 

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

 

TLKM

Support            3850

Resistance        4200

Target Price      4180

 

UNVR

Support            8150

Resistance        8780

Target Price      8700

 

 

 

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 January 14Th, 2020

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