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Morning Dew 18 September 2020

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BI MAINTAINED INTEREST RATES AT 4%

Bank Indonesia maintained interest rates at 4%, deposit facility rate at 3.25%, and lending facility rate at 4.75%. BI underlined the importance of currency stability amid low inflation rate. Global economy is estimated to improve, supported by improved mobility and manufacturing expansion in the U.S. and China. In addition, global trade volume and global commodity price are estimated to increase as well. However, the financial market remains uncertain, which is dragged down by lingering trade war, pressuring IDR currency.

 

Current account deficit is estimated to be lower, as exports have been stronger than imports thanks to weak domestic demand. As of August 2020, trade balance was recorded at a surplus of US$2.33B; also, foreign exchange reserve remains strong at US$137B. Going forward, the current account deficit is estimated to be lower than 1.5% of GDP. 

 

Indonesia recorded a deflation of 0.05% (M/M) in August, as demand for volatile food has not fully recovered. Bank Indonesia estimates that the inflation rate remains in control at 3% +/- 1% in 2020 and 2021, consistently maintaining price stability to control inflation.

 

Capital adequacy ratio in July stood at 22.96% and non-performing loans were still low at 3.22% (gross) and 1.15% (net). However, loan growth in August remains tepid at 1.04% (Y/Y), while third-party funds growth was penciled at 11.64% (Y/Y). It is important to note that loans that stem from agriculture, mining, and transportation have recorded a growth. Going forward, Bank Indonesia will continue to carry out accommodative macroprudential policy to boost credit disbursement in order to speed up economic recovery.

 

JCI

On Thursday trading (9/17), JCI weakened for the third consecutive day and closed lower by -20 points (-0.4%) to 5,038.4. Total transaction volume reached 9.5 billion shares with a transaction value of Rp6.6 trillion. Foreign investors still posted a net sell for the fifteenth consecutive day on record at Rp405 billion, compounding the year-to-date foreign net sell to Rp38.7 trillion.

 

The advancing sectors were led by property (+2.55%), miscellaneous industry (+1.16%), and agriculture (+0.62%). On the other hand, the retreating sectors were led by basic industry (-1.59%), finance (-0.78%), and mining (-0.70%). Stocks supporting the JCI were POLL (+11.5%), ASII (+1.7%), and EMTK (+8.9%). By contrast, stocks weighing down the JCI were BBRI (-1.8%), BMRI (-1.3%), and INKP (-6.4%).

 

U.S. NEWS  

U.S. stocks closed lower pressured by big cap tech shares after Jerome Powell warned the economic outlook remains "highly uncertain” signaling that the Fed may interest rates unchanged at a range of 0% and 0.25% until 2023. Moreover on the economic data, U.S. jobless claims rose by 860 thousand in the week ended Sept. 12th, compared to 893 thousand in the previous period and above market expectations of 850 thousand. Those data showed that first-time jobless claims had steadied but remained high for the third consecutive week with claims below 1 million. The DJIA fell 0.46%, to 27,902.44, the S&P 500 lost 0.84%, to 3,357.07 and the Nasdaq Composite dropped 1.27%, to 10,910.28.

 

U.S. Treasury yields fell barely unchanged as investors remain sceptical of the Fed efforts to stimulate the economy. The benchmark 10-year was flat to yield 0.687%. The 30-year bonds gained 12/32, yielding 1.431%. The 2-year notes were flattened to yield 0.137%

 

Crude oil prices continued to rise after Saudi Arabia pledged full compliance with the cuts, pared record production cuts of 9.7 Mb/d to 7.7 Mb/d starting in August, putting pressure on the UAE, Nigeria and Iraq, the alliance's quota violators, to extend the compensation period from September until the end of December. OPEC+ said that countries that failed to previously meet their quota limits would be compensating for their overproduction. WTI crude rose by 2.17% to US$41.03/barrel, while Brent crude rose by 2.56% to US$43.30/barrel.

 

COMPANY UPDATE

PTPP RECORDED NEW CONTRACT REALIZATION OF Rp11.24 T

PT Pembangunan Perumahan, Tbk. (PTPP) until August 2020 recorded new contracts realization of Rp11.24 T which came from the parent company amounting to 84% and from subsidiary companies by 16%. According to the origin of the project, BUMN contributed 46%, followed by contracts from the government at 32% and the private sector at 22%. The three major projects the company acquired in August 2020, among others; RDMP JO worth Rp1.8 T, SPAM Pekanbaru Rp1.26 T, Bogor Apartment worth Rp1.17 T.

 

INTP BOOKED LOWER SALES OF 10.7% UNTIL AUGUST

PT Indocement Tunggal Prakarsa, Tbk. (INTP) recorded a total sales volume of 10 million tonnes as of August 2020, declined by 10.7% Y/Y compared to 11.2 million tonnes in the same period last year. Declining sales were caused by still weak cement consumption, flood in Jabodetabek in 1Q20, and compounded by Covid-19 pandemic in 2Q20. In line, sales in industry level declined as well by 8.9% Y/Y as of August or reached 38.5 million tonnes. Going forward, INTP will focus on maintaining domestic market share while, at the same time, try to penetrate new markets abroad.

 

MMLP TO FINISH THE Rp1.1 TRILLION DIVESTMENT SOON

PT Mega Manunggal Property, Tbk. (MMLP) is to finish soon the divestment of four warehouses worth Rp1.1 trillion with Keppel Corp. and PT Asuransi Jiwa Manulife Indonesia. The warehouses will then be managed as a private investment fund with MMLP holding 25%-30% of ownership. For information, the warehouses are located in the Jabodetabek area with 163,000 m2 width and 96% occupancy rate, while the tenants are mostly companies in the FMCG, e-commerce, and logistics sectors, ranging from Unilever, Li & Fung, to DHL. Going forward, MMLP will also develop three more warehouses of 160,000 m2 in Bekasi and East Java, so the total width of the company’s warehouses will be 600,000 m2.

 

ATIC AND HUAWEI COLLABORATE IN DEVELOPING PRIVATE CLOUD SERVICE FOR BANKING

PT Anabatic Technologies, Tbk. (ATIC) through its subholding PT Anabatic Digital Raya in cooperation with Huawei Indonesia develop private cloud service for banking to keep pace with the ever-increasing digital banking transactions amidst Covid-19 pandemic. Increasing transaction frequencies requires upgrading server ability to avoid lagging or bottleneck in peak transaction periods. Therefore, ATIC and Huawei provide private cloud service named Huawei High Performance Server and Storage with more affordable price.

 

DSNG CONDUCTING A COMMISSIONING TEST OF BIO-CNG PLANT FACTORY

PT Dharma Satya Nusantara Tbk (DSNG) is conducting commissioning or trial production of the Bio-CNG Plant facility which will generate electricity with a capacity of 2x0.6 MW so that the total power produced is 1.2 W and biomethane gas with a capacity of 280 m3 per hour. This factory utilizes liquid waste from 1 (one) PKS with a processing capacity of 60 tons of FFB / hour, will create a reduction in greenhouse gas emissions of more than 50,000 tons of CO2, which is equivalent to planting more than 800,000 trees or a reduction of 11,000 units of passenger vehicles or equivalent. by recycling 17,000 tonnes of waste. The electrical energy generated can be used for the processing of Palm Kernel in the Kernel Crushing Plant (KCP) as well as the BioCNG Plant Production process itself.

 

CARE POSTPONED THE USE OF IPO PROCEEDS OF Rp1.1 T

PT Metro Healthcare Indonesia Tbk. (CARE) stated that the company still has not used the fresh funds from the initial public offering (IPO) on March 13, 2020, amounting to Rp1.1 trillion due to the COVID-19 pandemic. Initially, the funds will be used to acquire hospitals (RS). As additional information, so far, the plan to build a hospital in Majalaya, Bandung, West Java is still hampered by licensing completion. For the construction and procurement of equipment, this hospital requires funds of Rp300 B. The process of building a new hospital can begin in early 2021 and can be completed by the end of 2021.

 

TECHNICAL OUTLOOK

JCI IS NEGATIVE, WITH EXPECTED RANGE OF 4,960 to 5,110

JCI closed lower to 5,038. The Support lay at 4,754 while the Resistance hanging still at 5,220/380. EMA 5&20 still in death cross pattern while PSAR green still appeared. MACD leaning to positive but still in the negative territory along with Stochastic crossed down and signaling negative, while RSI was flattened.

 

EXCL – STOP OUT

Support            1,920

Resistance        2,600

Target Price     2,500

 

MAPI – STOP OUT

Support            600

Resistance        710

Target Price     700

 

ADHI

Support            500

Resistance        1015

Target Price     995

 

ADRO

Support            1030

Resistance        1350

Target Price     1280

 

BBTN

Support            900

Resistance        1930

Target Price     1800

 

FAST

Support            880

Resistance        950

Target Price     950

 

HMSP

Support            1455

Resistance        1650

Target Price     1650

 

PTBA

Support            1930

Resistance        2500

Target Price     2280

 

PWON

Support            332

Resistance        434

Target Price     420

           

WEGE

Support            107

Resistance        290

Target Price     240

 

For a detailed explanation, please see the Morning Dew PDF full version

 

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 September 17Th, 2020

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