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Morning Dew 3 December 2019

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GLOOMY NOVEMBER INFLATION

BPS on November 2019, recorded an inflation at 0.14%, headline inflation rate at 3.00% (Y/Y), while the core inflation at 3.08% (Y/Y). Those numbers were below market consensus  at 3.06%. The low core inflation rate indicates an unhealthy economic condition due to the downward trend in purchasing power.

 

Inflation occurred due to price increases originating from the foodstuffs group of 0.37%; processed foods, beverages, cigarettes, and tobacco by 0.25%; housing, water, electricity, gas and fuel by 0.12%; clothing group by 0,03%; health group of 0.23%; and education, recreation, and sports group of 0.02%. While expenditure groups such as transportation, communication, and financial services experienced a decline in the index of 0.07%.

 

67% or 57 cities out of 82 cities in Indonesia experienced inflation, while deflation was seen in 25 cities. The highest inflation was recorded in Manado at 3.30% and the lowest came from Malang at 0.01%. While the highest deflation occurred in Tanjung Pandan at 1.06% and the lowest occurred in Batam and Denpasar each at 0.01%.

 

BPS head Suhariyanto, stated that inflation will increase at the end of the year as public consumption increases ahead of Christmas and the New Year. The government is targeting 3.5% inflation this year. While BI is targeting a range of 3.1% and staying within the target range of 3.0 ± 1% by 2020.

 

JCI

On Monday trading session, JCI rose by +118 pts or +1.97% to 6,130. Total trading volume reached 12.8B shares, with a transaction value of Rp6.7T. Foreign investors recorded a net sell of Rp148B, dragging down YTD foreign net buy to Rp41.1T.

 

All sectors advanced, led by mining (+3.5%), consumer goods (+2.3%), and property (+2.3%). Stocks supporting the JCI were BBCA (+2.3%), BBRI (+2.9%), and HMSP (+4.4%). In contrast, stocks weighing down the JCI were SLIS (-8.3%), BNLI (-1.9%), and MINA (-9.1%).

 

U.S. NEWS

U.S. stocks ended lower after a worse-than-expected report on the U.S. manufacturing sector and concerns about U.S. trade relations weighed on investor sentiment. The Institute for Supply Management (ISM) report Manufacturing Purchasing Managers Index (PMI) for the U.S. manufacturing sector edged down to 48.1 in November of 2019 from 48.3 in October, well below market expectations of 49.2. The DJIA ended 0.94% lower to 27,786.44, the S&P 500 ended 0.85% lower at 3,114.15 and the Nasdaq Composite dropped 1.12%, to end at 8,567.99.

 

U.S. Treasury yields inched higher after weak manufacturing data. The benchmark 10-year notes fell 15/32 to yield 1.83%. 2-year notes were flat yielding 1.61%. 30-year bonds fell 51/32 to yield of 2.27%.

 

Oil prices rose slightly as upbeat manufacturing activity in China as well as the potential for OPEC and its allies to agree on deeper production cuts when they meet later this week. Brent crude up by +0.64% to US$60.88 /barrel. WTI crude rose by +1.40% to US$55.94 /barrel.

 

MACRO UPDATE

FOREIGN TOURISTS VISIT TO INDONESIA INCREASING

As of October 2019, the National Statistics Board (BPS) noted that foreign tourists visit to Indonesia increased by 4.86% year-on-year, but decreased by 3.28% month-to-month. Cumulatively, the visit increased slightly by 2.85% which amounting to 13.62 million visits. On average, occupancy rate in starred hotels in October was 56.77% or declined 3.25 points year-on-year, as that of October 2018 was 58.84%. For duration of stay, on average the tourists spent 1.80 days or declined 0.10 points year-on-year. Malaysia (17,8%), China (11,85%), Singapore (10,72%), Australia (9,74%), and Timor Leste (6,79) were the big five countries from which the tourists came.

 

COMPANY UPDATE

KREDIVO RECEIVED LOAN FROM BNLI 

PT Bank Permata Tbk (BNLI) officially invested loan amounting Rp. 1T as part of the agreement between BNLI and Kredivo in the future. Kredivo is known as fintech company with a good reputation and has offered digital credit platform for retail customers in Indonesia. BNLI optimists the fintech business growth may be better in the future and come from short-term cash loan products. 

 

ADMF BONDS RATING ARE idAAA

PT Adira Dinamika Multi Finance Tbk (ADMF) received "idAAA" for Serie A Bond (continuing Bond IV/2019) amounting to Rp232B and Sukuk Mudharabah SeriE A  (continuing Bond III/2019) amounting Rp127B from PEFINDO. The bonds maturity dates are on 3 February 2020. Adira Finance stated the bonds payments will be from the company's internal cash, cash equivalents and instalment payments of refinancing payable. 

 

SOE CONTRACTORS’ CAPEX PLAN

PT Waskita Karya Tbk (WSKT) plans to allocate capex of Rp20 - 22 trillion (+5-10% yoy), which mostly will be used for toll road construction. Going forward, the company expects its toll road investment, in addition to realty and energy segments, could provide recurring-type source of revenues. On the other hand, PT Wijaya Karya Tbk (WIKA) also allocates Rp16T of capex next year, but it is lower than this year’s Rp18.1T, although the realization was still below 10%. 

 

PTBA’S CAPEX BECAME Rp4T IN 2020

PT Bukit Asam Tbk (PTBA) allocated its CAPEX amounting to Rp4T in 2020 and will use it for development of coal gasification. This project is part of the company’s development of coal downstream business. PTBA will use 50 % of the CAPEX for development of two businesses: coal transportation and stream power plant project in Mulut Tambang Sumsel 8 (2x620MW) projected to finish in 2021. However, the company also confirmed will use its internal cash. PTBA spent its budget amounting to Rp 953,54M to buy fixed asset and increased its joint venture investment amounting to Rp 126,57M until September 2019.

 

EXCL’S TOWER TENDER

There are reportedly three local telecommunication companies that are still in process of EXCL’s tower tender amounting to 3,250 towers. If the deal goes through, then the proceeds will be used for capital expenditures and operational-related needs.

 

TECHNICAL OUTLOOK

JCI is NEGATIVE with expected range of 5,980 - 6,150

JCI rose to 6,130 breach the nearest resistance at 6,060. So the next resistance hanging at 6,160/270, while support lays at 5,760. PSAR green dot finally appears, and EMA 5&20 still in a dead cross pattern. MACD start to become positive along with RSI and Stochastic. Therefore, we are negative on today’s JCI, apart almost all indicators from technical analysis became positive. Yesterday trading session formed a bullish full white body pattern that indicates correction could happen or just waiting today confirmation.

 

ACES   

Support            1,650

Resistance        1,850

Target Price      1,900

           

LINK    

Support            3,800

Resistance        4,250

Target Price      4,500

 

BSDE

Support            1,300

Resistance        1,400

Target Price      1,440

 

PTBA

Support            2,120

Resistance        2,500

Target Price      2,410

 

EXCL

Support            3,250

Resistance        3,600

Target Price      3,555

 

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 December 2Th, 2019

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