Logo Minnapadi
aboutusmpi.png
<< Back To Daily Report

Morning Dew 3 July 2020

FOKUS

INDONESIA MANUFACTURING INDEX IN JUNE 2020 INCREASED

The COVID-19 pandemic and the Large-Scale Social Restrictions (PSBB) policy resulted in a significant decline in the manufacturing sector performance and a massive closure of the non-main business sector, transportation, followed by the low level of demand for goods from this sector. However, the Indonesian manufacturing industry in June 2020 showed an improvement that was reflected by the increasing Indonesian Manufacturing Purchasing Managers Index (PMI). According to the Markit IHS report, Indonesia's Purchasing Managers' Index (PMI) increased from 28.6 in May 2020 to 39.1 in June 2020 (+10 points). However, The PMI level is still below the level of 50 which shows the business sector in Indonesia is still contracting. The pace of recovery in the manufacturing industry in Indonesia was still slowing.

 

The decline in output for four consecutive months resulted in a significant weakening of buying activities. Production volumes and new demand after recording the worst contraction in April 2020 weakened again. Industrial sector concerns over excess capacity has triggered a reduction in the staff numbers and purchasing activities, followed by an increase in input costs. The companies still utilized existing assets and inventories to produce, resulting in a sharp fall in input demand and a significant increase in inventory. The price of raw materials (inputs) also was higher than before due to the weakening of the exchange rate followed by the high prices of some goods produced by the processing industry. In addition, the performance of manufactures in Indonesia also weakened due to large social activities restriction (PSBB) and disruption of transportation & goods distribution. The government policy “new normal policy” in the form of easing social restrictions and reopening the economic sector last June successfully increased manufacturing sector confidence. Going forwards, the performance of the national manufacturing industry is estimated to grow supported by fiscal incentive policies to encourage domestic consumption along with strict health rules to avoid the second Covid-19 attack in Indonesia. However, manufacturing activities and also overall manufacturing sector performances not only in 3Q20 but also in 2020 are expected to continue to decline and will recover in 1Q21.

 

JCI

On Thursday's trading session (07/02), JCI rose by +52.4 points (+1.1%) to 4,967. The total transaction volume reached 7.7 billion shares, while the transaction value was recorded at Rp7.6T. Foreign investors booked a net sell of Rp210 billion, resulting in a net sell of Rp16.2T (YTD).

 

All sectors advanced, which were led by property (+2.3%), infrastructure (+2.0%), and basic industry (+1.8%). Stocks supporting the JCI: TLKM (+3.3%), UNVR (+3.2%), and BBCA (+1.2%). By contrast, stocks weighing down the JCI: SMMA (-3.8%), CASA (-6.0%), and MEGA (-2.3%).

 

U.S. NEWS   

U.S. stocks closed higher boosted by strong U.S. jobs data. The U.S. economy added 4.8 million jobs in June, above market consensus at 2.9 million. Meanwhile, the unemployment rate fell for the second straight month to 11.1% from 13.3% in May, also beating consensus of 12.4%. However, initial jobless claims rose by 1.427 million, above market expectations of 1.355 million, while continuing claims increased to 19.29 million. The DJIA rose 0.38% to 25,832.02, the S&P 500 gained 0.45% to 3,130.03 and the Nasdaq Composite added 0.52% to 10,207.63.

 

U.S. Treasury yields rose, pushing prices lower after the Fed officials held further discussions on the potential for capping yields for certain maturities, otherwise known as yield-curve control. The benchmark 10-year notes were up 4/32, to yield 0.67%. The 30-year bonds were 4/32 higher, yielding 1.43%. Two-year notes rose 1/32 to yield 0.15%.

 

Crude oil prices closed higher buoyed by better-than-expected U.S. job data and boosted by strong manufacturing data in China, Germany, and France. WTI crude rose by +1.05% to US$40.24/barrel. Brent futures rose by +1.64% to US$42.72/barrel.

 

MACRO UPDATE

WORLD BANKS UPGRADE INDONESIA RANKING

The World Bank based on the classification as of July 1, 2020, officially raised the ranking of Indonesia and six other countries from lower-middle-income countries to upper-middle-income countries. Romania, Nauru, and Mauritius are three of the seven countries that managed to rise in rank. All three are included as countries with high income or high income. While other countries are Benin, Nepal, and Tanzania with GNI per capita the three countries are US$1,250, US$1,090, and US$1,080. Of the 7 countries that succeeded in moving up the class, Indonesia was the only one that entered the rank of middle to upper-income countries with a GNI per capita of US$4,050 from US$3,840. Currently, the World Bank classifies countries based on GNI per capita in 4 categories, namely low income with income below US$1,035, lower middle income with income between US$ 1,036 - US$ 4,045, upper middle income with per capita income between US$4,046 - US$12,535, and high income with per capita income above US$12,535.

 

COMPANY UPDATE

WSKT HOPES TO IMPROVE ITS CASH FLOWS

This year, PT Waskita Karya (WSKT) said that the Company seeks to divest its toll roads, namely Becakayu, Kanci-Pejagan, and Pejagan-Pemalang toll roads. The Company aims to acquire around Rp7T-8T, although the details of the potential buyers remain to be disclosed. In addition, WSKT is hopeful that the government will be able to pay its payables worth Rp6.63T to WSKT. Of Rp6.63T, Rp3.71T is from land acquisition, Rp1T is from fund cost, and Rp1.92T is from Light Rail Train Palembang project. If, by any chance, WSKT does not receive its receivable, the Company’s interest bearing debts could reach Rp56.7T this year, pushing the gearing ratio to 2.73x near its covenant at 3x. Otherwise, the gearing ratio will stand at 2.46x.

 

PEFINDO AFFIRMED BNLI’S idAAA RATING AFTER THE ACQUISITION BY BANGKOK BANK

Pefindo affirmed the rating of idAAA with stable outlook for PT Bank Permata, Tbk. (BNLI) after the effective acquisition by Bangkok Bank PCL on May 20, 2020. The rating was underpinned by an expectation of strong support from the parent company to BNLI in expanding business or when facing financial issues. As a matter of fact, Bangkok Bank is one of Thailand’s leading banks with a strong presence in the corporate segment. As of 1Q20, it had a total assets of THB 3,395 billion (Rp1,559 trillion), total equity of THB 414.8 billion (Rp190.5 trillion), and net profit of THB 7.67 billion (Rp3.5 trillion). Besides, Pefindo also affirmed idAA+ rating for BNLI’s Subordinated Bond II Phase I/2013 and idAA for Subordinated Bond II Phase II/2014.

 

MDKA AND PSAB ACCELERATE THE ESTABLISHMENT OF JV IN PANI GOLD MINE

Two gold mining companies, PT Merdeka Copper Gold, Tbk. (MDKA) and PT J Resources Asia Pasifik, Tbk. (PSAB), is accelerating the formation of a joint venture in Pani Gold Mine, Gorontalo. Currently, both companies are preparing for the conditions required in the MoU. Previously, on 6 January 2020, MDKA and PSAB signed a conditional agreement to combine MDKA’s Pani mining license (IUP) and PSAB’s Pani Block into a joint project, so that the overall reserves would be much larger if compared to both being managed separately. MDKA’s Pani is estimated to contain mineral reserves of 89.5 million tonnes and a gold content of 0.82 gram/ton for every 2.37 million ounces of gold, whereas PSAB’s Pani is estimated to contain mineral reserves of 72.7 million tonnes and a gold content of 0.98 gram/ton for every 2.3 million ounces of gold.

 

AGII FOCUSES CAPEX FOR FACILITY MAINTENANCE

PT Aneka Gas Industri (AGII) will maintain the 2020 capex budget which was previously budgeted at Rp150 billion - Rp200 billion. The company will focus more on the use of capex to finance only important facility maintenance needs. At the same time, the company also said it would limit the opening of new branches as a result of the weakening of the global economy by the COVID-19 pandemic.

 

TECHNICAL OUTLOOK

JCI POSITIVE, WITH EXPECTED RANGE OF 4,900 to 5,020.

JCI closed slightly higher at 4,967. The Resistance hangging at 4,980/5,130 while the Support at 4,880/745/. PSAR red dot still appeared, while EMA 5&20 still in dead cross pattern. MACD still negative but started to turn positive along with RSI and Stochastic were curled higher and showing a posibility to turn positive.

 

ADHI

Support            500

Resistance        1015

Target Price     995

 

BBTN

Support            900

Resistance        1930

Target Price     1800

 

BEEF

Support            210

Resistance        276

Target Price     260

 

DMAS

Support            102

Resistance        296

Target Price     246

 

GGRM

Support            46725

Resistance        49800

Target Price     49500

 

HOKI

Support            575

Resistance        780

Target Price     710

 

INCO

Support            2750

Resistance        3500

Target Price     3250

 

TBIG

Support            1050

Resistance        1250

Target Price     1120

 

TLKM

Support            2880

Resistance        3540

Target Price     3400

           

WEGE

Support            107

Resistance        290

Target Price     240

 

 

 

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 July 2Th, 2020

Disclaimer

En Lorem Ipsum In Eiusmod.

EN HOME LOREM IPSUM EU NISI NISI LABORE ANIM REPREHENDERIT ADIPISICING SED LABORE QUIS UT TEMPOR ESSE QUIS CILLUM VENIAM CILLUM SUNT NISI CILLUM UT FUGIAT FUGIAT UT OFFICIA ET QUIS.

En Lorem ipsum Velit sit magna adipisicing laborum eu voluptate exercitation minim sit ex incididunt exercitation ut in sunt culpa quis magna sed dolor in et amet sunt id fugiat sint laboris sed officia est id officia eiusmod eu reprehenderit ullamco sed esse aliquip ex minim occaecat amet ad nulla voluptate do officia in reprehenderit quis officia dolore pariatur in quis consectetur ut nostrud aliqua sed officia fugiat nisi incididunt anim in laborum.

Lorem ipsum Dolor dolor dolore quis magna nulla aute ea sed velit id amet ut id minim proident cupidatat anim pariatur ex do dolore ut sit mollit ex voluptate consequat sit eu esse cillum exercitation eu dolore pariatur sunt et ut est Ut dolore id voluptate qui Ut in fugiat non exercitation Excepteur sunt magna ullamco sint do quis laboris dolore dolore pariatur laboris nulla mollit nisi laboris magna in aute Ut enim Excepteur est culpa in enim officia enim ea cillum fugiat dolore proident officia eiusmod pariatur in elit et aliquip esse culpa sint in fugiat aliquip cupidatat non id aliquip sit ad reprehenderit mollit dolor aliqua Duis in amet exercitation ut ut cillum et adipisicing qui aliqua.