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Morning Dew 30 March 2020

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INDONESIA’S INTERNATIONAL INVESTMENTS IN 4Q19

Bank Indonesia recorded Indonesia’s International Investments (PII) in 4Q19 showing an increase in net liabilities to US$338.2 billion, grew +4.4% compared to that of 3Q19 at US$324.1 billion and was equal to 30.2% of GDP. The increase was underpinned by Foreign Financial Liabilities (KFLN) that grew higher than Foreign Financial Assets (AFLN). (For information purposes, the position of international investments reflects how much investments Indonesians have in the overseas compared to how much investments foreigners have in Indonesia. Increasing net liabilities shows larger investments by foreigners, or capital inflow.)

 

The increasing KFLN, which is mainly in the form of portfolio and direct investments, reflects investors’ confidence on the prospect of Indonesia’s economy and the lucrative return/yield of domestic financial assets. Indonesia’s KFLN in 4Q19 was recorded at US$711.6 billion, increased by US$21.7 billion or +3.1% Q/Q, supported by all of its components, i.e. direct investment, portfolio investment, financial derivatives, and other investments. Increasing portfolio investment was brought about by foreign capital inflow in the domestic government bond (SBN) and global corporate and government bonds markets. Besides, increasing KFLN was also affected by positive revaluation of Rupiah-denominated investment instruments, in line with the positive performance of JCI (IHSG) and the appreciation of Rupiah against the US dollar. 

 

The increasing AFLN, on the other hand, was backed by the increase in direct investment and foreign exchange reserves. In 4Q19, AFLN grew by +2.1% Q/Q or US$7.6 billion to amount US$373.3 billion. In addition to direct investment and forex reserves, other factors sustaining the AFLN were positive revaluation as a result of US dollar depreciation against other principal currencies and bullish stock indices in most of the countries where Indonesians put their investments (India, China, Hong Kong).  On a full year basis, Indonesia’s 2019 PII was relatively stable compared to 2018 when PII posted net liabilities as well. However, the portion of GDP slightly declined (PII 2018 US$317.3 billion or 30.4% GDP).

 

JCI

On Friday trading session (3/27), JCI continued its rally for the second consecutive day and ended higher by +206.67 points (+4.76%) to 4,545.57, after once hitting its highest daily gain of 8.27% in the first session. Trading volume reached 9.9 billion shares with a total transaction value of Rp12.36 trillion. Foreign investors, again, posted a net buy of Rp221 billion, easing the year-to-date foreign net sell to Rp9.95 trillion.

 

All sectors rose, with the biggest gain secured by miscellaneous industry (+10.04%), property (+7.85%), and basic industry (+6.31%). Stocks supporting the JCI were BBRI (+9.9%), BBCA (+4.4%), and BMRI (+10.5%). In contrast, stocks weighing down the JCI were TPIA (-6.7%), MIKA (-3.2%), and BSIM (-5.8%).

 

U.S. NEWS  

U.S. stocks closed sharply lower as coronavirus fears outweighed the long-awaited fiscal stimulus package. Investors assume that the coronavirus stimulus bill might not be enough, following the lockdown of large parts of the U.S., after the U.S. has become the country with the highest number of COVID-19 cases. The DJIA was down 4.06% at 21,636.78, while the S&P 500 lost 3.37% to 2,541.47. The Nasdaq Composite dropped 3.79% to 7,502.38

 

U.S. Treasury yields continue to fall, with two-years Treasury yields hitting more than 7year low as unemployment claims soared to a record 3.28 million last week and COVID-19 cases in the U.S. surpassed China and Italy.  The two-year notes were higher 2/32, yielding 0.23%. The benchmark 10-year notes rose 1-8/32, to yield 0.68%, with the long bond up 3-23/32 to yield 1.25%.

 

Oil prices continue to fall for a fifth straight week in a row as fears spark over the COVID-19 outbreak. Brent crude down -5.92%, to US$24.78/barrel and WTI crude slipped -4.56%, to US$21.57/barrel.

 

INDUSTRY UPDATE

BKPM: INCREASING PROPERTY INVESTMENT TRENDS IN THE LAST 5 YEARS

The Investment Coordinating Board (BKPM) states that in the past 5 years there has been an increasing trend in the realization of property investment which includes housing, industrial estates, and offices. For 2019, the property investment trend declined by 2.74% due to the presidential election, which will trigger a wait and see action by investors. Nevertheless, in 2019 BKPM recorded a significant increase in terms of projects, up from 1,502 projects to 3,036 projects. Furthermore, the decline in 2019 only occurred in foreign investment (FDI), while domestic investment (DDI) actually rose significantly by 79.8%.

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COMPANY UPDATE

BSDE PROFIT GROWTH REACHED BY 116,28% 

PT Bumi Serpong Damai Tbk (BSDE) recorded an increase in profit for the year attributable to the owners of the parent entity amounting to Rp2,79T (+116,28%). While operating revenue reached amounting to Rp7,08T (+6,79%;Y/Y) in 2019. The increase in Company’s revenue came from An Increase of Sales amounting  to Rp5,35T, rent amounting  to Rp1,04T, construction amounting  to Rp120,6B, building management amounting  to Rp383B, and others income amounting  to Rp43,5B. Company’s business sector that experienced a decline in income were hotels and recreation arenas. The Company’s action to acquire PT Trans Bumi Sejahtera (PT TBS) which has engaged in the construction of toll roads provides a valuation benefit of an investment share value amounting  to Rp35B and a profit of share acquisition amounting to  Rp21,9B. BSDE also added its ownership of PT TBS (50%) so that the Company’s total ownership became 100%. The Company’s total liabilities in last year edged down to only amounting to Rp20,89T with total cash and total aset amounting  to Rp6,86T and Rp54,4T respectively.

 

IPCC WILL NOT REVISE ITS REVENUE TARGET IN 2020

The PT Indonesia Kendaraan Terminal Tbk (IPCC) operational will continue as usual amid the COVID-19 spread. For now, it will not revise its revenu target in 2020 merevisi target pendapatan untuk tahun 2020. IPCC’s main revenue still comes from the CBU vehicle and unloading service. IPCC will increase the loading and unloading service from the domestics segmen because there is still high demand from this segment particularly the placement and delivery of the CPU and heavy equipment. Throughout 2019 the PCC recorded a total CBU of 581.272 units (+37,97%, Y/Y), where export stevedoring activities increased by 27,55% (Y/Y). For import, it dropped by 6,70% (Y/Y). Total domestic achievements up to the end of december 2019 increased by 116,31% (Y/Y).

 

SSIA WILL OFFER EDEN HAUS SIMATUPANG

PT Surya Internusa Tbk (SSIA) group through its subsidiary, PT TCP Internusa (TCP), will invest (Rp300M) to build a luxury cluster, Eden Haus Simatupang.The Cluster will consist of  41 units of boutique class luxury houses with garden home resort concept. All units will be built simultaneously and be marketed in 2Q20 with two choices: Boulevard type (Rp7B) and Standard type (Rp6B). The cluster construction is targeted to be completed in the next 12 months. PT TCP Internusa previously built Kuningan Raya/ embassy, Patra Kuningan elite housing complex , CBD Rasuna Said Kuningan, Grand Melia Kuningan complex and Glodok Plaza.

 

UNTR IS ESTIMATED WILL REVISE ITS OPERATIONAL TARGET AFTER 1Q20

PT United Tractors Tbk (UNTR) has been monitoring the impact of COVID-19 spread on the Company’s operational performance until now. UNTR is estimated to conduct a review of the 2020 performance targets including heavy equipment sales, coal production and goal sales after 1Q20. The Company also stated that It will not revise its CAPEX allocation in 2020 (US$450M) which will be used for business development of PT Pamapersada Nusantara/ PAMA (US$300M), Martabe gold mine (US$100M), construction machinery segmen and ACSET. UNTR targeted to sell 2.900 units of LKomatsu heavy equipment by 2020. The target is the same as the 2019 sales target. While for coal construction business, It targeted to produce 130MT of coal or equal to the 2019 production target. For the coal sales through its subsidiary, PT Tuah Turangga Agung (TTA), UNTR targeted sales of 9,5MT of coal. However, it lowered its sales target from the gold mining business line (Agincourt Resources) only between 360.000 ounces and 370.000 ounces of gold. The reason behind the low gold busines sline target is that gold dredged in 2020 will come from deeper layers and lower gold percentages.

 

ULTJ: NET PROFIT UP BY  47.9% (Y/Y)

PT Ultrajaya Milk Industry & Trading Company Tbk. (ULTJ) recorded an extraordinary financial performance for 2019, by recording a net profit of Rp1.03 trillion, up 47.9% (Y/Y). That increases due to increasing the company's sales to Rp6.24 trillion or up by 14.04% (Y/Y). So with this increase, earnings per share attributable to shareholders of the parent entity also rose from Rp60 to Rp89.

 

TECHNICAL OUTLOOK

JCI IS POSITIVE, WITH EXPECTED RANGE OF 4,500 to 4,700.

JCI closed higher at 4,545 breaching its nearest Resistance at 44,410/545, so the next Resistance hanging at 4,628/900, while the Support lay still at 3,920/845. Stochastic, MACD, and RSI suddenly continue to positive. PSAR green dot already appears, while EMA 5, 20 & 50 still in a dead cross pattern.

Hence, today our JCI from technical analyst is POSITIVE continue to rebound even though NEGATIVE SENTIMENT from the U.S. stock market remain strong

 

ICBP

Support            8150

Resistance        11100

Target Price     10500

 

SIDO

Support            900

Resistance        1280

Target Price     1200

 

BBNI

Support            2700

Resistance        7900

Target Price     7100

 

BBTN

Support            660

Resistance        1930

Target Price     1800

 

WEGE

Support            107

Resistance        290

Target Price     240

 

DMAS

Support            102

Resistance        296

Target Price     246

 

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 March 30Th, 2020

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