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Morning Dew 6 July 2020

FOKUS

PERFORMANCE OF JCI AND SECTORAL INDEX IN FIRST SEMESTER OF 2020

Performance of the Composite Stock Price Index (JCI) in the first half weakened by -21.9% to the level of 4,905 where foreign investors still recorded a net sell of Rp32.7 T as a result of the COVID-19 pandemic that triggered a Large-Scale Social Restriction (PSBB). Quoting from Bisnis.com, data collected through Bloomberg shows that the JCI correction has been the lowest since semester I / 2002. In the past 18 years, the JCI correction only occurred in the semester I - 2008 of 14.44%, semester I - 2015 of 6.05%, and semester I - 2018 of 8.75%.

 

All sectoral indices weakened in the first semester. In order, weakening was led by the sector; Property (-35.9%), Agriculture (-31.1%), Various industries (-28.5%), Basic industries (-25.6%), Finance (-21.9%), Infrastructure (-21.6%), Trade (-21.0%) , Mining (-20.4%), Manufacture (-19.4%), and Consumer goods (-12.5%). Meanwhile, LQ45 also weakened -25.2%.

 

This decline also occurred in state-owned companies (SOE's), it was noted that all SOE's that were monitored had poor price performance because their prices depreciated amid the COVID-19 pandemic. The details can be seen in Figure 2.

 

JCI

On Friday’s trading session (07/03), JCI rose by +7,0 points (+0.1%) to 4,973,8. The total transaction volume reached 6.7 billion shares, while the transaction value was recorded at Rp6,1T. Foreign investors booked a net buy of Rp93,4B, resulting in a net sell of Rp16,1T (YTD).

 

Sectors that gained were led by Mining (+2.07%) and Basic Industry (+1.80%), Manufacturing (+0.52%). Meanwhile, the sectors that experienced the highest weakness were Property (-1.56%), Miscellaneous Industry (-0.36%) and Agriculture (-0.32%). Stocks that supported the JCI were HMSP (+3.4%), CPIN (+6.2%) and BYAN (+12.2%). By contrast, the stocks that weighed on JCI were SMMA (-6.9%), UNVR (-1.9%) and TLKM (-0.6%).

 

U.S. NEWS   

U.S. stocks closed at Friday (3/7) in observance of Independence Day

 

MACRO UPDATE

THE GOVERNMENT RAISES JPY 100 BILLION BY ISSUING SAMURAI BOND

The Government managed to raise JPY 100 billion (Rp13.5 trillion) through the issuance of yen-denominated bonds or known as Samurai Bonds. The funds will be used to balance the mounting fiscal deficit, including the handling and recovery from Covid-19 pandemic. In this emission, the Government issues five series of bond, namely:

  • RIJPY0723 with principal of JPY 50.7 billion (Rp6.8 trillion), coupon 1.13%, and three years maturity (due on 7 July 2023),
  • RIJPY0725 with principal of JPY 24.3 billion (Rp3.28 trillion), coupon 1.35%, and five years maturity (due on 8 July 2025),
  • RIJPY0727 with principal of JPY 10.1 billion (Rp1.36 trillion), coupon 1.48%, and seven years maturity (due on 8 July 2027),
  • RIJPY0730 with principal of JPY 13.4 billion (Rp1.8 trillion), coupon 1.59%, and ten years maturity (due on 8 July 2030), and
  • RIJPY0740 with principal of JPY 1.5 billion (Rp202 brillion), coupon 1.80%, and twenty years maturity (due on 6 July 2040).

Besides, the basis of investors is more diversified, consisting of city banks (18.6%), life insurers (7.0%), property insurers (1.6%), asset managers (29.1%), Shinkin banks/regional banks (6.7%), pension funds (2.5%), and others (34.5%).

 

INDUSTRY  UPDATE

THE MINISTRY OF SOE PLANS TO MERGE STATE-OWNED SHARIA BANKS

After previously having established a holding company for SOE hospitals, the Ministry of SOE also plans to merge all state-owned sharia banks and pension funds into a holding. The goals of this consolidation are to make ease of supervising, more professional management, bigger economies of scale, and wider financing options. Planwise, the consolidation will be conducted gradually and be started in 1Q21. The sharia banks intended to merge are PT Bank BRIsyariah, Tbk. (BRIS) with a total assets of Rp42.2 trillion, PT Bank Syariah Mandiri with assets Rp114.7 trillion, PT Bank BNI Syariah with assets Rp51.1 trillion, and Sharia Unit of Bank BTN with assets of Rp28.8 trillion. (All assets were as of March 31, 2020.)

 

THE GOVERNMENT TO DEPOSIT FUNDS IN REGIONAL BANKS

After previously having deposited funds amounting to Rp30 trillion in four state-owned banks, the Government is said to place another deposit in some regional development banks (BPD). With a mechanism similar to the previous state-owned banks, regional banks will be able to restructure loans and to expand the original deposits. Some of the aforementioned regional banks are BPD Jawa Barat (BJBR), Bank DKI, Bank Jateng, and BPD Jatim (BJTM), with a total deposit of more than Rp10 trillion.

 

COMPANY UPDATE

PTPP AIMS TO BOOK A REVENUE OF RP20T THIS YEAR

PT Pembangunan Perumahan (Persero) Tbk (PTPP) aims to reach a revenue of Rp20T this year. As of May 2020, PTPP has realized a new contract value of Rp7.5T, which improves the order book to Rp64T. As several projects were delayed during the large scale social restrictions (PSBB), the Company is hopeful to resume the halted projects in mid-June. 

 

UNVR CLOSED ITS PLANT DUE TO THE CORONAVIRUS PANDEMIC

PT Unilever Indonesia Tbk. (UNVR) closed its Cikarang plant after 19 of its employees were contracted by the coronavirus. However, UNVR has made sure that UNVR’s product availability in the market will not be affected, as inventories are still sufficient. 

 

S&P GLOBAL DOWNGRADED MDLN’S RATINGS

S&P Global Rating downgraded PT Modernland Realty Tbk. (MDLN)’s rating to CCC- from CCC and assigned CreditWatch with negative implication. The assigned CreditWatch reflects its strained cash balance, weakened ability to pay debts, and possibility of restructuring. As additional information, MDLN has Shelf Registration Bonds I Phase I Year 2015 amounting to Rp150B that will be due on July 7. In addition, MDLN is also required to pay a coupon for its Dollar-denominated bonds in August and October 2020. S&P Global Rating could further downgrade MDLN’s rating to selective default if the Company fails to refinance its bonds.  

 

TOTAL BULL SHIP CAPACITY INCREASED

PT Buana Lintas Lautan Tbk (BULL) received the seventh Long Range 2 (LR2) tanker this month. Previously, BULL received three tankers (253,801 DWT) in 1Q20. The new tanker is expected to increase the effective carrying capacity by 142%. The Company’s total effective capacity increased by 20% in 2Q20. BULL also bought a mid-cycle tanker with a higher margin and stable contract agreement to reduce business risks. It also succeeded in developing the tanker capacity from 202,782 DWT in 2013 to 2.3M DWT this year. BULL's operating income and net profit increased to USD43.1M and USD 19.7M in 1Q20, respectively. The new vessels and TCE rental prices are estimated to contribute fully to the company's revenue in 2Q20.

 

PZZA OPENED THREE NEW OUTLETS IN 1Q20

PT Sarimelati Kencana Tbk (PZZA) opened three new outlets located in Banyuwangi (East Java), Cilacap (Central Java), and Padang (West Sumatra) in 1Q20. PZZA also actively increases its Company’s products sales through the Take Away Delivery in collaboration with Gojek and Grab (food delivery). Previously, PZZA opened its outlets (90%) after the Government issued new normal policy in June 2020 by implementing the strict Covid-19 health protocol. It posted an increase in net sales of 5.91% (Y/Y) from food sales to third parties (+ 11.59%, Y/Y) in 1Q20. However, beverage sales decreased by 30.73% (Y/Y). The Company's net profit was eroded at 84.96% (Y/Y) as a result of the policy of implementing Large Scale Social Restrictions (PSBB).

 

 

TECHNICAL OUTLOOK

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

JCI closed slightly higher at 4,973. 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).

 

Sun July 5Th, 2020

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