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Morning Dew 7 July 2020

FOKUS

CONSUMER CONFIDENCE INDEX REMAINED TEPID

In June, the Consumer Confidence Index (CCI) stood at 83.8, which improved from 77.8 in the previous month. The Consumer Expectation Index (CEI) rose to 121.8 from 104.9, while on the other hand, the Current Economic Condition Index (CECI) declined to 45.8 from 50.7. Overall, the Consumer Confidence Index in the 2Q20 remained tepid at 82.1, which lingers in the pessimism zone. The figure plunged from 117.7 in the 1Q20 and plummeted further from 127.6 in the 2Q19.

 

Consumers, according to the survey, remained pessimistic on the current national economic condition, as reflected in the weak CECI. One of CECI’ components, namely durable goods purchase index had the biggest drop of -7.2 points. In addition, consumers’ optimism on both current income and job availability also deteriorated in the wake of large-scale social restrictions. 

 

By contrast, Consumers expect that the economy will recover in the next 6 months, as reflected in the improved CECI. Income expectation index, job availability index, and business expectation index, as CECI’s components, jumped from the figures in May.

 

JCI

On Friday’s trading session (7/6), JCI strengthened by +15.1 points (+0.30%) to 4,988.9. The total transaction volume reached 7.9 billion shares, while the transaction value was recorded at Rp6.7T. Foreign investors booked a net sell of Rp547,4B, resulting in a net foreign sell of Rp16.7T (YTD).

 

All sectors gained except Property (-0.55%) and Infrastructure (-0.32%). Sectors strengthened were led by Mining (+1.45%), Agriculture (+0.99%) and Basic Industries (+0.93%). Meanwhile, stocks that supported JCI's performance were BBCA (+1.1%), CPIN (+7.9%), and BMRI (+1.5%). On other hand, the stocks that weighed on the JCI performance were SMMA (-7.0%), TLKM (-2.2%) and POLL (-2.2%).

 

U.S. NEWS   

U.S. stocks closed higher followed surging Chinese equity benchmarks to their best levels in at least two years and buoyed by strong rebound in the ISM Non-Manufacturing PMI (services industry) for the US jumped to 57.1 in June, the biggest monthly percentage-point increase on record, from 45.4 in May  and beating market consensus at 50.1. The DJIA rose 1.78%, to 26,286.83, the S&P 500 gained 1.59%, to 3,179.71 and the Nasdaq Composite added 2.21%, to 10,433.65.

 

U.S. Treasury yields rose, pushing prices lower fuelled by rising global equity markets, sapping appetite for safe-haven assets. The benchmark 10-year notes fell 3/32, to yield 0.68%. The two-year notes were flat to yield 0.16%. The 30-year bonds were 7/32 lower, yielding 1.44%.

 

Crude oil prices closed mixed as demand remained uncertain amid rising COVID-19 in the U.S halted the strong hopes of China’s perceived recovery from the COVID-19 pandemic. WTI crude down by -0.17% to US$40.58/barrel. Brent crude rose by +0.56% to US$43.04/barrel.

 

COMPANY UPDATE

TLKM’S VENTURE CAPITAL READY TO FUNDING 3-4 STARTUPS

The subsidiary of PT Telekomunikasi Indonesia (Persero), Tbk. (TLKM) in venture capital business, MDI Ventures, is standing by to take part in financing three to four startups in the near future. Besides, the company is currently in the finalization process to launch the Telkom Fund II worth US$300-US$500 million. MDI Ventures sees many opportunities to finance undervalued startups during the Covid-19 pandemic and is ready to take part in the seed funding to series B. Previously, MDI Ventures had also taken part in financing a furniture startup named Fabelio worth US$9 million in series C fund and an insurance technology startup named Qoala worth US$13.5 million in series A fund.

 

BRIS OBTAINED ADDITIONAL QUOTA FOR SME FINANCING UP TO Rp1.5 TRILLION

PT Bank BRIsyariah, Tbk. (BRIS) obtained additional quota for SME financing up to Rp1.5 trillion. This is due to BRIS having managed to reach its SME financing target in June 2020, which amounted to Rp2.8 trillion or 94% of FY20 target. The achievement was boosted by digital transformation that is currently undergoing in the company. Through a platform named i-Kurma, marketing officers are able to process financing applications anywhere using smartphones, significantly increasing productivity to an average of 98%. This year, BRIS is optimistic to be able to channel SME financing of Rp4.5 trillion to more than 50,000 customers in the food, agriculture, farm, medical tools, and drugs businesses.

 

KLBF ALREADY SPENT 60% OF CAPEX BUDGET

In a time when many companies hold expansion in favor of financial survival, PT Kalbe Farma, Tbk. (KLBF) keeps expansion plans going. As of 1H20, KLBF had spent Rp600 billion of capital expenditure or 60% of this year’s Rp1 trillion budget. The funds were used for relocating the plants of Bintang Toedjoe and Saka Farma to Cikarang, and for developing the warehouse of PT Enseval Putera Megatrading, Tbk. (EPMT) and Global Chemindo Megatrading. The remaining capex will be used for producing new products.

 

INAF, PEHA, AND KLBF TO LAUNCH NEW PRODUCTS

Three pharmaceutical companies are ready to launch new products in 2H20 to boost sales. PT Indofarma, Tbk. (INAF) is to launch six products in July 2020, i.e. TeleDoc, InBody test, emergency ventilator, medical-grade mask, hand sanitizer, and hemodialysis machine. This year, INAF targets sales to grow up to +27%, mainly backed by the launching of the new products. On the other hand, PT Phapros, Tbk. (PEHA) is also to release a new product in the form of an anti-aging serum. A result of cooperation with Universitas Airlangga, the serum is aimed at middle to high income consumers with a price of Rp1 million/bottle. PEHA is optimistic to reach a double digits growth in sales and net profit. Similarly, PT Kalbe Farma, Tbk. (KLBF) plans to launch one or two new products, i.e. supplement, with a hope of better sales in 2H20 compared to that of 1H20.

 

JIWASRAYA WILL SELL SHARE TO TASPEN

PT Asuransi Jiwasraya (Persero) will sell its subsidiary share (70%), PT Jiwasraya Putra, to PT Asuransi Jiwa Taspen (Taspen Life), a subsidiary of PT Taspen (Persero). Meanwhile, the remaining shares of Jiwasraya Putra (30%) are owned by PT Bank Tabungan Negara (Persero) Tbk (BBTN). The sales process is still in the process of finalizing to sign (conditional sales purchase agreement) of Rp2,6T.

 

KRAS CANCELLED ITS DIVESTMENT ACTION IN 2Q20

PT Krakatau Steel Tbk (KRAS) is estimated to divest in 3Q20 due to the Covid-19 pandemic. Previously, the divestment plan would be in 2Q20.Going forwards, KRAS will focus on increasing steel demand which experiences a weakness (-70%) in line with the easing of the Large-Scale Social Restrictions (PSBB) policy. KRAS posted a profit for the first time in 8 years amounting to US$ 74.1 million in 1Q20. it came from efficiency actions of US$130 million. The largest decrease in costs was contributed by cost of goods by 39.8% and administration & general costs by 41.5%.

 

GEMS WILL CONDUCT RIGHT ISSUE

PT Golden Energy Mines Tbk (GEMS) will increase its capital through a rights issue of 588.23 million shares or it is equivalent to 10% of paid up capital. Public ownership in GEMS shares is only 3.0% of paid-up capital and still below the free float limit set by the IDX (7.5%). GEMS will follow the free float requirements through this right issue action. GEMS share value is Rp100 per share. Meanwhile, it will conduct in 1Q21. GEM shares are dominated by Golden Energy & Resources Ltd (66.9%) while the remaining shares are owned by GMR Coal Resources Pte. Ltd (30%).

 

PBRX AND SRIL WILL EXPORT PPE AND MASK

PT Pan Brothers Tbk (PBRX) will export disposable PPE to the United States, Canada, Australia, and European countries, the Middle East and Asian region in July 2020. Previously, PBRX has exported masks which can be reused since April 2020. PBRX will also diversify the production of PPE clothing into a new business unit. It has a production capacity of 10 million masks and 30 million PPE clothes per month. Meanwhile, PT Sri Rejeki Isman Tbk (SRIL) will also export non-medical masks and PPE non-medical clothing to Germany, Japan and the United States. SRIL also plans to create a new business line, a health products business unit.

 

BBCA MAINTAINS THE FIRST POSITION OF INDONESIA'S MOST VALUABLE BRAND

PT Bank Central Asia Tbk (BBCA) re-entered the Top 100 Most Valuable Global Brands according to BrandZ in 90th position, up 9 levels from 2019. This award is a form of appreciation for companies that have the best brand value in the world. This achievement was obtained by BBCA because it succeeded in increasing the value of its brand in 2020 to reach US $ 14.9 billion, up 11% (Y/Y). For additional information, to date, BBCA serves 22 million customer accounts, supported by 1,252 branch offices, and 17,607 ATMs.

 

ACES OPEN A NEW OUTLETS AT THE PARK SAWANGAN DEPOK

PT Aces Hardware Tbk. (ACES) After previously on June 24, 2020, opening its new outlets in Queen City Mall Semarang, Central Java and May 12, 2020, in Living Plaza Pamulang, Tangerang, the company continued to expand in the midst of the COVID-19 pandemic by continuing to open its 10th new outlet opened in 2020 at The Park Sawangan, Depok, West Java on Friday, July 3, 2020. With the addition of these new outlets, the company's total outlets currently reach 205 outlets, wherein 2020 the company is targeting the opening of 15 new outlets.

 

PTPP WILL DIVESTS ITS ASSETS Rp1.2 T

PT Pembangunan Perumahan (Persero) Tbk. (PTPP) emphasized that through the bundling sales scheme, the company's efforts to divest will still be the main agenda this year. With this divestment, the company hopes to receive fresh funds amounting to Rp1.2 Trillion. In detail, the divestment plan consists of releasing company ownership in four infrastructure projects, namely;

  1. 14% shares of PT Citra Karya Jabar, concession owner and operator of the Cisumdawu Toll Road, with an estimated value of Rp50.25 Billion.
  2. 25% stake in PT Prima Multi Terminal or the Kuala Tanjung Port Multipurpose project, with an estimated value of Rp385.18 Billion.
  3. 15% of shares of PT Jasamarga Kualanamu Tol, concession holder and manager of the Medan-Kualanamu-Tebing Tinggi Cisumdawu Toll (MKTT), with an estimated value of Rp264.5 Billion.
  4. 25% shares of PT Jasamarga Pandaan Malang, concession holder and manager of the Pandaan-Malang Toll Road, with an estimated value of Rp555.61 Billion.

 

PPRO RECORDS Rp365 B MARKETING SALES  IN 1H2020

PT PP Properti Tbk. (PPRO) in the first half of 2020 recorded marketing sales of Rp365 B or only reached 14.6% of the FY2020 target of Rp2.5 T. For additional information, PPRO is currently in the stage of selling 30% of Aerocity's project at Kertajati Airport, West Java.

 

TECHNICAL OUTLOOK

JCI POSITIVE, WITH EXPECTED RANGE OF 4,950 to 5,100.

JCI closed slightly higher at 4,988 breached its nearest Resistance at 4,980, so the next Resistance hanging at 5,130/230 while the Support lay still at 4,880/745. PSAR red dot still appeared and hit the candlestick along with EMA 5&20 just forming a golden cross pattern. MACD leaning to positive along with Stochastic were curled higher. Only RSI showed a negative signal. Hence, our JCI remains positive from both technical analysis and global market sentiment.

 

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).

 

Mon July 6Th, 2020

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