Logo Minnapadi
aboutusmpi.png
<< Back To Daily Report

Morning Dew 8 November 2019

FOCUS

INDONESIAN CAPITAL MARKET PERFORMANCE ON THE VERGE OF 2019 AND FORECAST IN 2020

2019 will soon be over. For investors, especially stock investors, market performance fell relatively short. As of November 6, 2019, Jakarta Composite Index (JCI) was only able to record a return of 0.37%. If we look at performance by sector, of the ten existing sectors, half experienced a strengthening and the rest fell. The sectors with the best performance was property, which recorded return of 12.9%, followed by basic industry (10.6%), infrastructure (9.6%), finance (9%), and trade (3.6%). The sector whose performance collapsed was led by consumer goods which dropped 18.5%, influenced by negative sentiment on the rise of cigarette excise tax which befell the two major companies of this sector, i.e. HMSP and GGRM. The decline also occurred in miscellaneous industry (-13.5), mining (-13.2), manufacture (-10%), and agriculture (-9.9%).

 

Actually, JCI had strengthened, especially at the beginning of 2019 and reached its highest point on February 6, 2019 at 6,547,877, an increase of 5.7% yoy (2018 at 6,194,498). JCI also touched its highest point on April 18th, the day after the presidential election. Indeed, the post-election situation in the country has been relatively more conducive. In addition, various BPS releases that show Indonesia's macroeconomic performance should be a positive sentiment for the market, such as ytd inflation of 2.2% and 3Q19 GDP growth of 5.02%.

 

Negative sentiments actually came from external. To name a few, the continuing US-China trade war which has not yet reached any deal. The latest was that the plan of the two countries to reach the first phase of the agreement must be postponed until December 2019. In addition to the trade war, the tug-of-war also takes place in the process of Britain's departure from the European Union or Brexit. Another sentiment is the possibility of recession in 2020.

 

Amid such situations, what are the prospects for the Indonesian stock market ahead? What sectors might be able to record solid performance so that it is worthy for investing? Considering that infrastructure development will still be one of the main agendas of the government, this sector is estimated to be still sexy to collect. In addition, for the short term before the closing of the year, the consumer goods, retail and transportation sectors are considered to have good prospects. Palm oil companies are also starting to get fresh air from rising prices and production volumes.

 

JCI

Yesterday, JCI declined by -0.84% or -51.9 pts to 6,165.62. Total volume transaction reached 10.26B shares, with a total transaction value of Rp8.31T. Foreign investors posted net sell of Rp1.36T, dragging down its YTD net buy to Rp46.3T.

 

Only two sectors advanced, which were led by basic industry (+0.88%) and property (+0.23%). The sectors dragging down JCI most severely were consumer goods (-1.7%), mining (-1.6%), and miscellaneous industry (-1.4%). Stocks supporting the gain were MPRO (+24.9%), SMMA (+4.0%), and CPIN (+2.1%). On the contrary, stocks weighing down the JCI were BBRI (-3.8%), HMSP (-2.9%), and ASII (-1.8%).

 

U.S. NEWS

The development of trade talks of U.S.-China positively impacted both DJIA (+0.66%) and S&P 500 (+0.27%) causing them to break the previous high record to 27,675.0 and 3,085.2, respectively. Furthermore, the trade deal progress also caused the dollar to appreciate against other safe-havens namely JPY and CHF.

 

For the same reason, treasury yield soared magnified by technical factors. The benchmark 10- year notes slipped 31/32 to yield 1.92%. Two-year notes decreased 4/32 to yield 1.61%. 30-year bonds were down 66/32 to yield 2.40%.

 

Brent and WTI crude climbed to US$ 62.10 (+0.58%) and US$ 56.86 (+0.91%), respectively after a glimmer of hope emerged for a resolution to the long disagreement between the U.S. and China. However, analysts lower the oil demand estimate due to worry about the excess of supply in 2020.

 

INDUSTRY UPDATE

ESDM CUT THE ICP TO US$ 59.82

The energy and mineral resources ministry (ESDM) revised down the Indonesian crude price (ICP) by 1.7% M/M to US$ 59.82/barrel due to sluggish demand associated with the slowing of the global economy. Compared to 9M19, the average crude oil prices in the international market subsided. Furthermore, in Asia Pacific region, diminishing crude oil prices is in line with increased refinery activity causing the supply to jump in several Asian countries.

 

COMPANY UPDATE

BNGA EXCELLENT STRATEGIES IN KPR FOSTERING

As of 9M19, the housing credit (KPR) of PT PT Bank CIMB Niaga Tbk (BNGA) rose to Rp 32.8T (12.6% Y/Y) due to several strategies application. Those were easy housing credit application and processing through online as well as video banking located in Digital Lounge, cross-selling (proposing housing credit to existing clients). The latest one is providing KPR XTra Spesial with a fixed interest rate in the first year and a special rate for credit costs. In developing this program, the company collaborate with developers namely Suvarna Sutera, Alam Sutera, Branz BSD, Damai Putra Group (Kota Harapan Indah, Segara City, dan The Royal Residence), Duta Putra Land Group (Bukit Golf Riverside), Sinarmas Land Group (Nava Park, BSD City, Banjar Wijaya, Grand Wisata, Kota Wisata, dan Legenda Wisata), Kota Baru Parahyangan di Bandung,  Jaya Metro (Bukit Kencana Jaya dan Pandanaran Hills di Semarang), etc.

 

WSKT AND PTPP REDUCED THEIR NEW CONTRACT TARGETS

PT Waskita Karya Tbk (WSKT) revised its new contract target of FY19. The contract target was toned down from initially Rp 55T to Rp 40 - 44T, and from the latter to Rp 35 - 40T because it only reached Rp 15.12T as of 9M19.  The bottom line as of September 2019 was Rp 1.15T (-69.3% Y/Y), while the target Rp 2-3T. The company is positive to record a positive cash flow coming from turnkey project payment with value Rp 24-26T. PT PP Tbk (PTPP) experienced a similar situation. The company revised its new contract downward from Rp 50.3T to Rp 45T. Additionally, they also cut both the top and bottom-line targets to Rp 28T (-6.7%) and Rp 1.5T, respectively.  

 

PPRE RECEIVED NEW CONTRACT

PT PP Presisi Tbk (PPRE) with PT Inti Pancar Dinamika (IPD) agreed to sign coal transportation road construction project in East and Central Kalimantan, with investment value of $160M. The 60-kilometer road will be connected with PT Adaro Energy Tbk. (ADRO) to transport its coal. It is expected to finish by the end of 2020.

 

BRMS AIMS TO PRODUCE 100K TON GOLD ORE

PT Bumi Resources Minerals Tbk. (BRMS) aims to produce 100k tons of gold ore in the first-year production, and starting from the second year to the seventh, the annual production target is at 180k tons of gold ore. From the Poboya mine, Central Sulawesi, the company will produce 150 kg of gold in the first year. The gold's grade of BRMS is 1.5 gram/ton. The wet run process of the gold mine is anticipated to begin in November 2019, while the production trial will still be next year (January).

 

TECHNICAL OUTLOOK

JCI is NEGATIVE with expected range of 6,100 - 6,300

JCI declined to 6,166. Resistance stood at 6,200, while support laid at 6,000. MACD entered the negative level, coupled with lower volume, could indicate downtrend. Thus, we think that JCI may be negative today. Apart from technical analysis, we are now closely monitoring on U.S. – China trade deal progress. Albeit uncertain, it was reported that U.S. and China agreed not to impose any additional tariff, which we think, could support today’s trading session.

 

ACES   

Support            1,650

Resistance        1,850

Target Price     1,900

 

ADRO

Support            1,250

Resistance        1,475

Target Price     1,450

 

EXCL

Support            3,250

Resistance        3,600

Target Price     3,555

           

LINK    

Support            3,800

Resistance        4,250

Target Price     4,500

 

PWON

Support            600

Resistance        690

Target Price     650

           

TLKM  

Support            4,200

Resistance        4,450

Target Price     4,500

 

UNVR

Support            42,600

Resistance        48,000

Target Price     45,500

 

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).

Fri November 8Th, 2019

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.