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Morning Dew 8 October 2019

FOKUS

LOWER FOREIGN EXCHANGE RESERVES

As of September 2019, Indonesia foreign exchange reserves stood at US$124.3B, lower than August’s US$126.4B. The position equals to 7.2 months of imports or 7.0 months of both imports and government’s foreign debt payments. Bank Indonesia views that FX position is sufficient enough to support external sectors as well as preserve macroeconomic and financial system stability.

 

Lower figure was due to declining oil & gas foreign exchange receipts and other receipts. Going forward, it is expected foreign exchange reserves to remain solid on the back of better economic outlook.

 

JCI

JCI was closed lower by -60.7 points or -1% to 6,000.6. Total transaction volume reached 17B shares, equaling to transaction value of Rp7.4T. Foreign investors recorded net buy of Rp144.8T, resulting in YTD foreign net buy of Rp51.9T.

 

All sectors retreated, which were led by basic industry (-2.51%), manufacturing (-1.75%), and consumer goods (-1.47%). Stocks supporting the gain include BBCA (+0.4%), BTPS (+4.9%), and PSAB (+13.5%). On the contrary, stocks weighing down the JCI were UNVR (-3.1%), TLKM (-1.9%), and BBRI (-1.3%).

 

U.S. NEWS

U.S. stocks closed lower after Chinese officials have expressed reluctance to hammer out a broad agreement when they meet U.S. counterparts in Washington Thursday and Friday. Vice Premier Liu He, would arrive for discussions in Washington with terms for a deal that won’t include “commitments on reforming Chinese industrial policy” or “government subsidies.” The DJIA fell 0.36% to 26,477.07, the S&P 500 lost 0.45% to 2,938.63 and the Nasdaq dropped 0.33% to 7,956.29.

 

U.S. Treasury yields roses as the US$78 billion in note and bond supply slated for auction helped push prices lower, while the investors will be keeping an eye on fresh economic data released this week and the coming U.S. Treasury debt auctions of 10-year and 30-year paper on Wednesday and Thursday. The two-year notes fell 4/32 to yield 1.46%. The Benchmark notes were down 13/32 to yield 1.56% and the 30-year bonds fell 27/32 to yield 2.05%.

 

Oil prices went up as OPEC production fell to 28.45 Mb/d in September, down 1.48 Mb/d from August-the biggest month-on-month fall in almost 17 years. Brent crude rose +0.19% to $58.48/barrel and WTI crude went up +0.21% to $52.92/barrel

 

COMPANY UPDATE

MIND.ID ABSORB 20% INCO DIVESTED STOCK 

The Ministry of Energy and Mineral Resources, the Ministry of Finance and the Ministry of SOE appointed MIND.ID (Mining Industry Indonesia) to absorb 20% of the shares to be divested by PT Vale Indonesia Tbk (INCO). The next process will be done Business to Business (B to B) between MIND.ID and INCO. As additional information, in accordance with the amendment to the INCO Contract of Work, a company affiliated with the Brazilian mining corporation. Vale SA, required to divest 20% of its shares no later than five years after the Contract of Work amendment, in October 2014. MIND.ID itself is an SOE oversees five mining companies, namely PT Aneka Tambang Tbk (ANTM), PT Bukit Asam Tbk (PTBA), Freeport Indonesia, Indonesia Asahan Aluminum (Inalum), and PT Timah Tbk (TINS).

 

WSKT TO CANCEL BONDS ISSUANCE

Waskita Karya (WSKT) has confirmed to cancel 2-year and 5-year bonds issuance worth Rp3.5T in 2019. WSKT entrusted 6 underwriters, including: PT Bahana Sekuritas, PT BNI Sekuritas, PT Danareksa Sekuritas, PT Mandiri Sekuritas, PT DBS Vickers Sekuritas Indonesia and PT Indo Premier Sekuritas. WSKT has not confirmed the reason behind the cancelation. The Shelf Registration IV Waskita Karya Bonds Phase I 2019 - with A- rating by PT. Pemeringkat Efek Indonesia (Pefindo) - was initially intended to finance 500 KV transmission in Sumatra and civil, building, and EPC works.

 

ZONE TO CONDUCT PRIVATE PLACEMENT

PT Mega Perintis Tbk (ZONE) plans to conduct private placement by issuing 79.7M shares, maximum, or 10% of paid-in capital.

 

SMRA TO USE INTERNAL CASH FOR REPAYMENT

PT Summarecon Agung Tbk (SMRA) will use internal cash to pay obligation with maturity date in 10 october 2019. The obligation repayment phase I - Phase II amounting to Rp 800B and Sukuk Ijarah phase II worth Rp 300B, both was issued in 2014. According to SMRA’s financial report, the company still has available cash amounting to Rp1,52 T.

 

ADMF ISSUED BONDS

PT Adira Finance Tbk (ADMF) has succeeded in issuing Shelf Obligation Bonds IV Phase VI worth Rp1.19T, which includes Series A (6.75% - 1 year), Series B (7.8% - 3 year), and Series C (8.1% - 5 year). Pefindo affirmed idAAA rating for the bonds.

 

TECHNICAL OUTLOOK

JCI is NEGATIVE with expected range of 5,900 - 6,020

JCI inched lower to 6,000 breach the nearest support at 6,022. So the next support lays at 5,767 while the resistance hangs at 6,086/230. MACD still negative coupled with RSI curled lower breach the lower 30% line. Stochastic flattened and still in overbougt area. Hence, we are Negative on today’s trading session.

 

ACES   

Support            1,650

Resistance        1,850

Target Price      1,900

           

LINK    

Support            3,800

Resistance        4,250

Target Price      4,500

           

TLKM  

Support            4,200

Resistance        4,450

Target Price      4,500

           

 

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).

 

Tue October 8Th, 2019

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