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Morning Dew 9 July 2020

FOKUS

RETAIL SALES DECLINED BY 20.6% 

According to Bank Indonesia (BI) Retail Sales Survey (RSS), a Real Sales Index (RSI) in May 2020 reached 198.3 or contracted by 20.6% (Y/Y). Previously, IPR declined by 16.9% (Y/Y) in April 2020. The decline in sales stemmed from the contraction in sales across all commodity groups. The steepest decline was in the clothing sub-group and the cultural & recreational goods group (-74.0%, Y/Y), followed by the Cultural and Recreation Goods group (-53.7%, Y/Y), Spare parts & Accessories (-46.9%, Y/Y), and Vehicle Fuel (-45.4%, Y/Y). Moreover, the highest decline in retail sales occurred in Jakarta (-59.8%, Y/Y), Banjarmasin (38.3%, Y/Y) and Denpasar (33.5%, Y/Y).

 

Meanwhile, pressure on rising prices at retail traders’ level is reflected in the three- and six-months General Price Expectation Index (PEI) in August and November. It is predicted to be lower than IEH in July (162.6) and October (146.4) while IEH in August and November reached at 138.6 and 142.5, respectively. There was  a tendency to maintain selling prices and demand levels.

 

However, the RSI is projected to improve in June 2020 and reach 199.9 (-14.4%, Y/Y) because of the new normal policy. The improvement in retail sales performance mainly occurred in the food, beverage and tobacco and motor vehicle fuel group. On the other hand, inflationary pressures were projected to decline in the next three and six months (August & November 2020). The Retail Sales Expectation Index (SEI) in August and November are predicted to reach at 133.0 and 149.4 respectively, or higher than the previous month because of new normal policy.

 

JCI

On Wednesday’s trading session (7/8), JCI strengthened by +89 points (+1.8%) to 5,076.2. The total transaction volume reached 8.7 billion shares, while the transaction value was recorded at Rp9.3T. Foreign investors booked a net buy of Rp78.3B, resulting in a net foreign sell of Rp16.2T (YTD).

 

Only mining that declined by -0.1%. The sectors advanced, which were led by finance (+3.6%), basic industry (+1.7%), and manufacturing (+1.2%). Stocks that supported JCI's performance were BBCA (+3.5%), BBRI (+5.3%), and SMMA (+12.4%). On other hand, the stocks that weighed on the JCI performance were BYAN (-6.6%), DNET (-4.4%), and ARTO (-5.9%).

 

U.S. NEWS   

U.S. stocks closed higher as a surge in major technology shares overshadowed worries about increases in COVID-19 cases in the U.S. that surpassed 3.04 million. The DJIA rose 0.69%, to 26,067.62, the S&P 500 gained 0.78%, to 3,169.96 and the Nasdaq Composite added 1.44%, to 10,492.50.

 

U.S. Treasury yields rose, pushing prices lower, the benchmark 10-year notes are down 3/32, to yield 0.66%. The two-year notes were flat to yield 0.16%. The 30-year bonds were 3/32 lower, yielding 1.39%.

 

Crude oil prices rose as a rise in U.S. crude imports and a weekly fall in gasoline supplies suggested an improvement in energy demand. WTI crude up by 0.52% to US$40.83/barrel. Brent crude rose up by 0.35% to US$43.23/barrel

 

COMPANY UPDATE

WIKA REALIZED A NEW CONTRACT VALUE OF Rp3.1T

As of May 2020, PT Wijaya Karya (Persero) Tbk. (WIKA) realized a new contract value of Rp3.14T, which stemmed from the infrastructure segment (Rp1.1T), industry (1.6T), energy & industrial plant (Rp143B), and property & realty (Rp278B). The Company is now evaluating the Rencana Kerja Anggaran Perusahaan that is expected to finish in July. 

 

SMRA BOOKED A MARKETING SALES OF Rp1.1T

As of 1H20, PT Summarecon Agung Tbk. (SMRA) booked a marketing sales of Rp1.1T, which was largely contributed by housing sales (69% of marketing sales). The realization only reached 24.4% of FY20 target, but the Company has yet to revise the target at Rp4.5T.

 

CTRA REGISTERED A MARKETING SALES OF Rp2T

As of 1H20, PT Ciputra Development Tbk. (CTRA) registered a marketing sales of Rp2T, which represented around 30% of FY20 marketing sales target of Rp6.7T.The biggest contribution stemmed from residential projects in Jabodetabek. Going forward, the Company plans to launch new clusters in three residential projects: Citra Maja Raya with its Benoa cluster that is estimated to launch in August, Citra Raya Tangerang, and Citra Sentul Raya. Moreover, the Company also plans to revise this year’s marketing sales target, but the exact figure remains to be seen.

 

SRIL RESPONDED TO MOODY’S OUTLOOK

PT Sri Rejeki Isman Tbk. (SRIL) claims the company's financial performance has remained stable, including the Company's debt levels. SRIL management also stated that the Company had a healthy debt condition in 1Q20, which was reflected in the ratio of interest debt to the total assets (stable, 55%). Meanwhile, the Company’s syndicated debt which must be paid in 2022 can be automatically extended to 2024. SRIL explained that the company's interest debt increased in 1Q20 due to working capital (raw materials) needed for the next 3 months. It also confirmed that the Company can manage the debt ratio and capital structure amid fluctuations in the global economy. Previously, Moody’s decided to give a negative outlook for SRIL, however, the company's rating is still Ba3.

 

BBNI RECEIVED STABLE OUTLOOK 

PT Bank Negara Indonesia (Persero), Tbk. (BBNI) and its Sustainable Bonds Phase 1 - 2017 received an idAAA rating from Pefindo. Meanwhile, Company’s MTN Subordinated I / 2018 received a lower rating ("idAA"). It is projected to experience a write-down due to non-viable conditions (Financial Services Authority Regulation number 11/POJK.03/2016). The Company's outlook is still stable which reflects a significant critical importance for controlling shareholders (the Government). Company’s business position and profitability are strongly supported by a strong composition of funding and liquidity. However, BBNI is faced with moderate asset quality and a decrease in ownership portion problem.

 

PEFINDO GIVES AA RATING TO FAST

PT Indonesian Rating Agency (Pefindo) ranked PT Fast Food Indonesia Tbk (FAST) an idAA with a stable prospect until July 1, 2021. FAST's market position in the chicken-fast food restaurant segment is estimated to be strong in Indonesia. It also has a well-diversified outlet location and a very strong financial profile. However, these following risks would be faced by FAST: fierce business competition, franchise agreements, capital structure and the risk of PSBB policy. FAST is projected to pay long-term loans.

 

TECHNICAL OUTLOOK

JCI POSITIVE, WITH EXPECTED RANGE OF 4,980 to 5,120.

JCI closed higher at 5,076 breached its nearest Resistance at 5,048 so the nect Resistance hanging at 5,130/230 while the Support at 4,975/880. PSAR green dot just appeared along with EMA 5&20 just forming a golden cross pattern. MACD leaning to positive along with Stochastic and RSI were curled higher.

 

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).

 

Thu July 9Th, 2020

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