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Morning Dew 9 March 2020

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INDONESIA’S FOREIGN EXCHANGE RESERVES REMAINED HIGH

In February 2020, Indonesia’ foreign exchange reserve stood at US$130.4B, which is considered to be high enough; yet, the figure is lower than that of January 2020 at US$131.7B. The rosy position is equal to 7.7 months of imports or 7.4 months of imports and the government’s foreign debt service, sufficient to cover a standard of 3 months of imports. The Central Bank of Indonesia (BI) hopes that the Indonesia’ foreign exchange reserve is sufficient to support the external sector and maintain macroeconomy and financial system stability. Going forward, BI is hopeful that foreign exchange reserve remains adequate, supported by strong economic outlook.

 

JCI

JCI on Friday trading session (3/6) was closed sharply lower by -139.6 points (-2.5%) to 5,498. Total trading volume reached 4.99B shares, with a total transaction value of Rp6.7T. Foreign investors posted a net sell of Rp1.31T, resulting in the YTD accumulation of foreign net sale of Rp6.5T.

 

All sectors weakened, which were led by misc. industry (-4.96%), finance (-3.06%), and infrastructure (-2.56%). Stocks supporting the JCI were UNVR (+0.7%), STTP (+14.3%), and PLIN (+6.6%). In contrast, stocks weighing down the JCI were BBCA (-3.7%), BBRI (-3.4%), and BMRI (-4.6%).

 

U.S. NEWS  

U.S. stocks closed lower as investors continued to react to rising infections of COVID-19 and its effect on the economy and supply chains continued to hang over the market. Bank stocks that were hammered as benchmark interest rates plunged, and airline shares suffered a broad selloff as carriers cut or temporarily canceled flights in Italy and parts of Asia, and the latest things that being struck by COVID-19 were the plummeted oil price. All those things sent the benchmark 10-year Treasury yield carves out a new record low of 0.75%. 

 

The DJIA fell 0.98%, to 25,865.05, the S&P 500 lost 1.70%, to 2,972.4 and the Nasdaq Composite dropped 1.87%, to 8,575.62. For the week, the S&P rose 0.55%, the DJIA added 1.70%, the Nasdaq gained 0.06%.

 

U.S. Treasury yields fell. The benchmark 10-year Treasury yields plunged to historic lows and sees biggest weekly drop since December 2008, with was last down 0.75%, with the price rising to 1-22/32. The 30-year bonds rose 8-10/32, to a yield of 1.30%. On the short end of the curve, the 2-year notes were 4/32 higher, yielding 0.51%

 

Oil prices plunged and books biggest daily loss in more than 5 years after talks in Vienna on March, 5-6 between the OPEC and their allies collapsed, with Russia refusing to agree to a Saudi-led plan for additional crude production cuts by an additional 1.5 Mb/day. In response, Saudi Arabia over the weekend slashed crude prices and is preparing to increase production, in a direct attack against Russia’s market share. WTI closed lower by 9.24% to US$45.37/barrel, while Brent crude went down to -9.98% to US$41.32/barrel.

 

COMPANY UPDATE

TBIG WILL OFFER BONDS WITH RATE 6,25%

PT Tower Bersama Infrastructure Tbk (TBIG) will Sustainable Bonds III phase IV - 2020  with a principal amounting to Rp1,5Twith a public offering period from 18 March 2020 to 19 March 2020. It consists of two series: series A is amounting to Rp633B (6,25%/tahun) & series B amounting to Rp867B (7,75%/tahun). Fitch Ratings gave AA- rating for this bond. PT CIMB Niaga Sekuritas, PT DBS Vickers Sekuritas Indonesia & PT Indo Premier Sekuritas will be underwriter. 

 

PGAS WILL INVEST IN 3,000 LNG TRUCKS & LNG INFRASTRUCTURE

PT Perusahaan Gas Negara Tbk (PGAS) will invest amounting to US$1M (Rp14B). It will be used for LNG filling stations & Trucks LNG. PGAS will collaborate with the Indonesian Truck Employers Association (APTRINDO). This collaboration will last for one year and for the procurement of trucks itself takes 2 months to 3 months with the price of trucks reaching Rp1.2-1B. This infrastructure will become the LNG trucks path.

 

TLKM BUILD A MANDALIKA MOTOGP SUPPORT COMMUNICATION NETWORK

PT Telekomunikasi Indonesia (Persero) Tbk (TLKM) supports the Mandalika MotoGP event in West Nusa Tenggara (NTB) which will be held in 2021. TLKM inaugurates Lombok Modern Broadband Island and launches the construction of Information Communications and Technology (ICT) telecommunications network facilities.

 

BEEF REVISED CAPEX BECOME ≤ Rp200B

PT Estika Tata Tiara (BEEF) revised the 2020 capex plan from Rp240B to ≤  Rp200B. The revision was caused by changes in several scenarios that were originally going to be bought by the company and turned into leasing cooperation with third parties.

 

MMI AND JSMR TO ISSUE KIK-EBA SYARIAH

PT Mandiri Manajemen Investasi in cooperation with PT Jasa Marga, Tbk. (JSMR) will issue the first Asset-backed Securities (KIK-EBA) syariah in Indonesia with a fundraising target of Rp2.5 trillion. JORR Cilincing - Cikunir Toll Road is the underlying asset of this investment, which will be issued in 2H20. Planwise, JSMR will spend the funds on financing its other toll projects.

 

WTON’S 2020 TARGET

This year, PT Wijaya Karya Beton, Tbk. (WTON) expects to acquire a new contract value of Rp11.5T, which grew by +38% (Y/Y) from last year’s realization at Rp8.3T. Also, WTON estimates its 2020 revenue and net profit to reach Rp9.5T and Rp561B, respectively. To support the plan, WTON allocates a capital expenditure of Rp948B, which will be used for ramping up precast production capacity to 4.4 million tons, specifically, by establishing new plants in Boyolali, Pasuruan, and Balikpapan.

 

META’S PLAN IN 2020

PT Nusantara Infrastructure, Tbk. (META) plans to add 5 new toll roads, one of which is Ulujami - Jatiasih (22 km) and the other four remain to be disclosed. In addition, META plans to develop its business portfolio in energy and clean water segments. As it stands, META is in the process of acquiring 3 new clean water companies, potentially adding its portfolio to 7 clean water companies. Moreover, META is now completing its two new projects, which are MicroHydro Power Plan for energy segment and A.P Pettarani elevated toll road in Makassar for infrastructure segment. Going forward, META estimates its revenue to grow by a CAGR of around +10-12% (Y/Y) in 5 years, supported by allocated capital expenditure of Rp1.5-2.2T.

 

WSKT NOW OWNS A STEEL PLANT

PT Waskita Karya, Tbk. (WSKT) through its subsidiary PT Waskita Karya Infrastruktur (WKI) has finished the development of a steel plant in Modern Cikande Industrial Estate, Serang, with initial installed capacity of 4,000 tonnes/month or equal to 40,000-50,000 tonnes/year. With that capacity on hand, WKI targets to acquire new contracts amounting to Rp1 trillion. The development of the plant is to meet WSKT’s 500 KV electric transmission project in Sumatera.

 

TECHNICAL OUTLOOK

JCI IS NEGATIVE, WITH EXPECTED RANGE OF 5,200 to 5,500.

JCI was closed lower at 5,498. The Resistance hanging at 5,750/845, while Support lays still at 5,330/245. PSAR green dot still appeared along with EMA 5, 20&50 still in dead cross pattern. MACD flattened but leaning to negative along with RSI and Stochastic still curled lower to negative. The Candlestick bounching down from the middle Bbline and heading to the lower Bbline.

Hence, from technical analysis, our JCI is NEGATIVE and coupled with the NEGATIVE foreign sentiment.

 

ADRO

Support            1010

Resistance        1587

Target Price      1500

 

MIKA

Support            1890

Resistance        2940

Target Price      2850

 

TPIA

Support            7050

Resistance        8400

Target Price      8500

 

SIDO

Support            1220

Resistance        1315

Target Price      1355

 

BRPT

Support            950

Resistance        1300

Target Price      1220

 

ELSA

Support            210

Resistance        390

Target Price      380

 

ACES

Support            1440

Resistance        1890

Target Price      1800

 

KLBF

Support            1170

Resistance        1690

Target Price      1500

 

AKRA

Support            2380

Resistance        3320

Target Price      3050

 

BJBR

Support            810

Resistance        1400

Target Price      1270

 

 

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 March 9Th, 2020

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