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Morning Dew 24 September 2019

FOKUS

INFLATION OF NON-OIL & GAS WHOLESALE PRICE IN 8M19 WAS 0.14%

The non-oil & gas wholesale price index in 8M19 advanced by 0.14% to 167.78, with the highest hike was at non-oil & gas export at 0.54%. Y/Y basis, the inflation of non-oil & gas wholesale price was 1.66%. The rising commodity prices occurred to red chili, cayenne pepper, oil palm, cattle, goats, and sheep, as well as both animal and vegetable fats and oil. 

 

In general, the non-oil & gas construction wholesale price index hit 143.38 or grew by 0.07% M/M or 2.77% Y/Y. Based on its types, the other constructions experienced the highest growth of 0.11%, while the residence & non-residence construction grew the least at 0.07%. Top five construction materials price which inflated the most were backfill (0.45%), brick (0.34%), roof tiles and others (0.25%), gravel & sand (0.18%), and cement (0.18%).

 

JCI

JCI started this week’s trading by losing -25.27 points (-0.41%) to 6,206.19. The total trading volume during the session was 15.0B shares with a value amounting to Rp7.9T. Foreign investors posted a net sell of Rp185.6 billion, bringing the YTD net foreign buy to Rp53.7T.

 

Only two sectors strengthened: miscellaneous industry (+0.60%) and finance (+0.03%). The remaining sectors ended in the red zone, mostly dragged by basic industry (-1.72%), property (-1.65%), and manufacturing (-0.62%). Stocks supporting the JCI were UNVR (+2.5%), BBCA (+0.6%), and PGAS (+5.1%). On the other hand, stock weighing down JCI were HMSP (-2.6%), TLKM (-0.9%), BMRI (-1.1%).

 

U.S. NEWS

U.S. stocks ended mixed as investors weighed downbeat data on eurozone manufacturing activity in September fell to a nearly seven years low of 45.6 in September and coupled with the news that Chinese officials played down the significance of last week’s cancellation of visits to U.S. farm states. The DJIA was up 0.06% at 26,950.26, the S&P 500 was down 0.01% at 2,991.79. The Nasdaq Composite dropped 0.06% at 8,112.46. 

 

U.S Treasury yields fell, the benchmark 10 years notes gained 12/32 to yield 1.7111. Two-year notes were up 3/32 to yield 1.6709. 30- year bonds rose 25/32, yielding 2.1630%.


Oil prices rose, as Saudi Arabia has reportedly restored around 75% of crude production lost in the attacks that initially disrupted 5.7 million barrels a day of Saudi oil production, or about 5% of world output. Brent crude oil rose by +0.33% to US$64.49 per barrel, while WTI up by +0.7% to US$58.49 per barrel.

 

COMPANY UPDATE

BRMS’ UPCOMING PRODUCTION OF GOLD, ZINC, AND BLACK TIN

PT Bumi Resources Minerals Tbk (BRMS) is planning to produce gold coming from a gold mine in Palu, Central Sulawesi with an initial annual production of 100,000 tons. It is expected that the production could reach 180,000 tons (+80%) IN 2020. The mining age is approximately 7 years. It is expected that the company will need capex of US$ 10-15M for initial production. As of 1H19, the revenue jumped 258.85% to US$ 2.96M. The bottom line flipped compared to 1H18 of loss of US$ 10.72M, to become a profit of US$ 932,697. Furthermore, the company together with NFC China ( the majority partner) continue the production facility of zinc mine in Dairi which will need US$ 350-400M. The source of the fund may come from project financing. The production of zinc and black tin in Dairi is expected to start in 2022 with an initial volume of 200,000 tons of ore. Moreover, in 2023, the production is forecasted to hike to 500,000 tons of ore.

 

JPFA EXPORTS ITS PRODUCT TO TIMOR LESTE

PT Ciomas Adisatwa, PT Japfa Comfeed Indonesia Tbk (JPFA)'s subsidiary export 30 tons of frozen meat to Timor Leste with total value of Rp 1.1B. This was the first step, of which the second will be in Mid October with value of Rp 1.3B for 30 tons as well.  The products exported include boneless chicken, chicken nuggets, chicken meatballs. On 12 September, the animal feed division of JPFA also exported 40 tons of animal feed to Timor Leste. The second step of export will be conducted on Tuesday (24/09).

 

TBIG TO ISSUE GLOBAL BONDS US$650 MILLION

PT Tower Bersama Infrastructure Tbk (TBIG) plans to issue global bond or notes amounting to US$650 million. The fund raised will be loaned to its subsidiaries to repay their debts and to support business activities. The Company will seek approval from the shareholders at RUPSLB which will be held on 30 October 2019. 

 

ACES TO OPEN 12TH OUTLET THIS YEAR

PT Ace Hardware Tbk (ACES) announces its newest outlet opening on 25 September 2019 at Pacific Place Mall, Jakarta. With a total area of 1,700 meter square, this outlet will be the twelfth outlet opened this year. Including this outlet, ACES will own a total of 187 outlets.

 

KBLM DOUBLED ITS CAPEX TO INCREASE PRODUCTION CAPACITY

PT Kabelindo Murni Tbk (KBLM) increased this year’s capital expenditure allocation by 100% to Rp20 trillion. The capital expenditure will be used to increase the production capacity of low-voltage cable to 800 ton from previously 650 ton. To date, KBLM has absorbed 80% of the allocated capex. For additional information, as of 1H19, KBLM net profit soared 401% (Y/Y) to Rp12.15 billion.

 

AS OF SEPTEMBER 2019, VOKS HAS ABSORBED 75% OF CAPEX

PT Voksel Electric Tbk (VOKS) allocates US$7.5 million for capital expenditure which will be used to rejuvenate machineries and building as well as to produce high-voltage cable. As of September 2019, VOKS has absorbed 75% of total allocated capex. For additional information, VOKS has also entered retail segment by partnering with PT Ace Hardware Tbk (ACES) to supply electric cable. As of 1H19, VOKS recorded 40% (Y/Y) revenue increase to Rp1.44 trillion.

 

TECHNICAL OUTLOOK

JCI is NEGATIVE with expected range of 6,160-6,240

JCI inched lower to 6,206. The resistance hangs at 6,400/580 and support lays at 6,200/160. RSI still flat while MACD was negative. Stochastic cross up but still in the oversold area. Parabolic Stop and Reversal red dot still appears along with EMA 5&20 still in dead cross pattern. Hence, we are positive on today’s trading session.

 

ACES   

Support            1,650

Resistance        1,850

Target Price      1,900

           

ANTM 

Support            1,057

Resistance        1,167

Target Price      1,145

           

ASII

Support            6,590

Resistance        7,090

Target Price      7,025

           

KAEF   

Support            2,830

Resistance        3,200

Target Price      3,110

           

LINK    

Support            3,800

Resistance        4,250

Target Price      4,500

           

PPRE   

Support            340

Resistance        390

Target Price      390

           

PTPP   

Support            1,750

Resistance        1,810

Target Price      2,000

           

PWON 

Support            620

Resistance        640

Target Price      700

           

TLKM  

Support            4,200

Resistance        4,450

Target Price      4,500

           

TSPC   

Support            1,545

Resistance        1,700

Target Price      1,650

 

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 September 24Th, 2019

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