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Morning Dew 10 October 2019

FOKUS

AUGUST  2019, RETAIL SALES DECELERATED

According to the Retail Sales Survey by Bank Indonesia, retail sales in August 2019 still grew positively, recorded at 216.6 or lower than the 2.4% (yoy) compared to July 2019. Other Household Equipment supported the index with growth of 8.3% (yoy) or higher 4.0% (yoy) compared to the previous month. 

 

The Central Bank of Indonesia also estimated that Retail Sales in September 2019 would improve to 215.2 or grow by 2.1% (yoy). RSI growth was driven by Food (9.4% yoy), Beverages (2.7% yoy) and Cigarettes (0.3% yoy). In addition, three cities in Indonesia, including: Makassar, Banjarmasin, Surabaya recorded RSI growth above + 20% (yoy).

 

RSI growth up to 3Q19 is expected to reach 1.8% (yoy) and all commodity goods surveyed by the Central Bank of Indonesia are expected to decline when compared to 2Q19, especially Clothing (-1.0% yoy), Automotive Fuel (-6, 6% yoy), and Cultural and Recreational Goods (-6.8% yoy). The Retail Sales Index (RSI) in the next 3 months (November 2019) may increase but the Retail Sales Index (RSI) in the next 6 months (February 2020) is expected to decrease. The Price Expectation Index (PEI) in the next 3 months stood at 140.0 and in the following 6 months at 168.2.

 

JCI

JCI was closed down by 10.4 points or -0.17% to 6,029.2. Total transaction volume arrived at 15B shares or equivalent to transaction value of Rp 7.7T. Foreign investors recorded a net sell of Rp 33.32B, yielding YTD net foreign buy of Rp 51.7T.

 

Four sectors strengthened, led by agriculture (+1.67%), mining (+0.92%), and infrastructure (+0.60%). Meanwhile the weakening was led by consumer goods (-1.07%), miscellaneous industry (-0.94%) and manufacturing (-0.84%). Stocks supporting JCI included BBRI (+0.8%), TPIA (+2.5%), and TLKM (+0.7%). In contrast, stocks burdening the JCI were ICBP (-3.2%), UNVR (-1.2%), and BRPT (-4.8%).

 

U.S. NEWS

U.S. stocks bounced up for first time in three days amid trade hopes for an easing of trade tensions between the U.S. and China, with high-level trade talks set in Washington this Thursday & Friday. Cited from Bloomberg and Financial Times, China was open to a limited tariff resolution with the U.S. and has offered to increase by 50% purchases of agricultural products from U.S. farmers. The DJIA fell rose 0.7%, to 26,346.28, the S&P 500 gained 0.91%, to 2,919.47 and the Nasdaq Composite added 1.02%, to 7,903.74.

 

U.S. Treasury yield rose, pushing price lower as the Fed is largely expected to cut rates for a third time later this month by another 25 bps to a range of 1.5% to 1.75%. The 2-year notes were down 2/32 to yield 1.46%. The 30 -year bonds fell 24/32 to yield 2.08%. The Benchmark 10-years notes fell 12/32 to yield 1.58%.

 

Oil prices slightly rose, Brent crude up by +0.09% to $58.29/barrel and WTI crude went up +0.04% to $52.65/barrel

 

COMPANY UPDATE

SRIL SENIOR UNSECURED NOTES OBTAINED BB-/STABLE RATING

Fitch Ratings assigned BB- rating with a stable outlook on the proposed US dollar-denominated senior unsecured notes of  PT Sri Rejeki Isman Tbk (SRIL). Three of SRIL subsidiaries, i.e. PT Sinar Pantja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya will be the guarantor over the notes. Fitch views that the SRIL credit profile will remain and in line with the rating given as the usage of the notes will be mainly utilized to refinance USD 175M senior unsecured notes maturing in 2021. Another significant debt maturity of SRIL will be in 2022 with a value of USD 350M in the form of a syndicated loan. SRIL has options to make a maximum 2-year extension subject to the lender's approval.

 

AKRA HANDED  103HA LAND FOR RENT

PT AKR Corporindo Tbk.  (AKRA) handed 103 ha land located in Java Integrated Industrial Port Estate (JIIPE), Gresik, East Java to PT Freeport Indonesia for renting. The usage will be for concentrate processing. The construction of the smelter has reached 3.8% with target completion in 2023.

 

WSBP WILL ISSUE RP 1.5T BOND

PT Waskita Beton Precast Tbk (WSBP) will conduct a Public Offering of Phase I Year II 2019 Sustainable Bonds worth a maximum of Rp 1.5T. Bonds worth Rp 1.32T will be guaranteed with full capability with a term of 3 years and a fixed interest rate of 9.75% / year, and the balance of Rp175.8B will be guaranteed with the best ability. Fitch Ratings Indonesia assigns a BBB + rating for this bond. The public offering period will be conducted from October 24-25, 2019 with the listing date on the IDX on October 31, 2019.

 

DSNG ELEVATES ITS PKS CAPACITY

PT Dharma Satya Nusantara Tbk. (DSNG) has just completed the construction of the palm oil processing plant (PKS) in West Kalimantan with a capacity of 30 tons/hour. Therefore, the total capacity of the total of 10 plants become 540 tons/hour. Eight plants are located in East Kalimantan, one in Central Kalimantan, and the newest one in West Kalimantan. Besides processing plant, the company also owns one kernel crushing plant with a daily capacity of 300 tons. DSNG is also elevating the capacity of its PKS in East Kalimantan to double to 60 tons.

 

TLKM IN COLLABORATION WITH GARENA AND SHOPEE

PT Telkom Indonesia Tbk (TLKM) through its subsidiary in collaboration with Sea Limited or Garena which is the largest gaming company in Southeast Asia, and Shopee to provide convenience, especially for 180 million TLKM customers in accessing the Shopee and Garena digital platforms with various advantages.

 

TECHNICAL OUTLOOK

JCI is POSITIVE with expected range of 5,980 - 6,080

JCI inched lower to 6,029. Candlestick just bounced up from lower BB line toward MA line. EMA 5, 20 50 still in death cross pattern, just waiting confirmation to form golden cross pattern, while Parabolic Stop and Reversal red dot still appear. MACD start to positive, while RSI and Stochastic flatened. Support lays at 5,767 while the resistance hangs at 6,086/230.

 

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

 

BSDE

Support            1,300

Resistance        1,400

Target Price      1,440

 

PTBA

Support            2,120

Resistance        2,500

Target Price      2,410

 

TKIM

Support            9,700

Resistance        10,750

Target Price      10,500

 

PGAS

Support            1,955

Resistance        2,290

Target Price      2,200

 

EXCL

Support            3,250

Resistance        3,600

Target Price      3,555

 

 

           

 

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 October 10Th, 2019

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