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Morning Dew 27 September 2019

FOKUS

CULLING EXTENSION

Circular letter no. 10301/SE/PK.230/F/09/2019 Directorate General of Animal Husbandry and Animal Health Ministry of Agriculture (Ditjen PKH) extends the policy of withdrawing fertilized hatching egg (HE) aged 19D from initially 2-20 September until 6 October 2019. Therefore, the total HE withdrawn heightened from 10M to 15M. Such a decision made due to broiler oversupply potential until the end of 2019.

 

The potential production of the broiler for FY19 (3.8M tons or 319,139 tons/month) is greater than the forecasted demand for broiler (3.25M tons or 270,979 tons/month) according to Ditjen PKH. As of 8M19, the oversupply hit 577,918 tons (7.29%) above the production of 2.33M tons. Even though the average price of livebird is starting to improve at around Rp 16,000. However, the cost of production between Rp 17,500-18,000 still exceeds the ASP.

 

JCI

JCI on Thursday (26/09) closed up to 6,230 (+839.9 points / + 1.37%). The total trading volume of 13.5 billion shares or Rp 8.2T. YCI finally recorded a foreign net buy yesterday of Rp 175.5B or Rp 52.3T (YTD).

 

Only the agriculture sector weakened (-0.31%), while all other sectors strengthened. Strengthening was led by various industry sectors (+ 2.61%), followed by infrastructure (+ 2.16%) and property (+ 2.03%). The stocks that most supported JCI were BBRI (+ 3.2%), BBCA (+ 2.1%) and TLKM (+ 3.3%). While those that burden are UNVR (-0.5%), PGAS (-3.1%), and INTP (-1.6%).

 

U.S. NEWS

U.S. stock indexes closed slightly lower as investors keep an eye on the decision by House Democrats to begin a formal impeachment inquiry into Trump amid a controversy over his interaction with Ukraine’s president. Moreover, the U.S. is unlikely to extend a waiver allowing American firms to do business with Chinese telecom giant Huawei Technologies Co. The DJIA fell 0.28% to 26,894.45, the S&P 500 fell 0.23% to 2,977.87 and the Nasdaq dropped 0.58% to 8,030.66

 

U.S Treasury yields fell as geopolitical jitters from U.S., Iran and the U.K. boosted demand for haven assets like U.S. government paper. The benchmark 10 years notes were 9/32 higher, yielding 1.70%. 2-year notes rose 1/32 yielding 1.66%. 30-year bonds were up 27/32, yielding 2.14%.


Oil prices rose as the Pentagon announced that it would deploy one patriot battery, four sentinel RADARs and approximately 200 support personnel in support of Saudi Arabia following attacks on its oil facilities earlier this month. Brent crude oil up by +0.56% to US$62.74 per barrel, while WTI rose by +0.11% to US$56.55 per barrel.

 

COMPANY UPDATE

AKRA FOCUSES ON BUSINESS EXPANSION

After liquidating its subsidiary, PT AKR Corporindo Tbk (AKRA) focuses on expanding its business in Indonesia. In addition, AKRA’ cluster Java Integrated Industrial and Port Estate (JIIPE) will be rented by PT Freeport Indonesia. AKRA has also operated gas power plant 23 MW, 112 Ha reclamation area, 500 meter port with 14 meter depth, and 430 meter bridge in 300 Ha of JIIPE, while for the phase II, AKRA will build industrial estate and add 500 MW capacity for its gas power plant.

 

Moreover, AKRA is working on partnership with British Petroleum (BP) to expand its fuel retailer business. The company plans to add another 10 gas stations for the remaining year.

 

PSAB ISSUED BONDS

PT J Resources Asia Pasifik Tbk (PSAB) issued Shelf Registration Bonds I Phase II 2019 with principal value of Rp500B. The 3-year bonds will have 10.5% interest rate and the first interest payment will be due on Dec. 25th, 2019.

 

BBRI ACQUISITION BRINS AT Rp 1.04T

PT Bank Rakyat Indonesia (Persero) Tbk. (BBRI) officially acquired 90% of PT Asuransi Bringin Sejahtera Artamakmur (Brins) shares worth Rp1.04T. With this acquisition, the company hopes to become a strategic step for the company to become integrated financial solutions. Furthermore, Brins will be directed by the company to go digital, go micro and go-customer centric.

 

SMRA WILL ISSUE RP 700B bond

PT Summarecon Agung Tbk (SMRA) will continue the issuance of Sustainable Bonds III with a target fund of Rp 3.5T, by issuing Phase II Bonds of Sustainable Bonds worth Rp 700B in October 2019. These bonds consist of 2 series, (Series A, Rp 500B - 9.12% - 3 Th), (Series B, Rp200 billion - 9.5% - 5 Th). The funds obtained will be used for working capital and subsidiaries of SMRA.

 

INDY INCREASED OWNERSHIP IN NUS 

PT Indika Energy Tbk (INDY) increased its share ownership in Nusantara Resources Ltd (NUS) to own 21.02% through the Australian Stock Exchange (ASX). This transaction is a strategic step for the company to increase ownership in NUS as one of the synergies of company diversification outside the coal mining segment. For additional information, NUS is a mineral mining investment company that is developing the Awak Mas gold mine project in South Sulawesi.

 

TECHNICAL OUTLOOK

JCI is POSITIVE with expected range of 6,200-6,300

JCI inched higher to 6,230. The support lay at 6,022 while the resistance hangs at 6,282/400. RSI curled higher along with MACD start to pisitive. Parabolic Stop and Reversal red dot still appears along with EMA 5&20 still in dead cross pattern. Stochastic still in the oversold area, but start to cross up along with candle stick breach the Bollinger Band lower band and forming white hammer body. Hence, we are Positive on today’s trading session, hopefully JCI breach its nearest resistance at 6,282.

 

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

           

PWON 

Support            620

Resistance        640

Target Price      700

           

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).

Fri September 27Th, 2019

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