The JCI December 30, 2020

𝐃𝐞𝐜𝐞𝐦𝐛𝐞𝐫 𝟑𝟎, 𝟐𝟎𝟐𝟎

* 𝐓𝐡𝐞 𝐉𝐂𝐈 𝐭𝐫𝐚𝐝𝐢𝐧𝐠 𝐫𝐚𝐧𝐠𝐞: 𝟓,𝟗𝟓𝟎𝐩𝐭 – 𝟔,𝟏𝟓𝟎𝐩𝐭 (𝐘𝐞𝐬𝐭𝐞𝐫𝐝𝐚𝐲 𝐜𝐥𝐨𝐬𝐞: 𝟔,𝟎𝟑𝟔𝐩𝐭)

* 𝐖𝐚𝐥𝐥 𝐒𝐭𝐫𝐞𝐞𝐭 𝐜𝐥𝐨𝐬𝐞𝐝 𝐥𝐨𝐰𝐞𝐫 𝐛𝐲 𝐬𝐨𝐦𝐞 𝟎.𝟑%,  𝐫𝐞𝐭𝐫𝐞𝐚𝐭𝐞𝐝 𝐚𝐟𝐭𝐞𝐫 𝐡𝐢𝐭𝐭𝐢𝐧𝐠 𝐚𝐧 𝐢𝐧𝐭𝐫𝐚-𝐝𝐚𝐲 𝐫𝐞𝐜𝐨𝐫𝐝 𝐡𝐢𝐠𝐡𝐬 𝐟𝐨𝐫 𝐦𝐚𝐣𝐨𝐫 𝐢𝐧𝐝𝐢𝐜𝐞𝐬, 𝐚𝐥𝐬𝐨 𝐨𝐧 𝐭𝐡𝐞 𝐬𝐜𝐫𝐨𝐥𝐥𝐢𝐧𝐠 𝐟𝐨𝐫 𝐔𝐒𝐃𝟔𝟎𝟎 𝐜𝐡𝐞𝐜𝐤 𝐚𝐢𝐝𝐬 𝐭𝐨 𝐀𝐦𝐞𝐫𝐢𝐜𝐚𝐧𝐬

* 𝐓𝐡𝐞 𝐉𝐂𝐈 𝐢𝐬 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐭𝐨 𝐟𝐥𝐮𝐜𝐭𝐮𝐚𝐭𝐞 𝐚𝐧𝐝 𝐭𝐨 𝐚𝐭𝐭𝐞𝐦𝐩𝐭 𝐡𝐢𝐠𝐡𝐞𝐫 𝐚𝐥𝐬𝐨 𝐛𝐞 𝐬𝐮𝐩𝐩𝐨𝐫𝐭𝐞𝐝 𝐛𝐲 𝐬𝐭𝐚𝐛𝐥𝐞 𝐔𝐒𝐃𝐈𝐃𝐑 𝐚𝐧𝐝 𝐨𝐢𝐥 𝐜𝐥𝐨𝐬𝐞

Morning,

The Jakarta Composite Index (JCI) today (12/30) is expected to be in the range of 5,950pt – 6,150pt, to fluctuate and incline higher , by-and-large also be supported by final window dressing activities as well as stable USDIDR and oil close.  Meanwhile, yesterday  (12/29), the DJIA closed lower by 68 points or 0.2% to 30,336pt, while the S&P500 and the Nasdaq both ended lower by 0.2% and 0.4%

Embracing the last trading day today in Jakarta, and tomorrow (12/31) in the United States, stakeholders in both markets as well as other major ones have seemed to agree on brighter outlook next year as compared to the year 2020, on several reasons as follows.  1) the successful COVID-19 serum innovation in the last quarter, 2) accomodative monetary and fiscal stance since the 1Q20, 3) point no.2 have been generally reflected in the 3Q20 improving economic activities through higher 3Q20 GDP growth , higher inflation rates, and stable to improving exchange rates.

However,  stakeholders in both markets also agree that major risks currently prevail that is, of COVID-19 virus variant, which is now very difficult to be quantified into growth estimates, in our view. In essence, cautious-optimistic still needed to be observed especially for trading-purpose equity holding in the markets.

𝐈𝐧 𝐭𝐡𝐞 𝐧𝐞𝐰𝐬:  𝐈𝐧𝐝𝐨𝐟𝐨𝐨𝐝 𝐒𝐮𝐤𝐬𝐞𝐬 𝐂𝐁𝐏 𝐒𝐮𝐤𝐬𝐞𝐬 𝐌𝐚𝐤𝐦𝐮𝐫 (𝐈𝐂𝐁𝐏) 𝐡𝐢𝐭 𝐛𝐲 𝐧𝐞𝐠𝐚𝐭𝐢𝐯𝐞 𝐬𝐭𝐨𝐫𝐲 𝐢𝐧 𝐆𝐡𝐚𝐧𝐚, 𝐀𝐟𝐫𝐢𝐜𝐚

The share price of ICBP went down by 1.9% yesterday, 4.1% in the week, 8.2% in month, and 8.4% in 3 months.  Local media credited the downward trend of the share price with a  punch on yesterday’s drop on  a negative news from Ghana, Africa.  ICBP share prices drop was linked to the news that has been circulating that men in Ghana use  “Indomie” instant noodle brand of ICBP as gifts for young women for their illegal transactional activities.

ICBP has been gearing-up export sales, including into several countries in Africa (please our report dated August 28 ).

ICBP has yet to make clarification on the matter, the notification of which is important, as the counter may be exposed to the risk of being excluded from Ethical Investing’s choice universe, should the news be prolonged unverified.

At present, we maintain our recommendation (please see our report dated August 28), and credited the downtrend of the share price to 1) investors’ current rotation into a V-shape recovery counters including that of commodities, 2) the uncertainty surrounding the purchase of 100%-stake on Pinehill Company Limited which was mainly financed through external debts. As of end of September 2020, net gearing ratio of ICBP increased to 51.9% as compared to net cash position on December 31 last year. At the other end, total consolidated sales during nine months to September 2020 recorded an annual growth 5.7%, while profitability margin are improvingly in-tact.  Gross margin at end of September was 36.4% (9M19: 34.3%), Operating margin at 19.0% (9M19: 17.7%), and net profit margins at 11.7% (9M19: 11.8%).

At the other end, yesterday  the WTI price closed higher  by  0.8% to USD48/barrel against the previous close on prospect of demand recovery as the United States moved toward expanding pandemic aid payments.  Meanwhile, the USDIDR  closed  at IDR14.169  vs. IDR14.184 the previous one.

We advise the following recommendations, for both trading and longer-time investment purpose. 𝐀𝐀𝐋𝐈, 𝐋𝐒𝐈𝐏 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘈𝘨𝘳𝘪, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘜𝘯𝘥𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵 ), 𝐔𝐍𝐓𝐑, 𝐈𝐓𝐌𝐆, 𝐀𝐃𝐑𝐎, 𝐏𝐓𝐁𝐀 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘊𝘰𝘢𝘭 𝘔𝘪𝘯𝘪𝘯𝘨, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵), 𝐆𝐆𝐑𝐌, 𝐔𝐍𝐕𝐑, 𝐈𝐂𝐁𝐏 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘊𝘰𝘯𝘴𝘶𝘮𝘦𝘳, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵 ), 𝐀𝐒𝐈𝐈 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘈𝘶𝘵𝘰𝘮𝘢𝘵𝘪𝘷𝘦, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵), 𝐚𝐧𝐝 𝐀𝐂𝐄𝐒, 𝐒𝐂𝐌𝐀, 𝐌𝐀𝐏𝐈 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘛𝘳𝘢𝘥𝘦, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵),𝐚𝐧𝐝 𝐓𝐊𝐈𝐌 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘉𝘢𝘴𝘪𝘤 𝘐𝘯𝘥𝘶𝘴𝘵𝘳𝘺, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵).

Cheers,