Market Flash: iSHARES MSCI Indonesia Investable Market Index Fund (EIDO:US) PRICE: 28.530 USD Down -0.360 (-1.246%) >>> BI: Rupiah Melemah Akibat Kondisi Eropa >>> Pertemuan FED pertimbangkan langkah baru dorong ekonomi >>> KIJA akan Terbitkan MEN Valas USD150 Juta >>> PT Indika Energy Perusahaan Teladan Dunia 2011 >>> Govt Promises Revision of Cost Recovery Regulation >>> BPMigas Demands PGN to Pay US$6 per MMBTU >>> Jababeka to Raise US$150 Million from Debt Markets >>> SCG Chemicals buys Chandra Asri >>> Solusi Tunas eyes Rp380 bio IPO >>> SMR Utama scouts Rp300 bio IPO >>> Alam Sutera picks two bond arrangers >>> ASII Tetap Rajai Penjualan Mobil Agustus 2011 >>> Perusahaan Thailand kuasai Saham TPIA senilai Rp 3,76 Triliun >>> Agis Main ke Tambang, Sahamnya Masuk Dalam Pengawasan >>> ACES Mendekati The Northern Agar Mau Kurangi Kepemilikan >>> IHSG masih harus berjuang terus bertahan diatas MA200 >>> Melirik Peluang Akumulasi di Saham Perbankan >>> Analisa Saham BUMI: Kuat Bertahan & Berpeluang Kembali Uptrend >>> Analisa Saham JSMR: Bertahan Di Support, What Next? >>> INDF Tertahan Di Area Support Kuat, Berpeluang Rebound >>> ASII Break Minor Support, Sell on Strength >>> ADRO Membentuk Descending Wedges, Berpeluang Rebound Terbatas >>> Wall Street ends flat as early gains evaporate >>> Fed begins policy meeting, tiptoes toward easing >>> Fed meeting to help decide on long-term Treasuries >>> Greece Makes 'Good Progress' in Reform Talks: EC >>> China worried Europe debt crisis will hit trade >>> China could roll out 4.65tr yuan stimulus package >>> IMF sees Mideast stagnation >>> NYMEX-Crude ends higher at Oct contract expiry >>> Asian Crude Palm Oil Up On Technical Buying, Soyoil >>> Foreign net Sell - 61.785.746

Sabtu, 12 Februari 2011

DBS says no talks with Temasek on Indonesia's Danamon - Reuters

DBS , Singapore's biggest lender, said on Friday it had not held any talks with state investor Temasek on buying its 68 percent stake in Indonesia's Bank Danamon .

CEO Piyush Gupta told reporters DBS had not held talks with anyone on Bank Danamon.

There has been market talk that DBS, which wants to increase income from outside its core Singapore and Hong Kong markets, could be looking at Bank Danamon, but Gupta has dismissed the idea.

Analysts say Gupta probably wants to avoid expensive buys after DBS got its fingers burnt by overpaying for a bank purchase in Hong Kong a decade ago.

Palm futures rise on restocking - Business Times

CRUDE palm oil futures prices on Bursa Malaysia Derivatives closed firmer yesterday on restocking activities, amid a tightening supply, dealers said.

At the close, February rose RM16 to RM3,982 a tonne, March increased RM16 to RM3,970, April improved RM29 to RM3,955 and May gained RM18 to RM3,906.

Turnover declined to 24,092 lots from 35,028 lots on Thursday while open interests increased to 98,830 contracts from 90,858 previously.

On the physical market, February South increased to RM3,980 compared with RM3,970 previously.

RUBBER prices hit a fresh high in a very firm market yesterday, with SMR 20 and latex-in-bulk garnering global interest, dealers said.

A dealer said rising demand as opposed to supply shortage, made the highly sought commodity extend gains.

At noon, the Malaysian Rubber Board official physical price for tyre-grade SMR 20 rose 12 sen to 1,717.5 sen a kg while latex-in-bulk rose 6 sen to 1,056.0 sen.

Meanwhile, the unofficial seller closing price for tyre-grade SMR 20 added 4 sen to 1,717.5 sen while latex-in-bulk gained 5 sen to 1,058.5 sen.

THE Kuala Lumpur Tin Market (KLTM) reached a fresh all-time high yesterday, to close at US$31,500 (US$1.00 = RM3.05), up US$100 per tonne, amid a tightening supply, dealers said.

They said the market saw active participation from overseas buyers, especially the Europeans.

A dealer said the uptrend was also in line with London Metal Exchange, which also hit a new high of US$31,500 per tonne, up US$240, amid worries about supply from Indonesia.

"The market also saw participation from the Japanese and local traders," he said. KLTM turnover, however, was unchanged at 70 tonnes.

At the opening bell, buyers bid for 116 tonnes, while sellers offered 30 tonnes. The premium between the KLTM and the LME narrowed to US$420 per tonne from Thursday's US$560 per tonne. - Bernama

UNILEVER INDONESIA (UNVR): Parents tender offers Sara Lee – reit Take Profit! - Credit Suisse


· Ella Nusantoro (Daily attached): The holding company of Unilever Indonesia (UNVR.JK), Unilever Indonesia Holding BV (UIH), announced the tender offer of the remaining 10.65% stake of PT Sara Lee Body Care Tbk (SLBC), which has a value of Rp59.6 bn. UIH had previously acquired an 89.35% stake in SLBC for Rp499.8 bn, which is part of Unilever’s global acquisition of Sara Lee’s personal care division.

· The acquisition will lead UNVR to market and distribute SLBC products, whose main product is Zwitsal (baby products), where UNVR will earn distribution income. We believe that in the short term, this will have minimal impact, given that SLBC’s FY09 net profit (year-end 30 June) at Rp33 bn is less than 1% of UNVR’s. Longer term, we believe the acquisition will complement UNVR’s current brand portfolio (men’s hair grooming products and cologne) and will add a new category for UNVR (baby products).

· We maintain UNDERPERFORM with a TP of Rp14,650, implying 22.5x 2011E P/E with 18% earnings growth in next two years. We prefer Gudang Garam (Report attached) trading at undemanding 12.2x 2011E P/E.

GLOBAL EQ STRAT Report: Short-term Reduce GEM from 25% to 10% Overweight! - Credit Suisse

GLOBAL EQ STRAT Report: Short-term Reduce GEM from 25% to 10% Overweight!
iSay: I think Indonesia Sovereign rating upgrades into Investment grades will still have upside as Indonesia Country risk as No 21 of 51 countries, and this table is rightly pointing Egypt as no 12 most risky! Arief Wana reiterates Market Weight. At JCI 3,374pts, CS Indonesia Universe is trading on 12.8x 2011F on the back of +24% EPS Growth, still at Discount to 15x average forward market PER during 1992-1997. Please note strong buy signal will be upon 10-years Bond Yield = earnings yield, therefore assuming current 8.9% earnings yield then 11.2x 2011F PER as a Buy signal. Stocks that CS like and currently trade at circa 11.2x 2011F PER are BMRI (@Rp5,600- 10.0x), BBRI (@Rp4,550- 10.6x), ITMG (@Rp44,650-11.3x), BBNI (@Rp3,350- 11.3x), TLKM (@Rp7,650- 11.5x), EXCL (@Rp5,200- 11.6x), SMGR (@Rp8,300-12.2x), PTBA (@Rp19,300- 12.3x), INDF (@Rp4,675- 12.4x), ASII (@Rp48,250- 12.9x), GGRM (Rp33,950-13.0x), BORN (@Rp1,570-13.0x), and PGAS (@Rp3,950- 13.0x)!

· Andrew Garthwaite (Report attached): Headwinds for emerging markets lead us to reduce GEM weightings from 25% to 10% overweight on a two-month (i.e. tactical) view. Yet, we stress that on a 3- to 12-month basis, we remain 25% overweight. Tactical headwinds include: Economic lead indicators suggest a sharp deterioration of GEM IP momentum relative to developed markets; high food prices (a third of CPI) mean headline inflation may not peak until mid-year; capitulation in emerging markets is not yet advanced.

· We stay overweight of GEM strategically: We think emerging markets should be trading on a 20–30% P/E premium to developed markets (compared with a 10% discount currently), given: their superior trend growth (on the back of superior productivity growth); better balance sheets (government, private and banks); higher RoE versus cost of debt than the US; nominal GDP and EPS volatility in line with that of developed markets; and undervalued currencies (except for the Brazilian real and the Turkish lira).

· We think the call within GEM is now more important than the call on GEM, with country correlations at a four-year low. Russia, Korea and China are the cheapest markets on our P/E model and our GEM strategist Sakthi Siva’s preferred picks, while the most expensive is India. Indonesia has underperformed global markets by 20% since the beginning of Q4 2010. Indonesia remains fairly-valued.

PT Kalbe Farma Tbk – Strong Fundamental at Fair Relative Valuation - AAA Securities

Di 2010, KLBF berhasil membukukan pendapatan sebesar Rp10,2 triliun (+12% yoy). Efisiensi proses produksi, membuat biaya produksi tumbuh lebih rendah dibanding pendapatan. Selain itu, posisi net cash dan leverage yang rendah membuat pertumbuhan laba bersih meningkat 37% yoy. ROE naik dari 21,6% menjadi 23,7%. Tingginya ROE menjustifikasi level PE premium diatas peers.

Revenue Growth 12% yoy on Nutritional and Prescription Drugs Business in FY10
􀀻 Di 2010, KLBF membukukan pendapatan 2010 sebesar Rp10,2 triliun atau meningkat 12% yoy dari tahun 2009 sebesar Rp9,1 triliun. Pencapaian tersebut setara dengan 99%
estimasi konsensus sebesar Rp10,3 triliun. Bisnis distribusi dan logistik tetap menjadi kontributor pendapatan terbesar perusahaan sebesar 36% disusul bisnis obat resep 25% dan nutrisi 22% sementara OTC hanya menyumbang 22%. Namun demikian meski bisnis distribusi dan logistik menjadi kontributor pendapatan utama, dari segi ekspansi, bisnis dengan kinerja paling positif adalah bisnis nutrisi dan obat resep dengan pertumbuhan pendapatan masing-masing 18% yoy dan 16% yoy.

Ample Room to Grow
􀀻 Kedepan kami yakin bisnis nutrisi dan obat resep akan terus meningkat sebab saat ini untuk bisnis obat resep, KLBF mempunyai lebih dari 2.000 medical representative
dengan 100% penetrasi ke semua rumah sakit dan apotek di Indonesia. Sementara ruang
ekspansi KLBF di bisnis nutrisi masih sangat lebar sebab saat ini konsumsi susu perkapita Indonesia hanya 2,5 kg, jauh lebih rendah dibanding Malaysia 8 kg, Thailand 15 kg, dan Vietnam 3 kg. Lebih jauh lagi di 2010, konsumsi susu di Indonesia mencatat pertumbuhan paling tinggi 2,9% yoy sementara Malaysia -3,6% yoy ; Thailand +2,4% yoy ; dan Vietnam +2,3% yoy.

High Inventory Turnover and Low leverage Lead to Higher Net Profit
􀀻 Di sisi lain, pertumbuhan biaya yang lebih rendah +10% yoy dibanding pendapatan +12% yoy, menyebabkan gross margin meningkat menjadi 50,6% dari 49,7%. Rendahnya
pertumbuhan biaya lebih disebabkan oleh penguatan rupiah dan kontrol biaya antara
lain melalui outsourcing dan proses manufaktur yang lebih singkat sehingga inventory
turnover turun dari 125 hari di 2009 menjadi hanya 111 hari di 2010. Sementara itu,
kondisi perusahaan yang net cash, low leverage (interest bearing debt/equity, 0,5%) dan penurunan tarif pajak dari 28% menjadi 25% menyebabkan laba bersih melonjak 37% yoy ke Rp1,3 triliun, jauh lebih tinggi dibanding pertumbuhan pendapatan. Net profit
margin juga meningkat ke 12% dari 10%.

Valuation: Good Business Model Resilience Under Any Economic Circumstances
􀀻 Dibanding peers, KLBF tetap merupakan perusahaan dengan profitabilitas terbaik
dengan ROE 24,3% FY11F vs peers 22,3%. Dari segi bisnis model, revenue terdiversifikasi hampir merata dengan posisi kas / likuiditas tinggi. Dan playing field KLBF di industri farmasi juga mendukung potensi pertumbuhan yang kuat tiap tahun. Kami melihat justifikasi market saat ini sudah fair atas relatif tingginya ROE dan industri yang tahan terhadap inflasi. Sepanjang kurs rupiah tidak mengalami depresi terhadap dollar, margin akan terus mengalami peningkatan. Saat ini KLBF ditransaksikan di 14,0x PE dan 4,0x PBV FY11F.

Indonesia Market Strategy With a 9% drop, we recommend focusing on valuations - Credit Suisse

● On YTD basis, JCI has dropped 9% (11% from its peak), driven by, in our view: 1) technical factors – strong outperformance, BMRI’s rights issue, PT Garuda IPO, 2) inflation fears, and to a lesser extent 3) valuations. The market is now trading at 13.0x FY11E P/E, which is at a 15% discount to its 1992-97 average.
● Our ten-year bond yield has sharply risen to a ten-month high of 9.2% (from 7.5%). However, based on our analysis of the spread between bond and earnings yield, the spread is now back to its seven-year average and does not yet suggest a buying signal.
● In line with our call in the past three months and on YTD basis, the biggest underperforming sectors are cement (-16%), consumer (- 11%), and automotive (-10%), while the coal-related sector has been the biggest outperformer (+22%). We started to see some valuations of these domestic sectors getting attractive.
● Top six companies with P/E below the market (13.0x), strong management and balance sheets are Astra International, BMRI, BBRI, SMGR, TLKM, ITMG, and INDF

Key reasons behind the recent sell-off
After being one of the best performing markets in 2010, Indonesia’s JCI market has performed poorly so far this year, dropping 9% on a YTD basis and 11% from its peak due to, in our view, the three following reasons:
• Technical factors: Given the strong outperformance in 2010, we believe that Indonesia is vulnerable to any sell-off and redemptions both locally and regionally. In addition, the roughly US$1.2-1.5 bn rights issue of BMRI and the IPO of PT Garuda Indonesia, the country’s largest aviation company, added some pressure as well.
• Inflation fears and BI’s policy rate: While inflation fears have fuelled the sell-off in the market, we also believe that the decision from BI to maintain policy rate put Indonesia into negative real interest rates, making it slightly less attractive.
• Valuations: Based on our regional strategist Shakti Siva’s PBR-to-RoE model, Indonesia has fallen from being the second most expensive market (40% premium) to currently 7% premium to the region. On P/E basis, the Indonesia market is trading at 13.0x P/E vs an average of 15.3x P/E during the pre-financial crisis period of

Spread between bond yield and earnings yield does not suggest a buying signal yet
Due to the fear on inflation and sell-off in the bond market, Indonesia’s ten-year government bond has soared to the ten-month high of 9.2% from the low of 7.5% at the end of November 2008. The current spread between the ten-year government bonds and earnings yields is 1.3%, which is close to its long-term average of 1.5%. Based on our analysis on the spread, we found that the strong buying signal is when
the spread narrows close to zero (-1 standard deviation).

While the selling pressure in both bond and equity would put pressure on the ten-year bond, we do not believe that the bond yield will react a crisis-like periods of October 2008 (17.5%) and November 2005 (14.5%), especially given our view that Indonesia’s potential to be upgraded into investment grade is still on track over the next 12-18 months.

Recommendations: Reduce coal, add domestic sectors
Since we put out our strategy note back in 18 November 2010, entitled Re-rating continues, our Overweight call in coal and less on domestic stocks have done relatively well. In the past three months and on YTD basis, the biggest underperformers are cement (-16%), consumer (- 11%) and automotive (-10%) while metals and mining (largely coal)has been the biggest outperformer (+22%).

We therefore believe that some of the key stocks in the underperforming sectors are getting attractive from valuations standpoint. Based on our top 20 liquid names, Figure 3 shows the key stocks which trades below the market (13.0x) but have strong
management and balance sheet. They are BMRI, BBRI, SMGR, TLKM, ITMG, and INDF.

Asia Equity Strategy Foreign investor capitulation? - Credit Suisse

Net foreign selling in Emerging Asia (ex. China, ex. Malaysia)
Net foreign selling (US$ mn)
May-04 -2,444
Mar/ Apr 05 -4,530
Oct-05 -4,351
May-Jul 06 -14,451
Mar-07 -3,442
Feb-10 -2,598
May-10 -13,621
Average -6,491
Current -2,875
Source: Various stock exchanges, Credit Suisse estimates

■MXASJ down almost 7% from high, time to buy? With MXASJ (MSCI
Asia ex. Japan) down 7% from its high of 580 to 540 currently, a key
question is whether it is time to buy. Our Asian 6 factor valuation indicator
has moved from 1% overvalued in December 2010 to around 6%
undervalued. So, we are not yet at our “Buy” signal. The next factor we look
at is whether there has been foreign investor capitulation. Significantly,
yesterday alone was associated with US$1.68 bn of net foreign selling, and
so far in February we have seen net foreign selling of US$2.88 bn in
Emerging Asia ex. China, ex. Malaysia.

■Average net foreign selling in prior non-recession corrections was
US$6.5bn. Figure 1 highlights that net foreign selling in the current episode
of US$2.88 bn is still below the average net foreign selling of US$6.5 bn
during the last seven non-recession corrections.

■But foreign investor capitulation is most evident in Thailand. While
Thailand was associated with net foreign buying of US$1.9 bn in 2010, so far
more than half of this inflow has been reversed with net foreign selling of
US$1.16bn year-to-date. In contrast, net foreign selling in India at
US$1.34 bn appears small in the context of net foreign buying of
US$29.4 bn in 2010. Figure 2 also highlights that on a rolling 12-month basis,
Korea has received 28% of all flows versus its MSCI weighting of 36%, and
Taiwan has received 23% of all flows versus its MSCI weighting of 30%.
India continues to be the most crowded trade with 43% of all flows versus an
MSCI weighting of just 17%.

Economy: Investor confidence recovers after BI's rate hike - Mandiri Sekuritas

Market review
§ Foreign confidence improved as BI hiked interest rate to curb inflation. The rupiah has been strengthening around 1% to Rp8,930/US$ since the rate hike decision last Friday and foreign inflows continued into the bond market.
§ Yet, the JCI slipped 1.8% to 3,417 in the past 7 days. Better-than-expected US economy data and heightened political tension in the Middle Eastern countries prompted investors to temporarily reallocate some of their investment to safe-haven assets.

Global economic update
§ Recent developments in the US economy support the country’s momentum to rise after being hit by the financial crisis. In 2010, the economy grew 2.9%, consumer spending was the highest in years, and more people had gained jobs. The desired pace of recovery, however, is not yet achieved
§ The latest inflation figure indicated that inflation is continuing to build up in emerging Asia, raising expectations for further policy tightening

Domestic economic update
§ Indonesia’s GDP grew by 6.9% yoy in 4Q10, beating consensus estimate of 6.3% growth. For the full 2010, Indonesia’s GDP grew by 6.1%, as the country rode on global economic recovery.
§ Inflation remained high at 7.02% yoy in Jan11, driven by food price inflation. The central bank responded by hiking the benchmark rate by 25bps to 6.75%, yet we expect another 25-bp rate hike for this year in 2Q11.
§ BOP surplus rose 185% to US$11.3bn in 4Q10, backed by increase in commodity prices and improved capital account structure.

Lippo Karawaci – The only healthcare play (LPKR-BUY-IDR520-TP:IDR800) - Bahana Sekuritas

2011: More than doubling the number of hospitals to 9
Lippo Karawaci (LPKR) is currently the only healthcare play in Indonesia. Amid the current market weakness, we like LPKR for this defensive healthcare exposure, which we expect to account for 68% of its 2011 recurring income, up from 65% in 2010 (exhibit 8). This is supported by growing number of patients and average revenue/patient in the existing 4 hospitals (615 beds). In 2011, we expect to see LPKR’s number of hospitals grow to 9 with the first opening last month in Jambi-104 beds (East Sumatra), followed by Balikpapan–59 beds (East Kalimantan) in February, Tangerang–321 beds (Banten) in June, Mochtar Riady Comprehensive Cancer Center-364 beds (Jakarta) in July and Makassar–350 beds (South Sulawesi) in December. This will add 1,119 beds, bringing total number of beds to 1,734 beds with 2011 healthcare revenue growth of 19% y-y to more than IDR1.2t. As part of its 5-year expansion plan to add 25 more hospitals, LPKR will start building 2 new hospitals in Manado (North Sulawesi) and Palembang (South Sumatra) this year.

Healthcare to account for 33% of total 2011 revenue
Out of LPKR’s 2011 revenue of IDR3.7t, up 19% y-y, we expect healthcare to contribute 33%, followed by urban development (25%) and large-scale/high rise division (24%), which have obtained higher than expected revenue from the first 3 apartment towers at St. Moritz amounting to nearly IDR600b and another IDR311b from Kemang Village. We conservatively forecast lower 2011-12 net margins of 15.8-15.3% on higher construction cost stemming from higher commodity prices.

2011 marketing sales target: IDR3t, +35% y-y
LPKR booked strong 4Q10 marketing sales of IDR741b, up 16% q-q and 89% y-y (exhibit 7), stemming from apartment sales of IDR470b, +45% q-q, supported by the successful launch of the 5th apartment tower in Kemang Village (KV) with take-up rate of 81% valued at IDR276b. In 2011, we expect LPKR’s mixed used development projects to support marketing sales target of IDR3t, +35% y-y, driven by IDR1.5t apartment sales target, comprised of 3 new apartment tower launches and sales from the remaining units in the current 10 apartment towers in Kemang Village and St. Moritz. The remaining IDR1.5t marketing sales target (+29% y-y) will come from urban developments (residential, commercial and industrial), which has seen higher average land selling price of 16% in Lippo Village and 10% in Lippo Cikarang last month.

Balanced recurring income; Reiterate BUY with IDR800 TP
Greater recurring income from healthcare and commercial property is expected to persist in the coming years. Additionally, LPKR’s aggressive expansions are supported by its ability to raise sufficient funding through its asset light business model (sale and lease back). This has us reiterating our BUY call on LPKR with TP of IDR800, 52% discount to NAV.

Global Equity Strategy - GEM; Tactical headwinds, structurally sound - Credit Suisse

Headwinds for emerging markets lead us to reduce GEM weightings from 25% to 10% overweight on a two-month (i.e. tactical) view. Yet, we stress that on a 3- to 12-month basis, we remain 25% overweight.

Tactical headwinds include: Economic lead indicators suggest a sharp deterioration of GEM IP momentum relative to developed markets; high food prices (a third of CPI) mean headline inflation may not peak until mid-year; capitulation in emerging markets is not yet advanced.

We stay overweight of GEM strategically: We think emerging markets should be trading on a 20–30% P/E premium to developed markets (compared with a 10% discount currently), given: their superior trend growth (on the back of superior productivity growth); better balance sheets (government, private and banks); higher RoE versus cost of debt than the US; nominal GDP and EPS volatility in line with that of developed markets; and undervalued currencies (except for the Brazilian real and the Turkish lira).

The problem is inflation, but we find: (i) only Brazil, Argentina and India have severe overheating (and only India has an abnormally loose monetary policy); (ii) historically, emerging markets do not discount overheating becoming a problem until there are large current account deficits (India, Brazil and Turkey have mild current account deficits); and (iii) inflation historically had to rise above 7% for P/Es to contract.

Although developed market growth continues to surprise on the upside, we would note that: (a) GEM outperforms 86% of the time when global growth is accelerating (owing to its openness and commodity sensitivity); and (b) lead indicators in GEM relative to the US are already close to ten-year lows.

We think the call within GEM is now more important than the call on GEM, with country correlations at a four-year low. Russia, Korea and China are the cheapest markets on our P/E model and our GEM strategist Sakthi Siva’s preferred picks, while the most expensive is India.

The P/E premium of the indirect plays on the GEM consumer has fallen to 16% (back to the 2005–08 norm). We would focus on HSBC, Swatch, ABI, WPP, Coca-Cola.

Why the tactical downgrade?
We downgrade emerging markets from 25% to 10% for the following reasons: Historically, capitulation in emerging markets has happened at lower levels:
GEMs typically do not trough until three-month cumulative flows have been strongly negative (this would require another US$30bn of outflows); relative risk appetite has already corrected, yet historically current levels of relative risk appetite have been associated with GEM underperformance over the subsequent three months; finally, the average correction in emerging markets’ relative performance has been 18%, relative to 9% from the peak so far.

Year-on-year inflation in GEM is likely to peak in the middle of the year: even if food prices are flat from here, headline food inflation will not fall until the second half of the year. The threat in the near term is that food prices rise a little further especially given the drought in northern China (but our central case would be that food prices fall over the next six to twelve months).

Economic lead indicators suggest relative GEM IP momentum will slow sharply over the next months. However, when this has happened in the past, emerging markets have still managed to outperform.

No Deal on BDMN - JPM Indo

4 quick points:

- Danamon: CEO said they are not talking to Temasek, Temasek has not approached them and neither has any party approached Bank Indonesia - in short, no deal
- Very focused on what has been done and what needs to be done: getting systems and processes in place, reduce risk and continue collecting on low hanging fruits near term
- CEO admitted that at 8.4% RoE for 2009, bank was barely meeting its cost of capital. Now he is happy that they have at least started adding value, though barely, with 10.2% RoE for 2010, and much progress needs to be made
- SME and WM to move to exponential growth phase in 2H11, bank is taking its time to check and re-check all systems and processes before full fledged launch

Attached CEO PPT. All in all, a work-man like approach to the changes and full focus on execution and results. This bank is changing for real. Stock to be one of the top performers this year. Buy now.

Protelindo (TOWR IJ) - CLSA

Peter Egbertsen (Corp Finance Director) Adam Gifari (Predient Director)
While attendance was on the slightly light side, investors and colleagues alike walked out of Protelindo's presentation impressed. They are the largest independent tower company in Indonesia and see themselves as best positioned to grow over the next 5 years. Players in the tower business in Indonesia since Q2 2007, Protelindo have a portfolio of over 4800 towers and boast EBITDA margins of over 80%. They have a strong business platform for escalating growth with long term (10 year) non cancellable, unrevocable contracts meaning predictable and stable cash flow - and plenty of it.
Seeing significant growth in wireless subscribers, significant growth in MOUs. But what is getting them excited is the "explosion" in data growth, which means a rapidly rising need for tower space
Competitors face high barriers to entry and having been in the business for a while they are reaping the benefits of having first mover advantage
Going forward the team are looking at maximizing colocations on existing towers and seeing new builds. Their currently have 300 sites for telkomsel, XL and HCPT and expectations are for more. They spoke breifly about growth by acquisition but refused flatly to get into detail about what they are looking at, one should take comfort that any M+A will be eps accretive
Balance sheet looks pretty healthy as cash generation allows them to de-lever very quickly. They may go as high as 5x net debt/EBITDA, but are targetting 2x. Any concern on interest rate hike cycle in Indonesia is not a problem for them as they only have 110m in rupiah exposure, the rest of their debt is in USD, half of which is floating, balance fixed
Caveat here is liquidity. The stock trades a measley 0.18m usd a day (if that) and for both new and existing investors- this is an issue, free float is at a measly 11%. They will overcome this Either through M+A, or consider coming back to the market. Having said that, this is by default probably the most defensive stock in Indonesia right now

Gozco (GZCO IJ) - CLSA Indo

Gozco's management team presented to a room that is 3/4 full. The stock is compelling on many levels including attractive valuations, a decent balance sheet, strong management, but most of all - fantastic growth profile.

Projected FFB production to double to 500tons by 2015
Growth is coming from 2 key drivers: (1) more planted area coming into maturity - 40% of planted area is still in the immature stage which will start coming into maturity over the next 3 years. By comparison, a plantation that has been operational for a long time typically has 20% of planted area which is in the immature stage. (2) new plantings will add about 6500-9000 ha per year to total planted area. Total planted area is currently 32k ha so the incremental new planting is significant in the next few years
Management suggests that once they get to 50k ha of planted area, they will hit a sweet spot and their growth will be fantastic. That's less than 3 years away. The company has a remaining 95k ha of unplanted landbank so there is plenty of room for long term growth
The company has grown by M+A, making an acqn nearly every year since 2003. The focus is now on organic expansion. But the interesting thought is whether they themselves will be acquired since it is no longer easy to acquire new landbank and Gozco has a lot
Gozco is trading on PE 11x FY1 vs sector avg of 15x. It is one of the cheapest plantations stock in the sector but possibly the one with the best growth profile

Bumi Serpong (BSDE IJ) - CLSA Indo

Hermanwan Wijaya (Director) and Andreas Oen (IR Manager)

All the presentations given by property development companies at the CLSA ASEAN Forum have been very bullish, and Bumi Serpong was no exception. The story itself is very straight forward, with the company being one of the largest city developers in Indonesia, focusing on the development of BSD City as a Township in southwest Jakarta. The demand for townships is driven by the overwhelming mismatch in affordable accommodation Indonesia, with 200k in annual completions not nearly meeting household formation growth of 2.5M pa.

Management is not worried about rising interest rates in Indonesia, and perhaps rightly so given that interest rates are being lifted in 25bp increments, and the rate of inflation could be double-digit by the end of this year (CLSA forecast 12.5%). Whilst real rates remain this high, the outlook for property demand in Indonesia remains strong, and similarly, they are not expecting any pick-up in customer defaults (which is already at negligible levels). 50% of their customers use mortgages, 30% use financing provided by the company, and the remaining 20% pay cash.
The company locks in about a year’s worth of materials for construction, so increasing costs are not an issue right now. With property prices rising at 10-15% pa, it also means there is scope to absorb increasing costs. Gross margins on development are around 40-45%
Has significantly de-geared (now net cash). Not because of concerns over rising interest rates, but rather a change in the taxation law which sees them pay tax at the revenue line now, rather than after costs and interest payments. Hence, there is little incentive to carry expensive debt.
Despite earnings upgrades in the last 12 months, the stock has given back significant gains in the last 3 months. Even though the story is solid, so was the valuation, with the forward PE reaching almost 25x in October last year. The stock has sold off since then in line with the broader Indonesian market decline, and now trades closer to 16x. CLSA rates the stock a BUY with a price target of Rp1100

Bank Negara (BBNI IJ) - CLSA Indo

With the CLSA Asean forum entering into the second day , we give you the low-down on the today's presentation by Bank Negara.

Bank Negara (BBNI IJ):
Indonesia's 4th largest bank, with total assets of Rp224.8tn and a network of 1,112 branches
Low loan-to-deposit ratio of 68.5% implies strong loan growth can be supported from existing deposit base
Key competitive advantage lies in larges economies of scale, and strong relationship with local SOEs
Bank is improving its consumer-banking franchise, which should help drive higher CASA funding, implying a lower cost of funds.
BNI is currently undergoing a turnaround process, and has recently completed a US$1.2bn rights issue.

Daily 11 Feb 2011 (SMGR, LPKR, MAPI, POLY) - NISP Sekuritas

Semen Gresik membutuhkan tambahan 2jt ton batubara (SMGR, Rp8.300)
· Semen Gresik membutuhkan tambahan pasokan batubara sebesar 2jt ton untuk memenuhi permintaan pabrik Semen Tonasa V dan Semen Tuban IV yang diperkirakan akan sudah bisa beroperasi di tahun depan. Sampai sekarang perusahaan masih menyerap 3 juta ton untuk kapasitas yang ada.
· 30% batubara yang dipakai berkalori tinggi sementara 70% berkadar rendah dan menengah. 50% batu bara berkalori rendah beradasal dari Adaro Energi dan Medco Energy dengan durasi kontrak 2-3 tahun.
· Perusahaan menyatakan akan terus mempelajari cara menekan biaya produksi karena fluktuasi harga batu bara berkalori tinggi. Untuk tahun 2011, harga memakai kontrak yang ditetapkan pada 2010.
· SMGR diperdagangkan di PER 11,9x and EV/EBITDA 7,8x.

Lippo Karawaci terbitkan obligasi global US$125jt (LPKR, Rp520)
· Lippo Karawaci Tbk akan menerbitkan obligasi global US$ 125jt. Dana yang diperoleh akan digunakan untuk pembiayaan kembali obligasi perseroan yang jatuh tempo Maret 2011 dan utang jangka pendek lainnya. Obligasi ini mendapatkan peringkat B+ dari Fitch Ratings dan S&P.
· Menurut Presiden Direktur Lippo Karawaci Ketut Budi Wijaya. obligasi dikeluarkan dengan harga penawaran sebesar 108% dan mengalami kelebihan permintaan 6X (oversubscribed).
· Joint global coordinator merupakan Citigroup Global Markets Singapore Pte. Ltd. dan Deutsche Bank AG, Singapore Branch.
· LPKR diperdagangkan di PER 16,7x and EV/EBITDA 11,1x.

Mitra Adiperkasa menargetkan penjualan Rp5.67triliun (MAPI, Rp2.300)
· Mitra Adiperkasa menargetkan kenaikan penjualan sebesar 20% YoY dari Rp4,72triliun di tahun 2010 menjadi Rp5.67triliun di tahun 2011.
· Perusahaan akan menggunakan kas internalnya untuk membiayai belanja modal tersebut sebesar Rp350miliar.
· Ekspansi bisnis yang akan dilakukan di kawasan timur Indonesia (Makasar, Manado, Ambon dan Jayapura) dengan lini bisnis utama specialty store (perlengkapan olah raga, gaya hidup dan anak-anak).
· Perusahaan akan bekerja sama dengan PT Lippo Karawaci (LPKR, Rp520) untuk menambah gerai baru menjadi 670.000m2 per tahun 2015. Keduanya sepakat mengembangkan St. Moritz Shopping Mall Puri Indah dan Kemang Village Mall.
· MAPI diperdagangkan pada PER 13,5x dan EV/EBITDA 6,1x, konsensus 2011.

Asia Fibers mencetal Rp4,32tn pendapatan di tahun 2010 (POLY, Rp198)
· Aisa Pacific Fibers membukukan pendapatan sebesar Rp4,32tn di tahun 2010, atau 22.7% YoY lebih tinggi dari Rp3,52tn di tahun 2009. Pertumbuhan ditopang oleh kenaikan harga jual serat fiber dan benang sebesar 20%.
· Namun perusahaan memproyeksikan pendapatan akan turun tahun ini sebesar 6% YoY menjadi sekitar Rp4tn, karena harga minyak dunia lebih rendah disbanding tahun lalu. Harga jual perusahaan menyesuaikan dengan harga minyak. EBITDA diperkirakan akan naik menjadi Rp450miliar dibandingkan Rp306miliar tahun lalu.
· Pangsa pasar tahun ini diperkirakan tetap di sekitar 27% untuk serat fiber dan 21% di pasar benang. 75% target produk perusahaan adalah untuk pasar domestic.
· Perusahaan menganggarkan belanja modal sebsar US$6jt tahun ini untuk meningkatkan kapasitas produksi dari 180 rb ton fiber dan 140 rb ton benang.

Jumat, 11 Februari 2011

Let's pray for Garuda Indonesia IPO - Insider Stories

"Let's pray for Garuda Indonesia [GIAA] IPO today," a message from a banker sent to me yesterday.
According to the banker, no fully subscribe for Garuda IPO. "What executives and government officials said that a fully subscription in Garuda IPO seem to be political statement," the banker said.

Everyone in the market has already heard about efforts of the joint lead underwriters, Bahana Securities, Danareksa Sekuritas, and Mandiri Sekuritas, to sell Garuda shares. In fact, until the last day, they are still struggling.

However, one top executive of the lead underwriters still said that Garuda IPO is fully subscribe. Is it political statement or just to make Mustafa Abubakar, Ministry of State-Owned Enterprises, happy?

Garuda Kicks Off Stock Trading Today - The Indonesia Today

National flag carrier PT Garuda Indonesia Tbk (GIAA) is set to commence trading of its stocks on the Indonesian Stock Exchange (IDX) this morning.

Garuda lists 22.64 billion shares on IDX. The company offers 6.33 billion shares or 26.67% of total issued shares through an initial public offering (IPO) at Rp750 per share. The IPO includes 1.93 billion shares owned by PT Bank Mandiri Tbk (BMRI).

Garuda raised Rp4.75 trillion from the IPO, of which Mandiri's portion accounts for Rp1.45 trillion. At Rp750 per share, Garuda starts the trading with market capitalization of Rp16.98 trillion.

80% of total proceeds will be used for funding new fleet purchase and development while the rest is used for capital expenditure (capex).

Bakrie Group’s Ridwan Plans Indonesia-Focused Stock Hedge Fund - Bloomberg

Edwin Ridwan, who helped set up the proprietary equity trading desk of Bakrie Group last year, is seeking capital to start an Indonesia-focused hedge fund that will bet on rising stocks.

Ridwan, 41, is in talks with the Bakrie Group, a palm oil- to-property empire controlled by Indonesian billionaire politician Aburizal Bakrie and his brothers, to set up the hedge fund, he said in an interview from Jakarta. Siddharta Moersjid, a spokesman for Jakarta-based PT Bakrie & Brothers, said he couldn’t give any information at this stage.

“I’m hoping to raise this fund, if possible, with the Bakrie Group,” Ridwan said. “It’s tough to find seeders from the local market; most people don’t even know what a hedge fund is.”

HB Capital Partners’ Komodo Fund is currently the only Indonesia-focused hedge fund managed from Jakarta, according to funds tracked by Bloomberg. Bakrie & Brothers, the holding company for several listed Bakrie Group units, said in December 2009 that it planned to start new funds aimed at foreign investors.

The trading desk that Ridwan set up in November is investing Bakrie Group’s capital in equities and aims to eventually manage third-party money, he said. Ridwan said he hopes to start the fund, to be called Amandana Capital, within six months and is seeking $10 million to $15 million in seed capital, in return for a stake in the management firm or a share of the fees that it earns. He aims to raise $50 million to $100 million from investors during the fund’s first year, he said.

The fund will bet on rising prices of companies earning most of their revenue from Indonesia or have a majority of their assets there, he said. The companies the fund can invest in may include Singapore-based Petra Foods Ltd., the largest supplier of chocolate products to Indonesia, and London-based Churchill Mining Plc, owner of a thermal coal project in Indonesia. more ...

Nirwan Bakrie, coal & precious metal - Insider Stories

Bakrie Group in mid-November last year announced a shares swap deal between Vallar Plc (currently known as Bumi Plc), a company listed at London Stock Exchange, and PT Bumi Resources Tbk and PT Berau Energy Tbk worth Rp13 trillion. The swap deal is expected to complete by the end of this month. What Bakrie Group plans after that?
Here are the excerpts of an interview with the owner and controller of Bakrie Group, Nirwan Darmawan Bakrie, when he visited the cemetery of H. Achmad Bakrie in Karet Bivak Public Cemetery, today. The event was also to commemorate Bakrie 69th anniversary.

What is Bumi Plc plan after completing the shares swap deal at the end of this month?
Bumi Plc is a holding company owned by PT Bakrie & Brothers Tbk. They are obliged to enhance the company value and Bumi Plc management will penetrate everywhere.

Do they want to acquire mining assets?
Yes. They must develop assets by acquiring other mines. However, Bumi Plc management has not talked about the assets. They certainly have to develop their business.

What assets they are targeting?
Coal dan precious metal but the management itself has not held a board of directors and commissioners meeting. There is no referral to Bumi Plc and they are going to run the acquisition themselves.

What is the plan for PT Darma Henwa Tbk?
There is still no plan yet. They must continue to increase the production.

Is Darma Henwa eyeing the coal contract in Borneo Lumbung Energi?
There is still no contract.

Did you sell stakes PT Delta Dunia Makmur Tbk?
No. I didn’t sell Delta Dunia shares. It’s consistent right?

Stocks Cut Losses, IDX Composite Down 1.28% - The Indonesia Today

Composite index of Indonesia Stock Exchange (IDX) closed lower by 1.28% Thursday (Feb 10) after falling as much as 2%. Some blue chip stocks cut their losses in the afternoon session.

Some blue chip stocks turned positive. Semen Gresik closed higher by 2.47%, while Danamon and Astra Agro Lestari gained 1.63% and 0.23%. Astra International and Adaro Energy also closed flat despite substantial correction in the morning session.

Bank Central Asia dropped as much as 5%, but then closed lower by 3.4% only. Unilever also slashed 4% in the morning session, but closed lower by 2.33%.

The rest of the top 20 stocks closed in red. BRI declined 1.62% with over Rp250 billion worth of shares exchanged hands. Bumi Resources also down 1.89% with over Rp300 billion worth of shares exchanged hands.

Kalbe Farma and Ramayana Lestari, meanwhile, tumbled 4.39% and 5.33% respectively.

Banking stocks were mainly under pressure, except Danamon, CIMB-Niaga, and OCBC-NISP, which surged 8.2% and 6.5% respectively. Coal stocks also declined further, except Borneo Lumbung Energy, which bounced back with 1.29% gain.

Other markets closed mainly lower in the region, except All Ordinaries (+0.13%) and Shanghai (surged 1.62%). Bursa Malaysia tumbled 2.09%, followed by Hang Seng (-1.97%), Kospi (-1.81%), Straits Times (-1.64%), and nkkei (0.11%). BSE Sensex also closed lower by 0.76%.

Bumi to pay US$600 mio debt in Oct. - Insider Stories

Indonesia’s biggest thermal coal exporter PT Bumi Resources Tbk (BUMI) will pay US$600 million to China Investment Corporation (CIC) in October this year.
"Yes, we will settle US$600 million debt to CIC when it matures in October," said Ari Saptari Hudaya, Bumi’s President Director when he visited the cemetery of H. Achmad Bakrie in Karet Bivak Public Cemetery, today. The event was also to commemorate Bakrie 69th anniversary.

According to him, Bumi has no plan to issue new bonds to pay the loan.
“There is no plan for bond issuance. We will use the company’s internal cash,” he said.

The loan payment to CIC is part of the target to decrease the amount of Bumi’s debt amounted to US$1 billion this year.
CIC is one of the biggest creditors to Bumi Resources.
Bumi secured US$1.9 billion senior debt in September 18, 2009, from Country Forest Limited, a subsidiary of CIC.

The loan facility is divided into 3 commitments namely commitment A valued to US$600 million and mature in 4 years since the withdrawal.
Commitment B of US$600 million will mature in 5 years post-withdrawal and commitment C valued to US$700 million.
Meanwhile, the total internal rate of return (IRR) from the loan reached to 19%.

Charoen Pokphand Acquires Cipendawa Agriindustri for Rp20 Billion - The Indonesia Today

PT Charoen Pokphand Indonesia Tbk (CPIN), through its unit PT Charoen Pokphand Jaya Farm (CPJF), acquired 99.99% shares of PT Cipendawa Agriindustri (CA) for a total consideration of Rp20 billion.

The conditional sale and purchase agreement had been signed in 8 February 2011 by CPJF and PT Cipendawa Agro Lestari (CAL).

CA engages in breeding of one day old chicks for commercial, located in Cianjur, West Java.

The acquisition of CA aims to increase the CPIN's production capacity of breeding of one day old chicks for commercial through CPJF.

Pefindo naikkan peringkat utang BBNI menjadi double A - Kontan Online

JAKARTA. Peringkat obligasi PT Bank Negara Indonesia Tbk (BBNI) mengalami peningkatan.

PT Pemeringkat Efek Indonesia (Pefindo) menaikkan peringkat Obligasi BNI I tahun 2003 dari idAA- menjadi double A (idAA) dengan outlook stabil.

Pemeringkatan itu berlaku sampai dengan 1 Juni 2011.

Adapun, hingga pukul 15.25 WIB, saham BBNI turun 1,49% ke Rp 3.300 per saham.

Garuda Indonesia Prediksikan Investor Domestik Berpeluang Bagus - Antara News

Jakarta (ANTARA News) - PT Garuda Indonesia memprediksikan, investor domestik justru berpeluang bagus ketimbang asing untuk memburu lebih besar saham BUMN Penerbangan itu.

"Kalau menurut saya justru itu lebih bagus. Artinya, kesempatan untuk investor domestik memiliki Garuda akan lebih besar. Nantinya kan underwriter akan ambil dan jual ke domestik," kata Dirut PT Garuda Indonesia, Emirsyah Satar kepada pers, usai penandatanganan kesepakatan pengendalian gratifikasi dengan Komisi Pemberantasan Korupsi (KPK), di Jakarta, Kamis.

Penegasan tersebut terkait Terkait kabar yang menyebutkan, penawaran saham Garuda kepada investor asing tidak berjalan sesuai target.

Semula penawaran saham perdana Garuda kepada investor asing ditetapkan sebesar 20 persen, sementara sisanya ditawarkan ke pasar domestik.

Namun, dikabarkan pada penutupan jumlah saham perdana yang diserap investor asing kurang dari dua persen.

"Saya tidak risau. Yang penting underwriter sudah memastikan untuk menyerahkan dana IPO (initial public offering) sebesar Rp3,3 triliun kepada kami pada Kamis sore ini (10/2)," katanya.

Jadi, tegasnya, pihaknya akan membiarkan underwriter melakukan tugasnya sesuai kapasitas yang ada.

"Bagi kami yang terpenting, dana yang kita dapatkan akan langsung kita eksekusi untuk ekspansi usaha sehingga bisa meningkatkan kinerja perusahaan," katanya.

Pada roadshow IPO yang digelar perusahaan pada 13 hingga 24 Januari lalu di sejumlah negara, Garuda menargetkan untuk meraih investasi jangka panjang melalui para investor asing tersebut.

Namun, kata Emir, jika minat investor asing terhadap penawaran saham perdana rendah, diharapkan investor domestik besar dapat berpartisipasi dalam investasi jangka panjang.

"Di awal, kita memang targetkan investasi jangka panjang dari investor asing. Tapi, jika memang demikian, maka kita ingin investor domestik bisa lebih banyak berpartisipasi di `long term investment` agar dapat capital gain yang lebih besar," katanya.

"Senada dengan Emirsyah, Direktur Keuangan Garuda Elisa Lumbantoruan, mengaku, meski diterpa isu rendahnya harga penawaran saham Garuda, proses penjualannya berjalan normal.

"Yang kami tahu penjualan saham terpenuhi dan berjalan normal. Untuk berapa besar yang terdistribusi, kita tidak tahu, karena itu wewenang JLU (joint lead underwriter)," katanya. more ...

Saham Perdana Garuda Fully Subscribed - Republika

Saham perdana PT Garuda Indonesia terserap maksimal alias fully subscribed. "Pokoknya kami fully subscribed. Kami dapat Rp 3,3 triliun dan Bank Mandiri dapat Rp 1,4 triliun," ujar Direktur Utama Garuda Indonesia, Emirsyah Satar, saat ditemui di kantor Kementerian BUMN, Jakarta, Kamis (10/2).

Menurutnya, komposisi investor domestik dapat lebih banyak dibandingkan investor asing. Ia enggan menyebutkan secara komposisi kepemilikan saham perdana Garuda. "Komposisinya bagaimana, kami belum tahu. Besok saja ya," ujar Emirsyah.

Secara terpisah, Menteri BUMN, Mustafa Abubakar, mengatakan tidak bisa berbicara banyak terkait penyerapan saham perdana Garuda. Keterangan rinci hal itu merupakan domain pihak underwriter atau penjamin emisi. "Sesuai domain masing-masing. Tugas JLU (Joint Lead Underwriter) untuk menyampaikannya," lugas Mustafa.

Pemrerintah sebagai pemegang saham Garuda, katanya, senang atas penyerapan saham perdana Garuda. Hal itu membuktikan keberhasilan Garuda untuk go public.

Kementerian BUMN telah mematok harga saham perdana Garuda sebesar Rp 750 per lembar. Menurut Mustafa, harga saham tersebut terbaik dari kisaran harga Rp 750-1.100 per lembar saham.

Dengan harga tersebut, total dana IPO Garuda sebesar Rp 4,751 triliun. Dana tersebut dari pelepasan sebanyak 6,27 miliar lembar saham atau setara 26,67 persen saham. Sebanyak 3,3 trilun dana segar akan dikantongi Garuda dari pelepasan 4,4 miliar lembar saham. Sedangkan PT Bank Mandiri Tbk yang sahamnya ikut dilepas saat IPO Garuda akan mengantongi dana Rp 1,45 triliun dari 1,9 miliar saham.

Metrodata Dirikan Anak Usaha information & Communication Technology Retail -

PT Metrodata Electronics Tbk (MTDL) menyatakan telah mendirikan anak usaha bernama PT My Icon Technology (MIT) pada 9 Februari 2011 . Perusahaan tersebut bergerak di bidang usaha berupa information & Communication Technology Retail.

Manajemen dalam suratnya yang disampaikan ke BEI, Kamis (10/2) mengatakan di anak usaha tersebut perseroan memiliki saham MIT 99,99% saham secara langsung dan sisanya tidak secara langsung.

Anak usaha ini menyediakan produk-produk ICT secara retail dan langsung kepada konsumen selaku pengguna akhir. MIT didirikan dengan modal dasar sebesar Rp20 miliar serta modal yang ditempatkan dan disetor penuh sebesar Rp5 triliun.

Perseroan menjelaskan pendirian anak perrusahaan tersebut bukan merupakan transaksi benturan kepentingan dan juga bukan merupakan transaksi material.

Kamis, 10 Februari 2011

Unilever Indonesia Quick takes - A non-event - by Lydia Toisuta - CIMB

(UNVR IJ / UNVR.JK, NEUTRAL - Maintained, Rp15,000 - Tgt. Rp18,000, Consumer)

Maintain Neutral on Unilever with an unchanged target price of Rp18,000. Unilever Indonesia Holding BV (parent company) has announced a tender offer for Sara Lee Body Care Indonesia (SLBCI). SLBCI makes and distributes personal-care products, which should complement Unilever's product range. The impact on Unilever Indonesia's balance sheet and earnings should be minimal or
next to zero as the tender offer would turn SLBCI into its sister company rather than subsidiary. Our target price remains based on 31x CY12 P/E, +2.5x standard deviations from its average earnings multiple. Lower growth than peers, a lack of boost from bond yields and a widening earnings-yield gap amid rising inflation are reasons for our Neutral rating.

Telekomunikasi Indonesia Quick takes - Unexciting Telkomsel performance - CIMB

(TLKM IJ / TLKM.JK, NEUTRAL - Maintained, Rp7,800 - Tgt. Rp8,900, Telecommunications)

Telkom Indonesia remains a NEUTRAL with an unchanged DCF-based target price of Rp8,900 (WACC 12.2%) on the back of what appears to be an unexciting 4Q10 for Telkomsel. At SingTel's 3QFY11 results, the telco revealed that Telkomsel's EBITDA and operating profit were flat qoq. We estimate unchanged qoq revenue too, lagging XL's 4% qoq growth. Telkomsel only added 0.87m users,
substantially below what it had added in the previous two quarters and the figure for XL, despite its aggressive acquisition of customers. All in all, it does not appear that Telkom will positively surprise in 4Q10, and could in fact disappoint if its fixed-line operations deteriorate faster than expected. XL Axiata remains our top Indonesian telco pick.

IDX Composite Extends Fall, Hit by Regional Read more about Build - The Indonesia Today

Investors still continued selling their stocks, pushed further the composite index of IDX lower by 2% to 3,349.22 in the morning close.
In the blue chip stocks, Astra International slipped 0.31%, Bank BCA crashed 5.08%, PT Telkom dropped 2.56%, and Bank Mandiri tumbled 3.51%.

Banking stocks put as the most active shares trade in morning session. Bank BRI lost 1.08%, Bannk Bank Jabar Banten lost 1.75%, and Bank BNI dropped 2.24%, while CIMB Niaga jumped 3.83%.

Miners also lost ground, led by Bumi which lost 2.83%, Bukit Asam dropped 2.01%, Adaro declined 1.09%, and BNBR stood flat.

Other losers were Unilever (-4.33%), LPKR (-3.70%), MNCN (-3.37%), PGAS (-3.07%), and UNSP (-3.03%).

Regional index also puts themselves under pressure. Kospi tumbled 1.37%, Bursa Malaysia fell 1.01%, Straits Times lost 0.86%, Hang Seng declines 0.73%, BSE Sensex retreated 0.65%, and Nikkei slipped 0.12%. Meanwhile, Shanghai SSE jumped 0.78% and All Ordinaries inched 0.10%.

Company visits to Bank Danamon. (Tjandra Lienandjaja) - BNP Paribas

Price 6150, TP 7650, Mkt cap $5,856m, Avg t/o $4.5m

Loan growth is indicated at 31% in 2010, higher than our expectation of 26%. The growth came from the mass market segment, ie. motor cycle financing and micro lending to the non-agricultural based traders.

They also indicated that they were able to increase total deposits significantly in 4Q10, up IDR5t and this is translated into 11% y-y growth compared to 1% y-y in September 2010 and our forecast of 9% y-y for the year. They achieved this through utilization of DSP (micro lending) network by giving incentive to the sales people who used to channel loans only. As a result, CASA now account for 40% of total deposits, up from 33% in 2009. Their target is for CASA to reach 50% of total deposits by 2015, which will reduce cost of funds. This is a big challenge for the bank given that they do not have significant corporate banking customers, which tend to put their deposits in the same banks.

The bank expects NIM to decline to 10.5% in 2011 from 11.3% in 2010 due to rising incentive for motorcycle financing. In addition, cost of funds have risen with some of the large 14 banks breached the gentlemen’s agreement with the central bank to keep deposit rate in check. However, Adira will increase market share (15.7% for new motorcycle financing and 5.2% for new car 2009) to compensate for the lower margin.

On DSP the strategy will be the same as in Adira in which they will expand to cover for lower margin. Traditionally they concentrate on non-agribusiness traders but will start looking at agribusiness traders to broaden the market penetration. Not keen on corporate lending as yield is only 9% while cost of funds is 6-7%.

Network expansion is to add 150 in 2011 with 40-50 mobile banks in nearby the wet markets (currently Danamon has 250 mobile banks). Expansion for the DSP network will be more in outside Java to tap in new high-yield micro lending customers.

Bank Danamon will maintain the proportion of professional funding (bonds, repurchase agreement, MTN, bilateral loans and trade financing) at 15-20% of total funding. They issued 3-5 year IDR2.8t domestic bonds in December 2010 at 8.75-9% pa. The calculated LDR, which include these type of funding, leads to LDR of 93% compared to 112% straight LDR.

Cost of credits is expected to come down to 3% by 2015 from 3.4% currently through better credit control and loan expansion.

We will be reviewing our forecast, pending results announcement next week but maintain our BUY call for now. Catalyst for the counter is the issue of takeover by DBS, which was denied by DBS management. However, with DBS’ intention to increase its contribution from the region, this is not an impossible target (please refer to a note on DBS by Ng Wee Siang today). Large Indonesian banks have been acquired at the price of 2.5-4.7x historical book value.

2010E: Rec EPS 358, P/E 17.2, P/B 2.8, ROE 17.5, Yld 1.5
2011E: Rec EPS 455, P/E 13.5, P/B 2.5, ROE 19.4, Yld 2.9
2012E: Rec EPS 578, P/E 10.6, P/B 2.2, ROE 21.8, Yld 3.7

Agung Podomoro Bangun Pemukiman 47 Ha di Karawang - Detikfinance

PT Agung Podomoro Land Tbk (APLN) mengakuisisi 90% saham PT Pesona Gerbang Kawarang (PGK) yang memiliki aset tanah seluas 47 hektare (Ha). Area seluas itu akan dikembangkan menjadi kawasan pemukiman.

Seperti dikutip dari keterbukaan informasi di situs resmi Bursa Efek Indonesia (BEI), Kamis (10/2/2010), sisa kepemilikan 10% saham perusahaan yang berlokasi di kabupaten Kawarang tersebut bukan merupakan pihak yang terafiliasi dengan perseroan.

"Sehingga transaksi pembelian saham dalam PGK bukan merupakan transaksi afiliasi," kata Wakil Direktur Utama APLN Ariesman Widjaja dalam keterbukaan informasi tersebut.

Ia menambahkan, nilai pembelian saham tersebut tidak melebihi 20% dari ekuitas perseroan, sehingga penyertaan itu tidak termasuk sebuah transaksi material. Namun sayangnya, tidak disinggung nilai nominal dari pembelian saham tersebut.

Perseroan bersama anak usaha barunya tersebut berniat untuk mengembangkan kawasan itu menjadi pemukiman.

Foreign Investors Only Absorb 1.9% Garuda IPO Shares Read more about Foreign b- The Indonesia Today

After the close of offering on Wednesday (9/2), foreign investors had reportedly only bought 1.9% IPO shares of national flag carrier PT Garuda Indonesia, Bisnis Indonesia reported this morning.
The government had initially allocated 20% of Garuda IPO to foreign investors. As IPO price set at Rp750 per share, foreign investors' purchase only totaled Rp91 billion, compared to targeted up to Rp2.3 trillion.

This unsold portion by foreign investors will be absorbed by three underwriters (PT Bahana Securities, PT Danareksa and PT Mandiri Sekuritas).

Sources said in the last day of offering many foreign investors cancelled to buy Garuda IPO shares at the amount they had earlier subscribed.

Danareksa and Mandiri are reportedly ready to absorb unsold Garuda IPO shares but Bahana may only absorb by its capability. But based on IPO prospectus, all this three underwriters have a full commitment over Garuda IPO shares with fund allocation totaling Rp3.91 trillion.

The listing of Garuda IPO shares at stock exchange is set for tomorrow (February 11/2). Garuda will list 22,640,996,000 shares at stock exchange.

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Unilever Tender Offer Saham Sara Lee Rp 372,95 Per Lembar - Detikfinance

Unilever Indonesia Holding BV melakukan penawaran tender (tender offer) saham PT Sara Lee Body Care Indonesia Tbk (PROD) seharga Rp 372.950 per saham sebanyak 10,652% dari total saham, atau sebanyak 159.783 lembar saham. Jumlah dana yang bisa diraup sebanyak Rp 59,5 miliar.

Seperti dikutip dari keterangan tertulis perseroan yang dipublikasikan di Jakarta, Kamis (10/2/2011), proses jual-beli saham Sara Lee ini difasilitasi oleh PT Kresna Graha Sekurindo. Sementara masa penawaran tender di 10 Februari hingga 11 Maret 2011 mendatang dengan pembayaran kepada pemegang saham 22 Maret 2011.

Saat ini, Unilever menjadi pemegang saham pengendali PROD dengan kepemilikan sebesar 1.340.217 lembar saham setara dengan 89,348%. Sebelumnya, Unilever telah mengakuisisi PROD dari Sara Lee/DE NV senilai Rp 499,83 miliar, dengan harga per lembar sahamnya Rp 372,949.

Sara Lee Body Care Indonesia merupakan perusahaan publik yang sahamnya pernah tercatat di Bursa Efek Indonesia (BEI). Sara Lee sudah delisting sejak 1 Desember 2009 karena jumlah pemegang saham publiknya tidak sesuai dengan peraturan Bapepam LK.


- The indonesian market is down another 2.2%, its fourth consecutive decline.
- There is a myriad of reasons for the weakness, but everything is happening against the back-drop of relatively light turnover.
- You need to explain the recent performance, use on or all of the following:
- Inflation worries. Enough said.
- Continued switching out of emerging into developed markets.
- ETF performance indicators. Y'day both the EIDO and IDX etfs were down 3% on twice the volumes of their previous trading days.
- Weakness in the banking sector is heavily felt in the index as the sector makes up 305 of market cap. With a number arbitraging possibilies around some pressure on the sector as a whole might persist in the short term.

SBI, and guaranteed deposit rate - Nomura

Bank Indonesia will no longer hold auction for SBI with duration shorter than 9 months starting Feb11. This follows similar measures for 1 month SBI in Aug10 and 3 months SBI in Nov10. We see this as a continuation effort of Bank Indonesia to manage hot money flow to Indonesia.

Indonesia Deposit Insurance Corporation raised the guaranteed rupiah deposit rate from 7% to 7.25%. This will allow smaller banks to raise deposit rates in effort to raise fund and it is yet to see if larger banks will be force by competition to raise deposit rate. Note that liquidity is tightening as loan to deposit ratio continue to normalize/rises and BI has increased minimum reserve requirement. BI has increased the minimum reserve requirement for rupiah from 5% to 8% in Nov10 and the dollar based reserve requirements will be increase from 1% to 5% in Mar11 and to 8% in Jun11. Additional 0.1% reserve requirements for every 1% LDR below benchmark of 78% LDR is also applied to banks.

LDR for the banking system is currently around 75%…BCA is at the low-end of 51% (Mandiri and BNI around 70%) and hence skews the average…we would think the median average is now probably in the 85% region…Danamon is already above 100% while Rakyat has increased from 80% at end-2009, to 88% as at 3Q10. So, liquidity is going to be an issue for some banks if loan growth remains strong and other sources of funds such as debt (used a lot by Danamon) become more expensive… (for more flavor please contact our banking analyst Anand Pathmakanthan

Indo flavour: Upgrade CPO price - Nomura

Ken Arieff, our plantations analyst, believes the CPO party is far from over. He remains bullish on palm oil outlook and upgraded our CPO price assumption from RM3000/t to RM3400/t in 2011F and to RM3550/t in 2012F.

Ken Arieff points out that most planters has either lagged CPO prices by an average of 26% or have corrected up to 16% from their recent peak. He believes concerns over production pick up in 2H11 and China’s tightening are over done. Supply from competing vegetable oils (soybean oils, rapeseed oils, sunflower oils) will remain tight given high overall agriculture prices will intensify the fight for acres, benefiting palm oil.

Poor soft commodity production, strengthening crude oil prices, and a weak US dollar continue the perfect storm for the sector. Note that Indonesian export tax has hit the maximum level of 25% in Feb11 as CPO price rises. Thus Indonesian plantations will benefit from a further rally in CPO price from here as export tax rate will not increase further even if CPO price moves higher (above US$1250/t). Current spot CPO price (KO1 Comdty) is US$1,309/t.

Our Top Picks are Sime Darby for its better leverage to CPO price and reasonable valuations, London Sumatra as the laggard, and Indofood Agri, which has been punished by poor sector sentiment.

Emerging market equities Seek Exposure to US Economy - UBS

• We stress a defensive stance in our emerging market country allocation. We advise investors to avoid expensive markets such as Indonesia.
• We believe ongoing rotation into countries with high exposure to the US economy still has upside potential. Therefore, we add Mexico and Korea to our list of preferred countries.

Emerging market country recommendations
Current most favored markets : China Russia Taiwan Korea Mexico
Current least favored markets : India, Indonesia, Malaysia, Thailand

Valuation gives first signs of caution
Price-to-book (P/B) ratio, which measures the market price of the balance-sheet equity of a single company or a market as a whole, is a useful indicator of overheating stock markets. The indicator advantageously removes the cyclical element of earnings indicators based on income statements.

Current valuation levels are not yet extreme and do not justify an immediate sale on valuation grounds alone. Investors should, however, consider leaving crowded markets and switching to attractively valued ones to minimize downside risk in case of setbacks.

Adding our macroeconomic picture of inflation concerns and a scenario of further interest rate hikes in emerging markets, we can identify a few countries that are likely to provide less appealing returns over the medium term. Indonesia and Thailand are candidates deserving more caution. On pure valuation measures, India always trades at elevated P/B values due to higher profitability, but ongoing food inflation and rising interest rates are likely to weigh on profitability and asset prices, in our view.

Research Today: CLSA

With the Asean forum in full drive, we give you the low-down on the three Indonesian companies presenting at today's forum.

Indonesia's largest independent tower company with 8.5% market share (>4,800 towers; average tenancy of 1.8x)
Income is stable and predictable due to use of long-term leas contracts (5-10yrs)
Customers include the big three of Telkomsel, Indosat and XL Axiata
Limited foreign competition due to government legislation
Earnings are driven by Higher tenancy ('co-location') and tower-portfolio expansion

Gozco Plantation (GZCO IJ):
Pure upstream CPO and palm kernel producer with 30,000 ha of planted estates and 95,000 ha of unplanted land bank
Produced 59,000 tons of CPO and 12,000 tons of palm kernel in FY09, all sold in domestic market at spot rates
Has a reputation for good infrastructure and strong estate management in a fragmented CPO market that also has limited competition
Estimated annual planting capacity of 7,000-10,000 ha will double planted area by 2015.
Management is also open to new estate acquisitions should an attractive opportunity arise

Bumi Serpong (BUMI SD):
Bumi Serpong is Indonesia's largest, fully-integrated, property developer
Grows through its huge land bank in strategic locations with comprehensive infrastructure
Recently raised US$550m to acquire Duta Pertiwi and two affiliated companies, giving a combined land bank of 4,250 ha
A proxy to the Indonesian property sector that is driven by a rising middle class, young population, and low mortgage penetration
While govt passed a restrictive law on presales, it cannot be enforced yet in the absence of an implementing statute

Daily 10 Feb 2011 (UNVR,PTBA,ANTM,FREN) - NISP Sekuritas

Unilever mengajukan penawaran tender (UNVR, Rp15.000, Jual)
· Seusai dengan ketentuan Bapepam dan setelah mendapat persetujuan dari RUPSLB, maka Unilever Indonesia mengajukan penawaran tender untuk 159.783 saham Sara Lee Indonesia atau 10.652% kepemilikan dengan harga Rp372.950 per lembar.
· Masa penawaran adalah antara 10 Februari 2011- 11 Maret 2011.
· Pengumuman ini sudah pernah dinyatakan sebelumnya dan sudah dimasukkan dalam penghitungan harga pasar sehingga dampak bagi perusahaan sekarang adalah netral.
· UNVR diperdagangkan di PER 31.4x and EV/EBITDA 22.1x, Jual.

Bukit Asam target pendapatan Rp10tn (PTBA, Rp19.900)
· Untuk tahun 2011, Bukit Asam menargetkan perolehan pendapatan Rp10tn dan laba bersih Rp3tn. Manajemen optimistis akan target ini seiring dengan penguatan harga batubara karena permintaan dari Cina dan India dan terganggunya pasokan dari Australia.
· Perusahaan menargetkan produksi 17,6 juta ton dibandingkan dengan 13,1 juta di 2010. Untuk itu, kapasitas pengangkutan batu bara melalui kereta akan ditingkatkan dari sebelumnya hanya 10,8 juta ton menjadi 13,1 juta ton di 2011, dan 50 juta ton di 2015.
· Tahun ini, belanja modal adalah sebesar Rp1,8tn, mengecualikan kemungkinan akuisisi. Rencana perusahaan antara lain adalah investasi US$3,5 juta untuk menjadi pemilik saham 4 PLTU di Sumatera Selatan.
· PTBA diperdagangkan di PER 13.2x and EV/EBITDA 8.7x.

Antam memberikan pinjaman US$140,5 juta ke Tayan (ANTM, Rp2.225)
· Aneka Tambang menyuntik US$140,5 juta atau Rp1,31tn ke anak usahanya Indonesia Chemical Alumina, untuk proyek Chemical Grade Alumina (CGA) Tayan. Hal ini diakibatkan karena Indonesia Chemical Alumina belum berhasil mendapatkan pinjaman dari bank sementara down payment telah jatuh tempo.
· Pinjamanan tersebut jatuh tempo 30 Juni 2011 dengan bunga 3,5% per tahun.
· ANTM diperdagangkan di PER 11.8x and EV/EBITDA 6.4x.

Mobile 8 akan keluarkan Rp2tn untuk membangun BTS (FREN, Rp50)
· Mobile 8 berencana mengeluarkan Rp2tn untuk membangun 1.500-2.000 base transceiver station (BTS). Dana akan diambil dari hasil rights issue.
· Dengan ini diperkirakan jumlah BTS perusahaan akan bertambah menjadi 3.000-4.000 unit. Seiring dengan itu, pendapatan diharapkan akan bias naik dua kali lipat dari perolehan 2010.
· Walau begitu, perusahaan tidak mengindikasikan perolehan tahun lalu, hanya bahwa angka tidak akan banyak beda dari 2009-2009.

SingTel and Telkomsel Record Mobile Subscribers Growth in 2010 - The Indonesia Today

The largest telecommunication company in the world, Singapore Telecommunications Ltd (SingTel) has recorded mobile customer base of 383 million in 25 countries in 2010. The number increased 34% from 2009.

SingTel added 62,000 mobile customers in the 4th quarter, grew 2% from 2009 to 3.2 million at 2010. SingTel maintains its lead in the mobile market with an overall market share of 44.2% as at 30 November 2010.

Indonesian associate of SingTel, PT Telekomunikasi Selular (Telkomsel), which is also subsidiary of state-enterprise PT Telkom Tbk posted 94 million of mobile customer base, jumped 15% compared to the same period of previous year.

SingTel is the most successful mobile operations in Singapore. It reported will announce its third quarter results ended 31 December 2010 on 10 February 2011.

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Indonesia Stock Index Falls for Third Day as Inflation May Exceed Target - Bloomberg

Indonesia’s stocks dropped, with the benchmark index falling for a third day, after the central bank said inflation may exceed its target, prompting speculation interest rates will be increased further.

The Jakarta Composite index lost 1.2 percent to 3,417.47 as of the 4 p.m. local time close, the lowest level since Jan. 31. More than three stocks fell for each that rose. PT Bank Mandiri, Indonesia’s largest bank by assets, plunged 4.2 percent, the most since Jan. 10. PT Indofood CBP Sukses Makmur, an instant noodle maker, slid 2.8 percent after wheat rose to a 29-month high as drought threatened to damage crops in China.

Bank Indonesia raised its benchmark interest rate last week for the first time in more than two years as the pace of consumer price increases quickened to a 21-month high. Inflation this year may exceed the target of 4 percent to 6 percent, Bank Indonesia Deputy Governor Budi Mulya said today.

“Anomalies in weather conditions are spurring inflation in many places around the world,” said Fadlul Imansyah, who helps manage around $213 million at Jakarta-based PT CIMB Principal Asset Management. “Bank Indonesia will likely respond with another rate increase, which will eventually affect banks.”

Bank Indonesia raised its key interest rate by a quarter percentage point to 6.75 percent on Feb. 4, the first increase since October 2008. The Jakarta Composite has dropped 7.7 percent this year as faster inflation and higher interest rates damped growth prospects in Southeast Asia’s biggest economy. Domestic consumption accounts for about two thirds of the economy, which grew 6.9 percent in the fourth quarter, the fastest annual pace in six years.

Overseas Investors

Overseas investors have sold a net 2.572 trillion rupiah ($288 million) of shares this year and shares on the index are trading at an average of 13.5 times estimated earnings, the lowest level since May 2010.

Mandiri fell 4.2 percent to 5,700 rupiah and PT Bank Rakyat Indonesia, the second largest bank by assets, declined 4.2 percent to 4,625 rupiah.

Indofood CBP, Indonesia’s biggest instant-noodle maker, fell 2.8 percent to 4,425 rupiah, the lowest since Jan. 24. Indofood uses wheat to produce instant noodles.

Wheat gained today to the highest level since August 2008, rising to $8.83 a bushel on the Chicago Board of Trade, as drought threatened to damage crops in China and Middle Eastern and African nations boosted purchases to tackle food inflation. Wheat has surged 82 percent in the past year.

To contact the reporter on this story: Berni Moestafa in Jakarta

Rekomendasi Beberapa Sekuritas, 10 Februari 2011

Berikut rekomendasi dari tiga sekuritas ternama untuk perdagangan Kamis, 10 Februari 2011.

1. E-Trading Securities
Pada perdagangan Rabu (9/2) indeks harga saham gabungan (IHSG) ditutup turun 42 poin (-1,23%) ke level 3.417,47. Penurunan ini tak lepas dari aksi Pemerintah Tiongkok menaikkan tingkat suku bunga acuan untuk mengerem laju pertumbuhan ekonomi yang terlalu pesat.

Kemarin, asing melakukan net selling Rp 359 miliar dengan sektor yang paling banyak dilepas adalah perbankan dan pertambangan. Secara teknikal, indeks sedang menguji level resistance kuatnya di 3.372. Garis MA5 terlihat gagal melewati MA20 dan diikuti kenaikan volume, sehingga membuat indeks pada Kamis (10/2) berpotensi kembali terkoreksi. Hari ini, indeks kami prediksi bergerak di kisaran 3.372-3.471. Amati INCO, UNTR, dan BUMI.

2. Sinarmas Sekuritas
Secara teknikal, IHSG hari ini masih menunjukan sinyal pelemahan pada kisaran 3.364-3.455. Minimnya sentimen positif dari dalam negeri, serta pengetatan yang dilakukan oleh Tiongkok turut memengaruhi pergerakan indeks. Saham-saham yang dapat diperhatikan antara lain TLKM, EXCL, BWPT

3. Mandiri Sekuritas
Setelah tiga hari terkoreksi, IHSG hari ini diperkirakan berpotensi rebound. Potensi rebound sudah terlihat pada perdagangan kemarin karena indeks tertahan di level support. Sektor perbankan dan barang-barang konsumsi patut diperhatikan pada perdagangan hari ini. Sementara sektor perkebunan diprediksi bakal melemah. Indeks pada Kamis (10/2) akan bergerak di level support 3.430-3.455 dan resistance 3.382.

Indonesia's first LNG receiving terminal to be delayed to 2012 - Reuters

Indonesia's first liquefied natural gas receiving terminal near the capital Jakarta will begin operating in the first quarter next year, a delay from an expected September 2011 start, said chief economic minister Hatta Rajasa on Wednesday.

"There is a little issue on land reclamation. This may delay to the first quarter next year at the maximum," Rajasa said.

The floating LNG terminal is being developed by PT Nusantara Regas, 60 percent owned by PT Pertamina and the rest by PT Perusahaan Gas Negara Tbk .

PGN is planning another terminal in North Sumatra, and Rajasa said the North Sumatra terminal was also expected to begin operations in the first quarter next year.

The terminals are expected to supply gas for Indonesia's energy-hungry industries. Rajasa said future gas development projects would be focused on supplying the domestic market.
"But we will not change existing (export) contracts," he said.

Indonesia, the world's number-three LNG exporter after Qatar and Malaysia, is increasing its use of natural gas at home to avoid costly imports and dwindling domestic supply. Its exports of LNG will fall to 362 cargoes this year from 427 in 2010.

Indonesia approves coal export permits after massive backlog - Reuters

A backlog of up to 3.5 million tonnes of coal awaiting export from Indonesian ports may finally be cleared after the energy and mineral ministry approved 60 permits for traders to resume shipments, a senior mining official on on Wednesday.

The shipments, destined to fuel power stations in China and India, were delayed because of changes to coal and mining laws that require cargoes to undergo fresh surveys in a bid to stem illegal exports that avoid tax.

The Indonesian Coal Mining Association said last week around 60-70 vessels and 3.5 million tonnes of coal were backed up in Indonesian ports because they lacked proper certification.

Some suppliers had declared force majeure on shipments, the association said, although the rule change has so far not affected shipments from top producers such as Bumi Resources and Adaro Energy.

"I have signed approval for about 60 permits. If traders submit all the required documents, the permit can be processed in just one day," said Bambang Setiawan, director general of coal and minerals at the energy ministry.

Indonesia, the world's top thermal coal exporter, is expected to produce 340 million tonnes of coal this year.
"We are glad that it ends well and we can avoid bigger financial losses," said Bob Kamandanu, chairman of the coal association.

Base Metals gets a rude shock from China’s rate hike - Commodity Online

China's return from long holidays saw its regulatory bank raise its interest rates which gave a rude shock to Base Metals.

Base metals especially Copper which saw a recent run up was because of investment demand. Base metals’ recent run up was ahead of fundamentals so also the cause for correction as recent rise in prices may dampen metal’s demand. While, China’s PBOC’s rate hike to tame inflation gave a fuel in it.

The base metals may fall further because of the China’s central bank move as cost of borrowing rises which may decrease demand. Despite it was an expected move from PBOC, base metals are likely to fall further from the present levels. However, outlook of base metal is still positive for the medium term so positional traders are advised to buy on dips.

Base metals on LME, the benchmark metal exchange, traded lower in Asian session after Chinese participants returned to the markets after weeklong holidays. The metals lost its ground this morning after the announcement of China’s central bank to increase its benchmark deposit and lending rates by 25 basis points.

The metals went up recently was because of investment demand and on dollar weakness against Euro and other major currencies. A weaker USD is supportive for dollar denominated commodities and makes it cheaper for other currency holders. The metals were trading higher in the past days was ahead of fundamentals.

Base Metals rose in the recent days was mainly because of strength in world markets on strong US economic indicators and Chinese economic data and ignored the physical stock taking at warehouses across the globe, especially the benchmark LME. Inventories of major metals at LME showed continue rise in last few days.

The China’s liquidity tightening move to curb inflation may adversely affect the metal’s demand while copper may affect severely as copper is a metal widely used in building construction, power generation and electronic products. If inflation rises further, the more tightening measures are likely from the China in the coming few months.

Copper last trade at LME was USD 9985.75 a tonne. Copper prices crossed the 10000 USD mark recently and are struggling to stay above that level. While Lead and Nickel on LME traded at USD 2533.25 per tonne and USD 28135 per tonne respectively. At LME, Aluminium last traded at 2553.75 a tonne.

Metals are likely to continue cues from the USD and other major currencies movements and global equity markets. Traders are eyeing on MBA mortgage applications data and the U.S. Fed’s chairman Bernanke’s statement on the economy.

Rabu, 09 Februari 2011

Bukit Asam expects above Rp3 trio profit - Insider Stories

The state-owned coal miner PT Tambang Bukit Asam Tbk (PTBA) expects to reach 2011's net profit above Rp3 trillion from above Rp2 trillion last year.

The earning increase is mainly underpinned by higher sales volumn and prices. PTBA is targeting a 31% increase in sales volume to 16.9 million tons this year from 12 million tons last year.
The company expects a 46.34% rise in revenue to Rp12 trillion this year from Rp8.2 trillion last year. "We predict our 2011's average selling price at US$80 per ton from US$61.5 ton," Sukrisno, Bukit Asam CEO, said in a press conference today.

According to him, PTBA sets capital expenditure of Rp1.8 trillion to support this target. It will be generated from internally cash flow. The company records Rp5 trillion of free cash flow.
As a part of business diversification, PTBA and Germany's Lurgi AG are studying to develop coal gassifiction in Riau provinces with capacity 800,000 metric british thermal unit per year.
At end of January, they expect the feasibility studies are final. "We will supply 6 million tons of coal and the off taker is PT Pertamina with total contract 30 years." The coal gassification project development requires 2-3 years.

Dono Boestami, PTBA Finance Director, said to finance the capex PTBA from internally generated cash and bank loans to finance the capex in 2011.
PT Bank Mandiri Tbk, PT Bank Rakyat Indonesia Tbk and PT Bank Negara Indonesia Tbk have committed to bankroll the project.

PTBA requires US$350 million to finance lot of projects until 2014. The investment will be financed by cash internal, bonds or bank loans.
PT Bukit Asam Transpacific Railway a joint venture company beetwen PTBA (10%) PT Transpacific Railway Infrastructure (80%) and China Railway Engineering Corporation (10%) with project values US$1.5 billion.

The development of the project will start in first half 2010 and will be finished in 2014. Power plants project with capacity 2 x 100 megawatt in South Sumatera requires US$350 million.
PTBA also has joint partners a railway project with PT Kereta Api Indonesia with total investment of US$47.7 millions.

Other projects are Pelabuhan Tarakan expansion, exploitation and acquisition. The company plans to acquire one or two coal mining company in South Kalimantan in this year.
The company prepares Rp1 trillion for this plans. Boestami said with all these business expansion the capacity production of Bukit Asam will achieve 40 million tons in 2014 from the existing capacity productions 12.5 million tons in 2010.

Kangean Energy Signs Gas Sale Agreement with PLN, Pertagas and Indogas - The Indonesia Today

Kangean Energy Indonesia Limited had in December 2010 signed gas sale and purchase agreement with state utility PT Perusahaan Listrik Negara (PLN), PT Pertamina Gas (Petragas) and PT Indogas Kriya Dwiguna (Indogas).
Kangean Energy, a unit of PT Energi Mega Persada Tbk (ENRG) is operator of Kangean PSC Block.

Based on the agreement, Kangean Energy to sell 300 million cubic feet per day (mcfd) of gas produced by Kangean PSC in Terang Sirasun Batur field.

Based on contract, PLN will purchase 368.7 tbtu of gas at price of US$5.15 per mmbtu for the period of 31 January 2012 to 30 December 2028.

Petragas will buy 221 tbtu at price of US$5.15 per mmbtu starting January 2012 plus 3,288 days.

Indogas will take 79.2 tbtu at price of US$5.15 per mmbtu for the period of 31 January 2012 to 7 December 2022.

Energi Mega holds 50% interest in Kangean Energy which will start producing 300 mcfd at a price of above US$5 per mmbtu.

Government bond auction commentary (Still) Strong demand for long-end tenors - Mandiri Sekuritas

The government again sold more than their target on the latest auction, raising Rp5.5tn vs. Rp5tn target today. Total bids reached Rp13.1tn slightly lower than the previous auction. Bid-to-cover ratio was also down from 3.4 to only 2.4. High demand was still for the longest tenor i.e. 20-year FR54 which attracted bid of Rp6.1tn–or 47% of the total bids. Average yield awarded for the FR54 was 10.01% or 17bps lower than in previous auction or in line with our estimate. Meanwhile, for the 1-yr SPN25 and 15-year FR56, the average yield awarded was 6.55% and 9.54% with the highest yield awarded 6.59% and 9.63% respectively or below our estimate of 6.94% and 9.68%. For the 5-year FR55 the average yield awarded was 8.22% with the highest yield awarded 8.31% much higher than our estima te of 8. 13%.

Thus, the government has issued Rp16.8tn gross ytd (8.3% of target FY2011) or Rp14.2tn nett (11.2% of target FY2011). In 1Q 2011, the government targeted to raise Rp38.5tn from bond issuances excluding retail and global bonds.

Market reaction to the results of the auction was muted. According to our MSGBI (Mandiri Sekuritas Government Bond Index) average bond prices only rose slightly by 0.03% or still recorded -5.5% ytd. We still maintain our shortening strategy as we believe that in the near term inflation rate will continue to pick up (see our latest weekly bond market commentary report: “Short term cheers but in very thin market” 7-Feb).

Newcastle coal exports slip - Reuters

Coal shipments from Newcastle port, which ships mostly thermal coal used in power plants, slipped 14 per cent last week.

Exports from the eastern coast port were just short of two million tonnes in the week to February 7, down from 2.3 million the previous week, Newcastle Port Corporation said on its website.

Newcastle ships out coal produced in New South Wales. The region's coal industry has escaped the massive floods, cyclones and resulting production disruptions that have hit its northern neighbours in Queensland.

However, reduced coal production in Queensland, has helped support prices of thermal coal as buyers scramble to replace cargoes from Queensland.
Australia's thermal coal prices on the globalCOAL weekly index, a benchmark for Asia, closed at $US125 per tonne for the week to date on Monday, down more than $US2 from Friday and also lower than the $US127 per tonne seen at the same time last week.

The vessel queue at the port dropped to 9 ships last week, down from 14 the previous week, while the average waiting time for vessels at the port was slightly up at 13 days.
Twenty-four ships were travelling to the port to load coal, down from 27 last week, the port said.

In a separate report, the Hunter Valley Coal Chain Coordinator (HVCCC), which helps coordinate coal exports, put the number of vessels in the queue at the port at 29 by midnight on Monday.
The HVCCC calculates the number of ships in the vessel queue using a wider radius from the port than the Newcastle Port Corporation.

PT ADARO ENERGY Tbk Performing well in Rainy Seasons - AAA Securities

± Summary
Higher rainfall in mining area did not stop Adaro from increasing its output which has gone up by 4% YOY to 42.2 million, or has achieved 95% of 45 Mt of its last year target. Decline in demurrage charges resulted from better barging time and loading cycle, will help net profit, which fell by 50% last quarter, to bounce back. Long-term contract with MBBS has started to take effect on Adaro’s operational performance. Natural disaster in Australia that has caused global coal price to increase will also benefit Adaro in the long run as ASP will be higher. In term of business development, Adaro is still working on the OPCC and 2 x 30 MW power plant projects. Therefore, we would like to reinitiate with BUY recommendation. Our target price of Rp3,000 is based on blended valuation method, which implies 15.3 X PE and 6.1 EV/ EBITDA, this is in line with its historical average valuation.

± Improved Productivity In The Rainy Season
Even with high rainfall in the mining area in 4Q210, Adaro is still able to increase its output by 4% YOY to 42.2 million Mt, or achieved 95% of 45 Mt of its last year target. Wara mine area was less affected by wet seasons as it is still in the initial stage of development and has a low overburden-stripping ratio. This year Adaro plans to improve its production output to 46 – 48 Mt, including the contribution of Wara – Envirocoal that will contribute 4 – 5 Mt per year. This new product continues to attract Chinese, India, and South Korean buyers.

± Valuation
We still believe that ADARO will perform well for the next coming months, which is due to a number of factors: 1) Adaro’s reputation in achieving its output target year by year, and its flexible business model that allows it to monitor different stages of production, from upstream to downstream. 2) Higher demand for coal that will increase average selling price. 3) Lower freight and handling cost and which will reduce cost by around 15%. These three factors will help increase its net profit. That said, we reinitiating coverage of ADARO with BUY recommendation. Our target price of Rp 3,000 is based on blended valuation method, which implies 15.3 X PE and 6.1 EV/ EBITDA, this is in line with its historical average valuation level. Adaro is currently traded at 12.1X PE and 4.8X EV/EBITDA, providing 28% potential upside from our target price.

INCO - laggard play to run in nickel prices - Macquarie

Albert Saputro, flagged INCO’s share price underperformance to nickel prices by about 20% since beginning of Q4. INCO has high leverage to nickel prices as for every 1% change in our LME Nickel price assumptions (USD11.6/lb vs spot at USD12.9/lb), translates to 2-3% change in earnings. Karebbe hydro project is also on track to finish August 2011 which will serve as a buffer to oil prices + additional capacity by 20-40Mt. INCO is attractively valued at 10.2x PE11 + 9.8% dividend yield (historically INCO pays 100% div pay out except in 2008). INCO is trading at 8.8x PE11 with USD11.8/lb price assumption (YTD average nickel price). Interestingly enough on the Quant space (which combines growth, momentum, profit, technical, value, + other analysis) INCO ranks 18th out of 542 companies.

Daily Feb 09: Flows, Equities impact on stronger IDR, KLBF, ISAT, EXCL, MPPA, SMGR, MAPI/LPKR - UBS INDO

Kalbe Farma (KLBF Under Review): Management guidance. Inline
Management guides for 2011 and 2010 revenue at Rp11.7 tn and Rp10.2 tn, inline with UBSe. Earnings guidance for 2011 and 2010 at Rp1.4 tn and Rp1.2 tn, also inline with UBSe.
Sales comment: Overall inline results. We expect Kalbe to continue report good results as they are beneficiaries of strengthening IDR.

Indosat (ISAT Buy PT 7,400): EGM takeaways
Some important points from yesterday’s EGM:
· Change of management: Parikesit Suprapto and Hans C Mortis joins BoC and BoD.
· Indosat mulling spinning off CDMA unit, StarOne.
· Plans to refinance its 2011-12 maturing debt from US$420 mn existing global bonds proceed.
Sales comment: Positive news. StarOne currently contributes 2% of of EBIT and spin off would pave the way to merge with Telkom CDMA unit, Flexi. Management will be meeting investors in Europe next week.

XL Axiata (EXCL Buy PT 6,700): Repay Rp2 tn (US$220 mn) debt early
Sales comment: Positive, this shows strong cash flow confident.

Matahari Putra Prima (MPPA Not Rated): Wal-Mart enters discussion to become a partner
Market talk that Wal-Mart is the leading short-listed bidder for MPPA’s hypermart business resurfaced. Separately, controlling shareholder Lippo group aimed to raise over US$1 bn from this sale.
Sales comment: Recall that last month Lippo group scrapped plans to sell its Hypermart chain and seek a global partner instead.

Semen Gresik (SMGR Buy PT 10,900): Plans to acquire Semen Baturaja
Investor Daily reports that CEO stated that the company is ready to acquire Semen Baturaja in South Sumatra before it goes public, pending to EGM approval.
Sales comment: Semen Baturaja has roughly 1.5mtpa capacity. As yesterday’s news on SMGR’s plans for additional capacity, this could be the case that President Director was interviewed by Parliament on SMGR’s long term plan and should not have gone to media.
We view additional capacity is positive: with only 42mtpa total national capacity, Indonesia is indeed in need more cement capacity. On acquisition, however, we need more details (if the plant is old, demand in that area, acquisition price, etc). SMGR is currently building additional 5mtpa cement plants that will start production end 2011 and end 2012. As part of its long term plan, SMGR also discussed with the Parliament to build 2 additional plants with 5mtpa capacity.

Mitra Adiperkasa (MAPI Not Rated): Anchor tenant in Lippo Karawaci (LPKR Not Rated)
MAPI has partnered with LPKR for 44,500sqm of lease rental in LPKR’s sites in St.Moritz and Kemang Village.
Sales comment: Positive for both companies. MAPI may get low rental fee as anchor tenant, LPKR malls attract crowd.

Microfinance – CLSA U Speaker series

What is microfinance? How did it start out? What is the average size of a micro loan? Who are the typical borrowers and more importantly why has micro finance done so well?

Find these answers and more in our latest 43-page CLSA U report, Speaker Series, Money for everyone (Microfinance). Analyst Bret Ginesky together with Microfinance Innovation Center for Resources and Alternatives (MICRA) takes a deep-dive into the world of microfinance, and finds amazing opportunities in a country where only 17% of the population take out loans, and 82% of the population depends on Micro and small enterprises for a livelihood. (See attached summary report. Please ask for the full version).

Key points from the report:
Over 45,000 microfinance institutions (MFI) exists in Indonesia, and Bank Rakyat's (BBRI) is the largest with a loan portfolio of US$5.4bn
While the average micro loan for BBRI is US$1,000, the definition of micro loan in Indonesia is quite high, at up to US$5,000, with interest commonly applied at 2% per month
The most likely MFI customers are male traders with existing microenterprise in the informal economy, and only 15% of these microentrepreneurs will access external fund
Savings accounts are highly demanded; 17% of Indonesians take out loans while 40% have a savings account
Commercial banks are opening their own microfinance units, increasing competition in urban areas on Java while rural areas continue to be underserved
Opportunities abound in this industry, ranging from a US$5bn a year remittance market, to multipurpose loans that helps fuel consumption
Main barrier to entry stems from issues such as legal form challenges and legislation risks

Astra Agro Lestari (Neutral) - Relatively unattractive - MACQUARIE

§ We maintain our Neutral recommendation on Astra Agro Lestari (AALI) and reduce our price target to Rp22,650 from Rp25,740 earlier.

§ We now have a less optimistic view on plantation stocks: We are not bearish on the plantations sector, but are less bullish than before, as prices have risen strongly since last August and we believe that CPO supply is set to recover this year, which could weaken prices beyond 2Q11. We are therefore recommending investors to take profits on select plantation stocks.
§ More sensitive to CPO price changes: AALI is a pure upstream focused CPO play, which makes its earnings quite sensitive to changes in CPO prices. Every 1% change in our CPO price assumptions for 2011 changes our AALI earnings by 1.8% (vs.0.5-1.5% for its peers). In a scenario of weakening CPO prices, AALI's earnings would likely decline faster than its peers.
§ Valuations relatively unattractive: Despite our forecast of an 11% decline in CPO prices for 2012, we expect AALI's earnings to grow slightly due to strong production growth. However, we expect its closest peer, London Sumatra (LSIP IJ, CP: Rp11,800, OP, TP: Rp14,650) to grow its earnings even faster - by 5% in 2012 (see Fig 1). Also, AALI's valuation is unattractive relative to Lonsum, as it trades at a 20% premium to Lonsum on a PER basis.

Earnings and target price revision
§ We have raised our earnings estimates by 5%, 27% and 14% for 2010E, 2011E and 2012E respectively on higher CPO price assumptions. However, we have reduced our price target to Rp22,650 from Rp25,740 previously, based on a revised target multiple of 13x (19x previously), a 20% discount to our target PER for its Malaysian peers. We have reduced our target multiple for all plantation stocks including AALI, as we believe the market would be unwilling to pay a significant premium for earnings based on near-peak CPO prices.

Price catalyst
§ 12-month price target: Rp22,650 based on a PER methodology.
§ Catalyst: Higher CPO prices over the next 12 months

Action and recommendation
§ We maintain our Neutral recommendation on AALI. Given our less optimistic view on plantation stocks in general, AALI's high sensitivity to CPO prices and 20% valuation premium to London Sumatra, AALI is not our preferred play within the Indonesian plantation market

Stocks in U.S. Gain as McDonald's Rallies on Sales, Homebuilders Advance - Bloomberg

U.S. stocks rose, giving the Dow Jones Industrial Average the longest winning streak since July, as retail sales rebounded and as McDonald’s Corp. rallied after reporting higher-than-estimated monthly results.

McDonald’s jumped 2.6 percent. J.C. Penney Co. and Macy’s Inc. gained at least 3.2 percent as the International Council of Shopping Centers said weekly retail sales snapped four straight declines. Banks had the biggest gain in the Standard & Poor’s 500 Index within 24 groups, rallying 1.7 percent as RBC Capital Markets said regulators may soon enable higher dividends. A gauge of homebuilders in S&P indexes gained 2.7 percent as executives and economists predicted a bounce in demand.

The Dow climbed 71.52 points, or 0.6 percent, to 12,233.15 at 4 p.m. in New York, rising for a seventh day and jumping to the highest level since June 16, 2008. The S&P 500 added 0.4 percent to 1,324.57, also the highest since June 2008. The gauge needs to rise 2.2 percent to 1,353.06 in order to complete a 100 percent rally from its March 2009 low. Around 7 billion shares traded in the U.S., the lowest total of the year, according to data compiled by Bloomberg. more ...

Oil Declines for Fourth Day After China Raises Interest Rates - Bloomberg

Oil fell for a fourth day as China raised key interest rates for the third time since mid-October, sparking concern that fuel demand will be curtailed in the world’s biggest energy-consuming country.

Futures dropped 0.6 percent as the People’s Bank of China boosted the one-year lending rate to 6.06 percent from 5.81 percent to curb inflation. Crude also declined as political tension in Egypt eased, and before a report tomorrow that may show U.S. crude inventories increased for a fourth week.

“It’s all about China right now,” said Tom Bentz, a broker with BNP Paribas Commodity Futures in New York. “Climbing Chinese interest rates could slow the economy.”

Oil for March delivery slipped 54 cents to settle at $86.94 a barrel on the New York Mercantile Exchange. Futures have risen 21 percent in the past year.

Prices pared losses from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles decreased 558,000 barrels to 346 million. It was the first drop in five weeks. March oil fell 19 cents to $87.29 a barrel in electronic trading at 4:31 p.m.

Brent crude for March settlement gained 67 cents, or 0.7 percent, to $99.92 a barrel on the ICE Futures Europe exchange in London. Brent was a record $12.98 a barrel more expensive than Nymex crude, based on settlement prices.

China raised its rates as growth accelerated and inflation stayed above 4 percent. Consumer prices climbed 4.6 percent in December and the economy expanded 9.8 percent in the fourth quarter, faster than the pace in the previous three months. more ...

UPDATE 1-Wal-Mart in talks on partnership with Indonesia's Matahari - Reuters

* Partnership could involve taking stake - sources
* Partner may face tight retail margins - analyst

Wal-Mart Stores Inc (WMT.N) is in talks to become a partner of Indonesian retailer PT Matahari Putra Prima (MPPA.JK) to develop its hypermarts, though South Korea's Lotte Shopping Co Ltd (023530.KS) has pulled out, sources said on Tuesday.

International retailers are jockeying for position in emerging markets as they look for sources of growth outside maturing U.S. and European markets, although the cost of competing is often too much to justify widespread expansion.

Lippo Group, an Indonesian conglomerate which controls Matahari via PT Multipolar (MLPL.JK), last month scrapped plans to sell its Hypermart chain because of low offers and instead opted to seek a global partner to expand.

"Lotte is out due to disagreement over pricing and branding," said one of the four sources with direct knowledge of the deal, who declined to be identified because the details were not public.

"However, Wal-Mart is still in talks with the group on the possible partner deal."

Wal-Mart and Lotte had both been interested in buying the Hypermarket assets, along with French retailer Casino Guichard Perrachon SA (CASP.PA) and private equity group Carlyle Group CYL.UL, in a sale that Lippo had hoped would raise over $1 billion.

The partnership could still involve taking a significant stake in Matahari to gain control over the hypermarket assets, the sources said.

Wal-Mart, the world's biggest retailer, has a significant investment in China including 104 hypermarkts, and in India it has a joint venture with Bharti Enterprises, while Casino just bought Carrefour's (CARR.PA) Thai assets for $1.2 billion.

Lotte already has a significant presence in Indonesia with its Lottemart chain and is currently the fourth biggest hypermart player in Southeast Asia's biggest economy.
Indonesia has been an hot investment destination in the past two years, with its stock market surging 46 percent last year. Growing domestic consumption, together with public spending and investment, led fourth quarter 2010 GDP to rise 6.9 percent.

However, Ari Pitoyo, senior retail analyst at PT Mandiri Sekuritas in Jakarta, warned that firms looking for a slice of Indonesia's consumer sector could face tight profit margins.
"Indonesia's retail business is very tight in margins because it doesn't have bargaining power with food producers like Indofood and Unilever," Pitoyo said.

"Whoever comes in as a Matahari partner has to be very efficient, including in logistics, to reap the benefit, or will have to face some losses."

Multipolar, which owns a 48 percent stake in Matahari, appointed Bank Of America Merrill Lynch (BAC.N) to become its strategic advisor to seek a global partner for Matahari. Hypermart is Indonesia's second-biggest hypermarket chain after PT Carrefour Indonesia, with 52 outlets in the world's fourth most populous nation, generating annual revenue of $1 billion. It told Reuters last month it is eyeing the top spot and aims to expand aggressively across the archipelago.