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Jumat, 01 Juli 2011

BUMI: Deleveraging to pay off - Mandiri

BUMI adjusted its accounting policy to comply with the IFRS. This, however, has minimal impact on its bottom line. Meanwhile, BUMI's real assets value and earnings are subject to future auditor assessment, in our view, as we noticed a discrepancy between PWC and Mazar’s accounting treatment on BUMI’s bottom line. PWC reported a net loss of US$ US$302mn for FY10 in Bumi Plc/s prospectus while Mazar reported a net profit of US$311mn. Consequently, if PWC is finally appointed, a downgrade in assets and earnings is likely. Yet, on the other hand, this would increase investor's confidence. We view that Bumi Plc's share should trade at a minimum 20% premium over the exercise price of its convertible bond (CB) worth US$2.07bn to be attractive. We adopt blended valuation methods to arrive at a new TP for BUMI of Rp3,700/share (slightly higher from previous TP of Rp3,665) which is still 12% discount from its NAV of Rp4,200/share (after conservatively excluding Dairi and Newmont assets value following the sale of 75% stake in BRMS). We maintain our Buy rating.

Cost increases faster than expected. Excluding the non recurring gains (forex gain, sale of investment and gain from derivative), the core pretax profit in 1Q11 was US$82mn, up 18%yoy. However, it is still below our expectation mainly caused by cash cost hike to US$48-49/ton (excluding royalties) higher than our previous expectation. Coal production growth in 2Q11 will be moderate at 15Mt since it remains wet. But it will be ramped up to 18-19Mt in 3Q-4Q11.

Unit of production depreciation method could reduce margin in later years. Applying unit of production depreciation method is only favorable for BUMI’s earnings in early years. But in later years, higher % of production followed by discounted selling price (due to increasing EcoCoal portion significantly and lower of Bituminous coal) could potentially reduce BUMI’s margin in later years. We have incorporated these into our forecasts.

Early repayment debt to CIC potentially worth US$2.8bn market capitalization. BUMI has clarified that CIC wants cash payment. But, it remains unclear whether it refers to the whole debt of US$1.9bn or only the 1st tranch of US$600mn that will be repaid in Oct 2011. BUMI last week indicated that they are still renegotiating with CIC for potential debt swap for the remaining tranches. The sale of 75% stake in BRMS is part of BUMI’s deleveraging plan by removing US$238mn BRMS’s loan carried on BUMI’s balance sheet. If BUMI successfully monetize the CB and deleverage its debt, our calculation shows that early repayment debt to CIC potentially save US$282mn which potentially raise BUMI’s market cap by US$2.8bn.

Reiterate Buy, potential upside remains from deleveraging and refinancing. We lower our earnings forecast mainly due to more conservative cost structure and earnings reduction from BRMS. BUMI has indicated its plan to refinance its loan at lower interest rate following its healthier balance sheet, which could bring upside potential on its future earnings. We reiterate our Buy rating with new TP of Rp3,700/share implying 16.9x adjusted PER11F.

Semen Gresik: SMGR to acquire 20% stakes in Kertas Kraft Aceh (SMGR, Rp9,600, Neutral, TP: Rp9,100) - Mandiri

􀂄 SMGR is investing Rp200bn in PT Kertas Kraft Aceh (KKA) or equal to 20% ownership in the company. The management expects the investment will be able support the company’s operation going forward, especially its cement sack paper production. The fund is budgeted on Rp3-5tn Capex this year.
􀂄 KKA is a state-owned cement sack paper manufacture which has been halted operationally since 2007. The State-Owned Asset Management Company of Indonesia has recently invited 18 investors, both domestic and international, to become KKA’s strategic partners in order to revitalize the company’s operation. The partnership fund needed is estimated up to Rp800-900bn which will be used to construct 2 boiler machines and improvement of production quality. KKA expects to start operating again by 2013.
􀂄 SMGR currently trades at PE11F 14.3x and EV/EBITDA 9.9x. We have Neutral recommendation on the counter.

Cement sector: Chinese company plans to build four cement plants in Indonesia (Overweight) - Mandiri

􀂄 China’s largest cement producer, Anhui Conch Cement, is reported to set up to four new cement plants in Kalimantan and Papua this year with investment worth of US$2.35bn. Of the total investment, around US$400mn would be invested in Tanjung, South Kalimantan, US$600mn in Tanah Grogot, East Kalimantan, US$600mn in Pontianak and remaining US$750mn in West Papua. The four plants would have a production capacity of 10,000tons per clinker per day, except one in Tanjung of 6,400 tons of clinker per day.
􀂄 Anhui investment would be in addition to two foreign players that have announced its investment commitment in cement sector in Indonesia earlier this year. Having Indonesian cement industry is a brand equity market, we don’t see any short term threat to existing local players. For long term, we think continue boosting production capacity is the key that to anticipate any gap filled in market by new players while demand further accelerates.

Bank Indonesia is thinking to further limit short term foreign debt - Mandiri

Bank Indonesia is recently conducting a study to limit the daily account position
for short term foreign debt (including vostro account, the foreigners rupiah denominated deposit) until 10% from equity. For now, Bank Indonesia has implemented a maximum limitation reaching 30%. This premise to lower it was basically related to high capital inflows to Indonesia nowadays that make use the account as temporary placement substitution, after the central bank restrict access to SBI by extending minimum holding period. Thus, the policy will lower banking sector vulnerability towards external short term risk. Moreover, the level for foreign liquidity in the banking sector is likely ample amid high capital inflows.

Thailand's election - implications for Indonesia, from Nick Cashmore - CLSA

Thailand is holding important elections this weekend and they will have implications for Indonesia as both parties are talking populist policies.

If the democrats win they have promised to lift the minimum wage by 25% over two years. Puea Thai, which backs Thaksin, has promised to lift minimum wages by 40%.

Either way, minimum wages will rise aggressively over the next two years. This will support consumption domestically but unless supported by higher productivity will also shift investment into more competitive economies.

Indonesia is likely to benefit from any shift in investment into alternative markets. We spoke this morning about the rise in industrial activity in Cikarang area in West Java and the papers this morning carried stories of investment by the Chinese and Koreans.

Private investment now stands at 30% of GDP, a 15-year high, but lags Indian and Chinese peers. We expect investment will continue to rise towards 33% of GDP as firms ramp up on capacity building coupled with modest public sector investment.

The most direct beneficiaries of greater investment will be the cement players and we have positive recs on all three with Indocement (INTP IJ) our preferred holding.

Unilever Indonesia (UNVR IJ), facing strong headwinds - Cut to Sell from Buy TP 12500

Consumer analyst Merlissa cut our recommendation for Unilever Indonesia (UNVR IJ) to Sell and TP Rp12,500 (from BUY with TP of Rp22,480).The TP of Rp12,500 implies 2.0x PEG. Unilever now trades at 30.0x P/E11CL, a 30% premium to its five year average of 23x.

Merlissa forecasts slower earnings growth amid intensified competition. We cut earnings forecast by 14.9% and 16.3% for 2011 and 2012 respectively. We also expect earnings to grow by a mere 11% CAGR in FY10-13CL, down from its 20% CAGR earnings growth in 2007-10 and also below its average peers of 20%.

Other key points from the report:

Tough to maintain margin. We believe price war is more likely than not, with consumer companies expanding their capacity to Indonesia - chiefly with P&G having decided to build US$100 mn factory here. Hence, this will likely limit Unilever's ability to raise price and will push ad spending higher.

P&G even without local factory, has been able to seize Unilever's market share, reducing it from 65% in 2005 to 51% in 2010.

Deteriorating cash flow. We believe Unilever will see a slower inventory turnover as market is saturated with competing products. We expect inventory days to stay at 55-60days, like what we have seen in 2004. Cash needed for working capital shall increase and Unilever will potentially borrow ST debt like it did in 2010. Hence, we expect the company to be in net debt position by 2012.


- A bit earlier than expected the Indo Govt just released the June CPI data.
They came in a bit higher than economists expected, but still in line.
- 0.55%MoM and 5.54%YoY versus expected 0.37% and5.4% respectively.
- The continued drop in YoY numbers (5.98% in May) will allow the Central Bank
more leeway to keep rates unchanged again at their next policy meeting.

Kamis, 30 Juni 2011

Bumi Resources: CIC prefers cash payment (BUMI, Rp3,000, Under review) - Mandiri

Based on Bisnis Indonesia interview with Mr Ari Hudaya, CEO of Bumi Resources (BUMI), it has been clarified that CIC prefers cash payment for its US$1.9bn debt rather than swapped it with convertible bond of US$2.07bn from the sale of 75% stake of BRMS to Bumi Plc.

At the analyst briefing last week, BUMI still plan to negotiate with CIC for potential debt swap with the CB. Beside that, there has been a talk in market that CIC was asking about 20% discount for swapping with the CB since the CB was offered out of the money.

This clarification should answer overshadow of CIC debt swap issue. So BUMI will still prepay the US$600mn of the CIC tranch 1 loan this year with 5% penalty (Please note that, taken into account 19% IRR and penalty, total cash that BUMI has to provide for the 1st tranch prepayment is around US$785mn).
This could bring negativity in near term for BUMI share since selling directly the CB with only 2% coupon sounds very challenging. And this will will bring questions to BUMI’s current shareholders about the new potentially unfriendly shareholder of 20.6% ownership in Bumi Plc

There is a trade off about earnings dilution from the sale of 75% stake in BRMS (that will no longer consolidated in BUMI’s income statement) and deleveraging plan in which BUMI would remove US$238mn of BRMS’s loan carried on BUMI’s balance sheet. Our calculation show that with the remaining of 12% stake in BRMS, BUMI’s FY12F net profit is potentially diluted by around US$60-70mn about (9% – 11% from our previous FY12F forecasts) which have brought negativity and selling pressure to BUMI’s share recently.

Currently we are still in a process reviewing our forecasts and rating.

S&P withdraws Energi Mega Persada rtg at the company's request - Reuters

Standard & Poor's Ratings Services said today that it had withdrawn its 'CCC+' corporate credit rating on Indonesia-based oil and gas producer PT Energi Mega Persada Tbk. (EMP) at the company's request.

At the time of the withdrawal, the developing outlook on EMP reflected our view that the company's rating hinged on the resolution of existing covenant breaches.

We could have raised the rating if EMP refinanced existing bank loans, adhered to its operating budgets and capital expenditure, and improved its financial performance in line with our expectations of the ratio of adjusted debt to EBITDA of about 6.5x in 2011.

We expected a maximum one-notch improvement in the rating on EMP under this scenario, considering the company's vulnerable business risk profile and highly leveraged financial risk profile. Conversely, we could have downgraded EMP if its liquidity deteriorated due to refinancing delays and covenant breaches, leading the company to alter or restructure any of its debt instruments. We would have considered this a default, based on our criteria.

Equity Explorer: JA Wattie (JAWA IJ): Rp450 Best proxy to upstream rubber - DBS

• JA Wattie (JAWA) is a diversified planter with the 2rd largest planted rubber area after Lonsum
• Undemanding on EV/mature (pro-rated for rubber estates) at US$10,895 (vs. US$14,198 peers average)
• Jump in maturity, resilient rubber prices will expand earnings by 31% CAGR over FY10-13F
• We value JAWA at Rp625/share (offering 39% upside potential); 41% of market cap is cash by end FY11F

The Business
A young, diversified and growing planter. JAWA is a diversified Indonesian planter involved in cultivating oil palm, rubber, coffee and tea. The attraction is its 9,355 ha of rubber estates, which is a third of its planted area. Its 15,740 ha of oil palm planted area is young with a 3-year average age profile, and is targeted to expand to over 22k ha by 2013F.

Undemanding on EV/mature area. Pro-rated for rubber estates’ share of mature area, JAWA’s FY12F rubber EV/mature area is currently US$10,895, or c.23% below peers’ average. The market has mispriced JAWA, because by end FY11F, c.41% of its capitalisation would be cash following its recent IPO.

Entering productive years. JAWA only started oil palm cultivation in 1999. We expect its own FFB output to grow at 45% CAGR over FY10-FY13F. A new 30 MT/hr CPO mill will likewise boost CPO output by 34% CAGR over the same period. We also expect rubber production to grow at 11% CAGR during the same period driven by new maturities.

The Stock
Based on DCF (WACC 12.8%, Rf 8.5%, Rm 13.5%, B 1.2x, TG 3.0%), JAWA is valued at Rp625/share. This implies 39% upside potential and 16.5x FY12F PE. Catalysts for the stock include a jump in CPO output from maturing estates, resilient rubber prices, aggressive new planting, and capacity expansion.

Risks. Lower-than-expected natural rubber and palm oil prices, stronger Rupiah, and failure to meet its internal expansion targets are key risks to our call.

Rubber Sector Rubber value chain: Position for consolidation - DBS

· Natural rubber (NR) asset prices are driven up the value chain on scarcity. Take positions in upstream and processors
· Motorisation, rising hygiene standards in emerging markets, mining, logistics, travel are driving demand
· But supply response is slow due to conversions to oil palm, long gestation period and erratic weather
· Top picks: KL Kepong, Goodpack and Hartalega. We also like JA Wattie and Sri Trang

Value chain to reverse up. Driven by decent margins, new
Chinese and Korean tyre brands have emerged over the last decade, causing fragmentation in global tyre makers. At the same time, high raw material prices allow only well-funded processors to survive. Hence, rising demand and continued consolidation in NR processing should improve margins of planters and processors.

Market is ignoring volume growth from consolidation.
NR prices have corrected from the high of US$5,745 – leading to a similar 6-12% drop in processor stocks prices. However, with sticky long term NR prices expected to stay above US$3,500, we believe the market is ignoring the potential volume growth from consolidation.

Mind the gap. We believe the huge gap between rubber (US$46b annual value) and palm oil (US$56b annual value) listed counters (i.e. c.US$16b vs c.US$96b capitalisation) reveals tendency for more M&A activities going forward.

Overlooked sector. We believe investors should position themselves in upstream planters and processors as scarce value of rubber assets are driven higher up the value chain.
We like KL Kepong for upstream exposure, Sri Trang as a leading processor, and Goodpack for its dominance in rubber logistics. GMG Global is initiated with a Hold rating, as we believe our favourable view is already priced-in. Further downstream, we like Hartalega for its ability to gain market share relative to its peers.

Gudang Garam - Paying out highest dividend in history - Deutsche Bank

Strong FCF gives clear pathway to higher dividend payout
GGRM has declared a dividend of Rp880/share, the highest in its history and a sign of management's intention to increase shareholder return. This represents a 41% payout ratio, the highest since 2006's 48%, and supports our thesis that GGRM is embarking on a pathway of a higher dividend payout due to its high earnings quality and strong free cash flow generation, which in our view will lead to a re-rating of the stock. We believe there is room to increase the dividend payout ratio from the current 41% to 100% due to its strong free cash flow generation. The dividend ex-date will be on July 26 and payment date on August 8.

Pricing power being underappreciated
GGRM has underperformed the JCI by 23% since September, even as it has proven its pricing power repeatedly, raising prices 19 times in the past 24 months by a total of 24%. In our view, this demonstration of pricing power warrants a further re-rating of the stock.

Trading at 25% discount to regional peers
GGRM is trading at 14.2x PE FY12F, which we view as undemanding due to its pricing power and higher dividend potential. Our DCF-based target price of Rp62,000 (34% upside potential) implies 19.1x PE FY12F, which would put it in-line with regional peer. Risks: excise policy and regulation.

SEA Coal Sector - Catalysts are stronger 2H11 earnings and rising coal prices, not 2Q11 results - Credit Suisse

œ We see small changes in QoQ profit for most coal companies in 2Q11 before earnings recovery to become more significant in 2H11 when output rises during the dry season in 3Q. For 2Q11, ASPs could surprise on the upside, which might lead to companies providing higher guidance for their FY11 ASP.

œ A significant improvement in earnings is expected in 2H11 driven by both prices and volume (higher production in dry season in 3Q). Improving earnings momentum and rising benchmark coal prices are expected to be the share price catalysts for the sector in the next six months.

œ We cut our FY11 earnings forecast by 7% for BORN with a 4% cut in ASP given the weakness in coking coal price. For INDY, we cut our FY11E profit by 11% on higher cost assumption. We maintain our profit forecasts for ADRO, HRUM, BANPU, SAR and PTBA.

œ We expect short-term share price weakness for INDY and BORN on the back of weak 2Q11. We see the weakness in share price of INDY as a buying opportunity due to its planned listing of Petroseas in August/September.

Bank Tabungan (BTPN IJ) company visit - CLSA

Dee recently visited BTPN and came away impressed with the operation and management. Currently BTPN loan book is 80% pension and 20% micro however increased emphasis and growth in micro should see this split go 70:30 within the next year.
BTPN currently trades broadly in-line with the Indonesian bank average. BTPN currently trades at 2.5x and 11.6x 12CL PB and PE (versus sector average 2.3x PB, 11.3x PE). However BTPN profitability and growth metrics are superior with ROA of 3.3% 11CL (vs. sector 2.6%) and ROE of 26.4% (vs. sector 22.2%) and total loan growth of 29% (vs. sector 22-24%). Please see attached for details.

The bull market for thermal coal - CLSA

The bull market for thermal coal I would say officially kicked off in 2006 when China became a net importer of coal that year. Newcastle coal prices took off from around $50 (hovering at those levels since 2004) to almost $200 in 2008.

The biggest challenge for India will be rising coal shortages

While China electricity consumption growth is set to decline over the next few years (note still accounts for the worlds biggest incremental demand), our latest 300 page "Powering Chindia" report (ask me if you want a copy) tell us today India will set the next stage of growth. They are where China was in 2002.

Per-capita power consumption in top provinces in India is at similar levels to bottom provinces in China

New power capacity addition is increasing rapidly and with this, power consumption is set to accelerate and growth over next few years will surpass that in slowing China. While share of coal-fired generation will decline in China, it is going to rise rapidly in India just given the sheer amount coal-fired capacity under construction currently.

Coal fired plants are driving most of India's capacity

One of the key constraints on India's power demand growth has been slow groth in power capacity. However, this is about to change. We expect conventional power capacity addition to go from 47GW in the 11th plan to 87GW in the 12th plan. Power -capacity adition rate to increase from 7.1% over the last five years to 9.3% over the next five. The rate of growth of thermal power capacity will be even higher.

All of this new capacity may not get enough coal. In fact, our calculations show that even projects based on domestic coal will have to import 30% of their coal requirements.

I would be buyer of Bumi, Indika and Harum.

Astra International (ASII IJ): Key proxy to consumption - CLSA

Astra is a key proxy to the region’s consumption story. It is now the fifth largest company by market cap in the region.

Astra has a strong presence in major sectors of the economy. Each division will keep on growing, but we see auto business and United Tractors as the main growth drivers in the future, at 15-20% cagr.
We raised our near term profit forecasts by 12-17% and our TP on the back of recovery in the 4W market, the strong momentum in the 2W and recovery of equipment and mining contracting business of United Tractors.
We note that there is near term risk on Astra due to market sentiment, and Astra being a key proxy is most vulnerable.
However, we think any weakness is a buying opportunity. There is still much upside to our estimates as GDP/capita rises and Astra’s businesses expand.
Maintain BUY on Astra. Our TP of Rp75,000 provides 21% upside from current level. Astra now trades at 12.8x PE12 and 11.3x PE13, in-line with the market.

Hexindo Adiperkasa: FY10/11 net income exceed our forecast (120% of ours) but inline with consensus (96% of consensus) (HEXA, Rp6,500, Buy, TP:Rp9,000) - Mandiri

HEXA’s financial year end 31 Mar. HEXA booked 12M10/11 net profit of US$43mn, which increase by 26.7% yoy.
12M10/11net income inline with consensus (96% of consensus) but above ours (120% of ours). From revenue to operating profit, HEXA’s results are within our expectations. The reason of HEXA’s net income above our expectation is Other income – net of US$3.1mn in Other Income (Charges). If this one-off income is excluded, HEXA’s net income is within our expectation.
At Rp6,500, HEXA is traded at FY11/12 PER of 12.4x.

Radiant Utama: Radiant acquires MOPU worth US$40mn (RUIS, Rp265, Not Rated) - Mandiri

Radiant Utama Interisco (RUIS), a small cap oil services company, acquires a mobile offshore production unit (MOPU) amounting to US$40mn from its Dubai-based partner. RUIS was only operator of this MOPU before the acquisition. This facility is then designated to Maleo PSC project in East Java owned by Santos.
According to CEO Sofwan Farisyi, the acquisition, which will be finalized by Jul11, will revise up its earnings forecast in 2011 to Rp33bn from Rp26bn
We have no rating on RUIS, but using company’s earnings forecast post-acquistion, RUIS is traded at PER11F 6.2x (lower than ELSA’s 13.3x)

Energi Mega: Reignwood pledges another 65mn shares (ENRG, Rp200, Buy, TP: Rp220) - Mandiri

In the latest filings to the Indonesia Stock Exchange, Energi Mega Persada (ENRG) reported that Reignwood Investment, a Thai-based investment company, pledged another 65mn shares after previously had the same action of 6.39bn shares. This stock pledge is now equivalent to 16.12% of total outstanding shares or worth Rp1.3tn at Rp200/share closing
We still have yet received any further details regarding the purpose of this stock pledge, however considering Reignwood has not been involved in oil and gas industry (mostly involved in consumer goods, sports, art, and financial services), we still view this step is done for financing purposes.
However, there is still a possibility of speculation view from Reignwood and a link with Vallares’ intention over emerging markets oil and gas assets to lesser extent.
We still maintain our Buy recommendation on ENRG, currently traded at EV/2P US$2.4/boe.

Government Mulls to keep Fuel Subsidize Price Unchanged - Mandiri

The government seems to avoid hiking non-subsidize fuel as it will likely cause an overshoot towards inflation. Hatta Rajasa, Ministry Coordinated for the Economy, said that an increase by Rp 500 per liter could generate 0.7% - 0.8% towards inflation, meanwhile an increase by Rp 1000 per liter could contribute 1% figure against inflation. They see that discipline and consumption tightening by conducting suasion approach seems to be a relevant approach regarding global oil price begins to trim. Furthermore, based on our calculation, the direct effect because of an increase by Rp 500 per liter could add inflation by 0.3% - 0.4% while an increase by Rp 1000 per liter could increase inflation by 0.7%-0.8%. Indicating that the indirect pass through is about about 0.2% - 0.4%.

DOID IJ: PT Delta Dunia Makmur : Restructuring ushers a new beginning; initiating with Buy - BUY TP 1350 - BoAML

Kicking off coverage with a Buy rating
We initiate PT Delta Dunia Makmur (DOID) with a Buy. DOID, via its 100%-owned subsidiary BUMA, is Indonesia's second largest local coal mining contractor in terms of coal output. It was listed on IDX in June 2001, acquired BUMA in Nov 2009, and is 40% owned by consortium, i.e. Northstar Equity Partners, TPG, GIC, & CIC - the latter 3 replacing Indra Wijaya since Dec 2010.

Five key reasons to buy DOID
1) A much more compelling valuation than UNTR (PUTKF, IDR20,000, C-3-7), trading at 33%/38% discount to UNTR's 2011/12E EV/EBITDA and at 26%/19% discount to UNTR's 2011/12E PE (after adjusting the depreciation and one off cost); 2) our DCF derived PO implies 35% upside potential; 3) we are upbeat on Indo coal volume ramp-up and DOID is a direct beneficiary; 4) weak 2Q headline NP seems priced in; and 5) we see near-term catalysts from new projects.

Weak 2Q headline net profit looks priced in
Consensus' FY11 NP stands at 2.5x (US$40mn) above our estimate. We believe the Street has underestimated depreciation and refinancing cost. But considering the stock is trading at the low end of the P/E and EV/EBITDA band, we think the market has already factored in somewhat bad 2Q earnings. While we see modest impact to share price, this will not impact our positive 12-month view on the stock.

A direct beneficiary of Indonesia coal ramp-up
We believe Indonesia's coal production will grow at 8% p.a. over the next three years supported by strong growth in seaborne coal demand, especially from China and India. We see DOID is now well positioned to capture a fair share of the growing business, thanks to improved balance sheet & capital management.

Stronger balance sheet after 18 months of restructuring
After its leveraged buy out (LBO) of BUMA in Nov 2009, DOID refinanced BUMA's loan twice (US$800mn last month), which saw its interest rate halved; its tenor and average loan life doubled; and debt to EBITDA ceiling going up by 0.75x. Post refinancing, BUMA is no longer faced with an excess cash flow sweep covenant for repayment of senior lenders. It has announced a US$138mn rights issue, which would ease its balance sheet further & remove share-price overhang.

Vallar: China Investment Corp wants BUMI paid cash - Reuters

London-listed Vallar , the controlling shareholder of Asia's biggest thermal coal exporter Bumi Resources , said sovereign wealth fund China Investment Corp wanted its $1.9 billion loan to Bumi to be repaid in cash.

"CIC wants cash, not swap its loan with CB (convertible bonds)," Vallar's CEO Ari Hudaya told Reuters.

Indonesia y/y June inflation seen just above 5 pct-stats bureau head - Reuters

Indonesia's June inflation is expected to be slightly above 5 percent from a year ago, Rusman Heriawan, chief of the country's statistics bureau said on Tuesday, triggering expectations that the central bank will have room to hold rates again when meeting on July 12.

Inflation had slowed to a seven-month low of 5.98 percent in May as food prices eased and rupiah appreciation helped curb imported inflation.

Semen Gresik to raise capacity by 12 pct next yr - Reuters

Semen Gresik , Indonesia's largest cement maker by output, aims to raise capacity to 23 million tonnes next year from 20.5 tonnes currently, CEO Dwi Sutjipto said on Tuesday.

The company, which sees production this year at 19.5 million tonnes, plans to build a plant in Kalimantan worth $350 million, in addition to two planned factories in Sumatra and Java islands worth $350 million each.

It also plans to delay issuing $300 million of bonds to 2012 from an earlier plan in the first half this year, said Sutjipto.

Triwira bidik penjualan naik 20% - Bisnis

JAKARTA: PT Triwira Insanlestari Tbk, anak usaha grup Hengtarco menargetkan penjualan bersih tumbuh 15%-20% tahun ini didukung diversifikasi usaha ke pertambangan.

Direktur Utama Triwira Insanlestari Tommy Lybianto mengatakan perseroan memang berniat menggarap bisnis tambang batu bara dari sebagai inti bisnis perusaaan yang sebelumnya menggeluti usaha pengadaan alat-alat pertambangan, otomotif dan alat-alat keselamatan kerja karyawan.

"Progres perusahaan patugan telah kami kuasai di Kalimantan pada semester II, sehingga perjualan dan laba bersih dapat naik tahun ini," tuturnya saat ditemui Bisnis belum lama ini.

Perusahaan yang dimaksud yakni usaha patungan dengan Rudy Said dengan nama PT Triwira Akademi Protecsindo. Adapun usaha patungan tersebut bergerak di bidang jasa pelatihan, sertifikasi dan konsultan.

Penyertaan Perseroan di PT Triwira Akademi Protecsindo tersebut sebesar 99% sehingga transaksi tersebut bukan merupakan transaksi material maupun transaksi benturan kepentingan tahun lalu.

Selain itu, Tommy menuturkan, anak usaha perseroan lainnya PT Triwira Global Resource, nantinya akan berkonsentrasi pada pemasaran komoditas pertambangan seperti batu bara.

Tommy menjelaskan, tahun ini perseroan menargetkan pertumbuhan laba bersih menjadi Rp8,5 miliar, dibandingkan dengan periode yang sama periode sebelumnya Rp1,66 miliar.

Sedangkan penjualan diharapkan tumbuh 15%-20% menjadi Rp170 miliar, dibandingkan dengan periode yang sama periode sebelumnya Rp144,36 miliar.

Ditempat yang sama, Direktur Keuangan Triwira Insanlestarai Bigner Situmorang mengatakan perseroan menjelang semester I/2011 telah melunasi sejumlah pinjaman bank a.l. PT Bank CIMB Niaga Tbk. Namun dirinya enggan menyebutkan berapa jumlah pinjaman yang dilunasinyatersebut.

Tahun ini perseroan mengangarkan belanja modal yang meningkat 10% menjadi Rp230 miliar, dibandingkan dengan tahun sebelumnya Rp209 miliar.

Belanja modal perseroan digunakan untuk pembelian alat-alat pertambangan seperti kontraktor, excavator, bulldoze, dan sejumlah truk yang nilanya mencapai Rp40 miliar.

"Belanja modal perseroan telah digunakan sekitar Rp100 miliar digunakan untuk pembelia alat-alat kebutuhan pertambangan kami," katanya.

Hingga akhir tahun lalu, PT Hengtraco Protecsindo menguasai saham berkode TRIL sebanyak 74,43%, PT Kereta Api Indonesia 6,61%, dan Merrillynch, Pierce, Fenner and Smith Securities Account sebanyak 5,88%. Sedangkan sisanya dimiliki publik.

Rabu, 29 Juni 2011

LSE welcomes Bumi to main market - Insider Stories

Bumi Plc, formerly dubbed dubbed Vallar Plc, today joins the main market of the London Stock Exchange (LSE), with a premium listing, becoming the third Indonesia focussed company to join the main market with a premium listing.

Bumi comprises coal mining businesses PT Bumi Resources Tbk with 25% shareholding and becomes 28.9%, and 84.7% shareholding in PT Berau Coal Energy Tbk, and a portfolio of base metals, iron ore and precious metals assets of PT Bumi Resources Minerals Tbk with upcoming ownership of 75% stake.
Bumi Plc has significant coal producing assets in Indonesia and is incorporated in the UK.

“We are delighted to welcome Bumi to the main market today. A London flotation affords the company access to the broadest pool of international capital in the world, listing, and trading alongside its global peers. A premium listing ensures it is subject to the highest regulatory standards, and makes it eligible for inclusion in the internationally recognised and tracked FTSE indices,” said Tracey Pierce, Director of Equity Primary Markets at London Stock Exchange Group, in an official statement today.

The company eligible to be the first Indonesia-focused company to enter FTSE100. About 52 companies from South East Asia now listed on London Stock Exchange markets.

Bumi Resources - Too complicated for now; rating cut to U/P PO 2.900 - BoAML

Sector: Bumi Resource (Bumi IJ)
Price: Rp 3,025
Recommendation: Underperfrom (PO Bt2,900)
Market Cap: US$ 7,287mn

Another restatement in 1Q11
From 1Q, BUMI Resources started applying International Financial Reporting Standards and only does proportionate consolidation (ie it only consolidates its 70% stake in Arutmin and 65% stake in KPC vs. previous method of consolidating 100% and taking them out at MI). We advise investors to use the historical figures for BUMI in Bumi PLC’s prospectus as a comparison. It seems those figures have applied IFRS.

BUMI was loss-making in 2010: PwC report
According to Bumi PLC’s prospectus prepared by PricewaterhouseCoopers LLP, BUMI posted a net loss of US$302mn in 2010, compared to a profit of US$311mn reported in BUMI’s 2010 financial statements released on 1 April. The key differences (putting aside the application of IFRS) we noticed are much lower EBIT and US$283mn impairment loss on termination of sales of BUMI’s 20% stake in Gallo Oil to Florenceville (see the complete table in page 3).

Analysis of 1Q numbers: cost surging up, NP disappointing
Due to the IFRS restatement, we are only comparing BUMI’s 1Q headline NP with our FY estimate. From our estimates, we found: 1) If we strip out gain from derivative transaction, BUMI’s net profit would come in at US$53mn (10% of our full-year estimate; 2) Unit cash cost ex. Royalty in 1Q rose US$6/t from 2010 average (or 17%); 3) Selling expense in 1Q rose US$1.32/t from 2010 average (or 24%); 4) Total debt as of March rose by a slight US$19mn from December 2010.

Cutting earnings estimates
We cut our earnings estimate by 11% for 2011 and 31% for 2012 (we took out
BRM contribution as it will be transferred to Vallar). Still, we see downside in our 2011 earnings considering 1Q EBIT accounts for 16% of our full-year estimate as we give BUMI benefit of the doubt for higher ASP and lower stripping ratio in the next 9 months. We cut our PO by 13% to Rp2900 (13x 2012E PE) assuming CIC’s US$600mn got repriced.

Too complicated and not that cheap
Coupled with US$2bn bond issuance by Vallar to BUMI, which would be earnings dilutive and have no direct cash flow, we find BUMI too complicated. It is not exactly cheap also (do note 1Q results were not audited by PwC). Assuming no debt, or EBIT time 45% tax rate, BUMI would still trade at 10x 2011E and 9x 2012E PE. We cut BUMI from Neutral to U/P. For direct coal play, we prefer ADRO, SAR or ITMG.

Perusahaan Gas Negara: Buy; Rp3,975; TP Rp4,815; PGAS IJ US$200m budgeted capex - DBS

PGAS is budgeting US$200m capex for the year, which will be financed internally. This capex will be for the construction of LNG Terminal in Jakarta and Belawan. PGAS is also finalizing the agreement to secure LNG supply from Tangguh field. Supply from Belawan will be distributed through PGAS’ pipeline to meet the needs of power plants in Sumatra as well as industry players there. PGAS is also finalizing a new gas field acquisition, which it will be a minority shareholder.

On another note, PGAS’ shareholders have agreed on dividend payout of 60%. PGAS has paid interim dividend of Rp10.2 per share on 4 January 2011, and the final dividend to be paid will be Rp144.24 per share.

PGAS’ capex plans and dividend payment came in within our expectation. We reiterate our Buy call for PGAS for its promising outlook and attractive valuation. At current valuation of 12x FY11PE, the share trades at a discount to regional gas peers of 16x. However, it offers higher yields of 4% against peers’ average of 2%.

Mitra Adiperkasa (Initiating coverage with Outperform) - Time to go shopping - MACQUARIE

We initiate coverage of MAPI with an Outperform recommendation and Rp5,000 valuation/price target (representing 24.0x FY11E PER and 17.4x FY12E PER). We believe MAPI provides investors with compelling leverage to Indonesia's structural consumption/emerging middle class growth thematic, at a price we believe remains attractive (18.9x FY11E PER). With average daily trading liquidity now at US$1.0m (with a US$314m free-float market cap), the stock is also becoming increasingly investable for medium-sized institutions.

Leverage to Indonesia's emerging middle class
MAPI is an emerging retailer and distributor of branded consumer products, operating a total of 65 different retail concepts, many of which are licensed from leading international brand owners (including Sogo, Starbucks, Reebok, and Zara). The company's stores are mostly located in Indonesia's upmarket malls, where MAPI has leases over an average of c30% of these malls' total lettable area – a footprint we believe gives the company a powerful strategic advantage.
We believe the growth outlook for the business remains bright. Since FY95A, MAPI has grown its store base at a 23% CAGR from 40 to 854 outlets (as at FY10A), and a further 200–300 store openings (23–35%) are planned for FY11E (including in three new cities in Sulawesi, Kalimantan, and Papua). Meanwhile, sales growth has averaged 18.6% over the past five years, and is targeted at 20–25% pa moving forward. We highlight that MAPI's sales per capita outside of Jakarta are still less than US$1 (compared to US$15–40 in Jakarta), illustrating the extent of the leverage MAPI has to a steady broadening in Indonesian middle class (currently estimated at only 30m people, or one eighth of Indonesia's total).

Margins look set to rise; consensus looks too light
In addition to the robust top-line growth outlook, we believe MAPI is well placed to deliver EBIT margin expansion over the medium term from current relatively-low levels of 9.5% in FY10A (we are forecasting a 70bp improvement in FY11E). As a result, our FY11E EPS estimates are 14.5% above consensus (which is factoring in flat margins in FY11E), which we believe is too conservative. We also see scope for further margin improvement moving beyond FY11E.
Key to this trend will be the likely slowdown in the addition of new start-up brands to MAPI's portfolio, which typically have a depressing impact on short term profitability (with new brands often taking up to three years to break even). In addition, the recent discontinuance of the unprofitable Harvey Nichols brand (which single-handedly reduced FY10A EBIT margins by c85bp) will materially boost FY11E YoY margins. Finally, we also expect MAPI's effective tax rate to decline from an estimated c28% in FY11E towards c23% over the medium term.

Principal risk needs to be borne in mind
We see the largest risk to MAPI as being a loss of principal relationships over time – especially if Indonesia were to eventually lift the regulation prohibiting foreigners from operating specialty stores (this excludes department stores, which represent c20% of FY11E earnings). However, we believe this risk is heavily mitigated by MAPI's powerful leasehold property position; the large switching costs of relationship termination; and MAPI's brand diversification. MAPI has now also developed 12 of its own proprietary retail concepts.

Gudang Garam - Pricing power may lead to higher dividends; raising TP - Deutsche

Pricing power and dividend potential being underappreciated
Gudang Garam has underperformed the JCI by 23% since September, even as it has proven its pricing power repeatedly, raising prices 19 times in the past 24 months by a total of 24%. In our view, this demonstration of pricing power warrants a further re-rating of the stock. We also believe there is room to increase the dividend payout ratio from the current 36% to 100% due to its strong free cash flow generation. We raise our target price to Rp62,000 (from Rp43,500), making GGRM our top pick in the Indonesia consumer space. Buy.

Positive excise changes on the horizon and superior operating environment
On top of the ongoing excise unification, the government plans to close a loophole in the excise system that allows lower excise for subsidiaries, which could affect 10-25% of industry volume. GGRM is the only major cigarette company without a production subsidiary. In addition, Indonesia is one of the few places in the world where volumes are still growing. The top 10% income bracket smokes c. 5x more (and 36% pricier) cigarettes than the bottom 10%, suggesting room for growth as GDP/capita rises. The price of a pack of Marlboro is 40% cheaper than in India even though income per capita is 2.5x more (i.e. room for price increases).

Low foreign ownership on overblown corporate governance concerns
In our view, the primary reason why foreigners have sold c. US$130m of GGRM shares since September is on unfounded concerns on Surya Air, which is now primarily for internal use, and KDM, the cigarette company being run by the son of the CEO, which does not compete directly with GGRM.

Trading at 24% discount to regional peers; raising target to Rp62,000
We rollover our DCF valuation to 2011 with a new target price of Rp62,000 (32% upside potential) implying 19.1x PE FY12F, in-line with valuations during its 1994- 98 growth phase. Despite minimal earnings revisions, our increase in TP is primarily due to rollover to 2011 and WACC decrease to 12.3% (from 13.4%). Risks: excise policy and regulation.

Destocking has created a big buying opportunity - CLSA

I have just returned from a week vacation. For now I am feeling very much recharged. From stock market volume point of view, I think I didn’t miss much. Not much improvement last week, very quiet. Summer, school holiday, and QE3/QE2+ uncertainties have translated into a sleepy market.

But CLSA on the ground specialist, Amie “Komodo” Liem is always full of energy. She went to her hometown Cilacap in Central Java to find out what’s going on there. The city is an industrial area. Holcim (SMCB IJ) has its biggest cement plant (7.2mn tones) there. State owned oil and gas company Pertamina has their biggest refining facilities (348k bpd) in Cilacap.

Iron ore mining in some selected areas and better incentives for teachers have contributed to the strong economy in the region. Car sales are very strong with dealers set around 30% higher sales target for this year. Retailer Alfamart (AMRT IJ) has a strong presence with no less than 40 outlets in Cilacap alone.

On a separate issue, there has been an interesting divergence of performance in resources companies share prices and underlying commodity price. This is especially true in the gold and coal space where prices of commodity has been holding up very well while their respective miners got indiscriminately sold off.

While I would agree it is not easy to quantify the real demand for bullion, demand for coal is a different story. Our recent China Reality Research showed that coal inventory at major ports and powerplants are critically low. Meeting with some Chinese coal traders (representing state owned power plants + privately owned steel mills) here last week tell us the same story. They desperately need to source coal (each contract size from 1-3mm tons/annum). According to the traders, most of the 2H2011 coal output of major coal miners have been sold out and they need to go down to those smaller miners (those abt 5-10mt pa) who are more willing to sell on spot.

Due to China's tightening policy, the short term cost of capital gas been so high that owners of slack resources would apparently rather sell them at discount to quoted prices so they can release capital that might be needed. This has translated to critically low stock piles in commodities such as coal, copper and even rubber. (note: Copper stockpiles monitored by Shanghai Futures Exchange declined to 21 month low). As we head into peak demand season 4Q, we expect resumption of restocking in the 3Q.

Destocking has created a big buying opportunity. I would be buyers of Bumi (BUMI IJ), Borneo (BORN IJ) and Harum (HRUM IJ) .

Selasa, 28 Juni 2011

Bumi Plc to raise 3.9% stake in BUMI - Insider Stories

A number of shareholders in PT Bumi Resources Tbk (BUMI), Indonesia's largest thermal coal exporter, has agreed to sell an aggregate of 800.33 million shares in BUMI.
In an official statement published tonight, the shares are representing 3.9% of the issued ordinary share capital of Bumi Resources.

The shares will be swapped with 13.88 million of Bumi Plc's voting ordinary shares, so-called step-up transactions. These transactions are expected to close on or around 5 July 2011. In return, Bumi Plc's shareholding in Bumi Resources will be increased to approximately 28.9% from 25%.

As a result of the issue of Bumi Plc voting ordinary shares to the selling Bumi Resources shareholders, 5,95 million Bumi suspended voting ordinary shares, issued to the Bakrie Group on the closing of the transaction, will convert into Bumi voting ordinary shares on a one-for-one basis.

Senin, 27 Juni 2011

PGN Bagi Dividen Rp3,7 Triliun - Vivanews

PT Perusahaan Gas Negara Tbk membagikan dividen final untuk tahun buku 2010 sebesar Rp3,74 triliun atau setara dengan 60 persen dari laba bersih. Pembagian dividen ini ditetapkan dalam rapat umum pemegang saham tahunan (RUPST) yang dihadiri 84,8 persen pemegang saham di Grand Hyat Hotel, Jakarta, Senin, 27 Juni 2011.

Dividen itu telah dibagikan dalam bentuk dividen interim berdasarkan surat keputusan direksi pada 6 Desember 2010 sebesar Rp247 miliar atau Rp10,2 per saham, dan telah dibayarkan pada 4 Januari 2011.

"Sisa sebesar Rp3,5 triliun atau Rp144,24 per saham akan dibayarkan tunai kepada pemegang saham," kata Direktur Utama PGN, Hendi Prio Santoso, dalam konferensi pers usai RUPS di Jakarta, Senin, 27 Juni 2011.

Selain itu, RUPS menyetujui penunjukan Purwantono, Suherman, dan Surja, dari kantor akuntan publik Ernst and Young untuk mengaudit laporan keuangan perseroan untuk tahun buku 2011. Selain itu, kantor akuntan publik S Mannan dan Rekan ditunjuk untuk melaksanakan audit program kemitraan serta bina lingkungan tahun buku 2011.

Sementara itu, pada 2011, belanja modal PGN mencapai US$200 juta. Belanja modal tersebut digunakan untuk pembangunan terminal LNG, penyelesaian pembayaran tanggungan pada tahun sebelumnya, dan penambahan jalur distribusi.

Pengamat: Investasi Asing ke Indonesia akan Meningkat - Antara

Jakarta (ANTARA News)- Pengamat pasar uang, Farial Anwar memperkirakan investasi asing ke pasar domestik akan meningkat, terutama dari investor Amerika Serikat (AS) dan Eropa, melihat pertumbuhan ekonomi nasional yang terus tumbuh.

Pelaku asing lebih optimis menempatkan dananya di kawasan Asia, khususnya Indonesi,a yang ekonominya diperkirakan akan dapat mencapai tujuh persen, katanya yang juga Direktur Currency Management Group di Jakarta, Senin.

Menurut Farial Anwar, Indonesia memiliki berbagai daya tarik seperti tingkat suku bunga rupiah yang mencapai 6,75 persen, stabilitas keamanan yang terjaga, serta kenyamanan berinvestasi yang mendorong mereka lebih tertarik ke pasar domestik.

Arus modal asing yang masuk ke pasar domestik selama hanya bermain di pasar finansial seperti pasar saham, pasar uang, dan masuk ke instrumen Bank Indonesia, karena para hedge fund yang memiliki dana itu melakukan investasi dalam jangka pendek, ucapnya.

Karena itu, lanjut dia, pemerintah harus dapat menarik investor asing melakukan investasi dalam jangka panjang seperti membuat pabrik baru sehingga membuka lapangan kerja baru yang pada gilirannya memberikan pendapatan kepada masyarakat.

"Kami optimis pemerintah sedang berusaha ke arah agar pertumbuhan ekonomi nasional dapat tumbuh lebih baik," ucapnya.

Peluang makin besarnya arus modal asing ke Indonesia, menurut dia, sangatlah besar karena pertumbuhan ekonomi AS menurun, pengangguran meningkat bahkan penjualan properti merosot sebesar 30 persen.

Selain itu, krisis utang yang terjadi di Eropa seperti Yunani yang diperkirakan akan mengalami gagal bayar, dan China yang ekonominya mulai melambat.

Karena itu, menurut dia pemerintah harus dapat mempersiapkan diri lebih baik lagi agar investor asing berminat untuk menginvestasikan dananya di dalam negeri.

Apalagi sejumlah investor asing menyatakan, Indonesia masih merupakan pasar potensial yang perlu digarap lebih baik ketimbang di Amerika Serikat dan Eropa yang masih menerapkan tingkat suku bunga rendah, katanya.

Bumi to distribute Rp41.78/share dividend - Insider Stories

PT Bumi Resources Tbk (BUMI), Indonesia's largest thermal coal exporter, will distribute Rp41.78 per share dividend, representing 30% of its net profit last year.
The dividend distribution has been approved by shareholders meeting today. Last year, Bumi distributed Rp27.68 per share dividend. The company also paid Rp50.60 per share dividend in 2009 and Rp45 per share in 2008.

Bumi bagi dividen Rp840,16 miliar - Bisnis

JAKARTA: PT Bumi Resources Tbk membagikan dividen senilai Rp41,78 per saham atau senilai total US$93,35 juta, sekitar Rp840,16 miliar, dari total laba bersih 2010 sebesar US$311,17 juta. Direktur Bumi Resources Dileep Srivastava mengatakan dividen dengan rasio terhadap laba bersih (payout ratio) sebesar 30% tersebut telah disepakati investor publik dalam rapat umum pemegang saham tahunan (RUPST) yang usai siang ini.

"Dividen yang dibagikan nilainya sebesar Rp41,78 per saham," tuturnya kepada pers, siang ini.

Pemegang saham, lanjutnya, juga telah memberikan izin kepada manajemen untuk menjaminkan sebagian atau seluruh utangnya kepada pihak eksternal. Penjaminan tersebut diperlukan untuk meraih dana eksternal.

Perusahaan andalan grup Bakrie ini pada tahun lalu meraup pendapatan US$4,36 miliar, naik 19,13% dibandingkan dengan periode sebelumnya US$3,66 miliar. Kewajiban dan ekuitas perseroan sebesar US$8,77 miliar dengan posisi kas sekitar US$253,41 juta.

Pada penutupan perdagangan sesi pertama, harga saham perseroan berkode BUMI tersebut melemah 3,2% dibandingkan dengan posisi pembukaan pagi, ke level harga Rp3.025 per saham. Nilai kapitalisasi pasarnya mencapai Rp62,48 triliun.

Antam Bangun Lima Proyek Pengolahan Hasil Tambang - Tempo

TEMPO Interaktif, Jakarta - PT Aneka Tambang (Persero) Tbk mengembangkan lima proyek pengolahan hasil tambang. Hal itu dilakukan untuk mengantisipasi penerapan Undang-Undang Nomor 4 Tahun 2009 tentang Pertambangan Mineral dan Batubara. Undang-undang itu mengamanatkan dilakukannya hilirisasi atau pengembangan industri pengolahan.

Seperti diketahui, Undang-Undang Minerba diundangkan pada 2009 dan akan diberlakukan pada 2014. Dengan adanya beleid ini, maka kegiatan pengolahan dan pemurnian pertambangan wajib dilakukan di dalam negeri. Dengan pengolahan dan pemurnian dilakukan di dalam negeri, maka bahan tambang yang diekspor memiliki nilai tambah.

Presiden Direktur Antam Alwin Syah Loebis berharap penerapan tersebut akan meningkatkan nilai tambah bagi perusahaan dan meningkatkan kinerja keuangan perusahaan. “Dengan proyek ini, kami harap bisa memberikan nilai tambah terhadap cadangan kita yang ada di seluruh Indonesia,” ujarnya saat rapat dengan Komisi Energi DPR, di Jakarta, Senin, 27 Juni 2011.

Alwin menyatakan bahwa proyek pertama adalah proyek chemical grade alumina (CGA) Tayan, Kalimantan Barat, ini rencananya akan berproduksi dengan kapasitas 300 ribu ton. “Kami harap Januari 2014 bisa beroperasi komersial,” kata dia. Pabrik yang nilai investasinya mencapai US$ 450 juta ini pembangunannya sudah dimulai. Sebagian dana berasal dari pinjaman JBIC, Mizuho, dan STB senilai US$ 290 juta. “Biaya sisanya kerja sama G to G dengan Jepang,” kata dia. Rinciannya adalah Indonesia 80 persen dan Jepang 20 persen.

Kedua, proyek feronikel Halmahera yang bernilai sekitar US$ 1,6 miliar, termasuk dengan power plant. Proyek ini berkapasitas produksi sebesar 27 ribu ton nikel feronikel. Listrik yang akan kita konsumsi mencapai 260 mW. “Kami sudah tanda tangan kerja sama dengan PLN karena mereka yang akan suplai listrik, nilainya sekitar US$ 600 juta. Rencananya, akhir tahun ini bisa mulai pembangunan konstruksi," ujarnya.

Proyek berikutnya adalah modernisasi dan optimasi untuk peningkatan efisiensi pabrik feronikel di Pomala, Sulawesi Tenggara. Proyek ini guna memperbaiki dan meningkatkan efisiensi dari pabrik feronikel. “Biayanya sekitar US$ 450 juta,” kata Alwin.

Keempat adalah proyek nikel big iron di Sulawesi Tenggara dan nilainya sekitar US$ 400 juta. Terakhir, adalah proyek smelter grade alumina di Kalimantan Barat senilai US$ 1 miliar. Proyek ini akan mulai dibangun pada 2012.

Anggota Komisi Energi, Satya W. Yudha, menyatakan akan mendukung rencana pembangunan pabrik pengolahan ini. Namun, seiring dengan pemberlakukan UU Minerba, Menteri Perindustrian telah mengeluarkan Peraturan Menteri. Dia berharap jangan sampai pemberlakukan Permen itu dijadikan pengalihan agar pengusaha tambang memilih membayar pajak daripada membangun smelter atau pengolahan di dalam negeri. “Kelak yang ekspor bahan tambang mentah (raw material) akan kena bea keluar dan penalti,” kata dia.

Penjualan Sawit Astra Agro Naik 27% - Detikfinance

Jakarta - Volume penjualan minyak sawit mentah alias crude palm oil (CPO) PT Astra Agro Lestari Tbk (AALI) sebanyak 474.772 ton untuk periode Januari-Mei 2011, angka ini naik 27,1% dari periode yang sama tahun lalu sebanyak 373.631 ton.

Menurut Investor Relations AALI Yarmanto, naiknya volume penjualan tersebut atas kontribusi tumbuhnya produksi CPO salah satu perusahaan Grup Astra itu sebanyak 28,3%.

"Harga rata-rata CPO AALI sampai dengan Mei 2011 mengalami kenaikan sebesar 22,1% yaitu dari Rp 6.588 per kg pada periode yang sama tahun lalu menjadi Rp 8.043 per kg," katanya dalam keterangan tertulisnya, Senin (27/6/2011).

Sementara untuk harga rata-rata kernel & PKO, menurutnya, masing-masing meningkat sebesar 88,5% dan 83,7% menjadi Rp 6.160 per kg dan Rp 13.895 per kg.

Ia menambahkan, volume ekspor CPO Indonesia tahun 2011 diperkirakan akan mencapai 17,47 juta ton. Tahun lalu, volume ekspor CPO Indonesia mencapai 16,45 juta ton, mengalami penurunan sebesar 2,9%, dari 16,94 juta ton di tahun 2009.

"Sedangkan untuk negara tujuan utama ekspor CPO Indonesia pada tahun 2010 adalah India, EU dan China," katanya.

Ketiga negara tersebut masing-masing menyerap 32,1% (5,29 juta ton), 16,6% (2,73 juta ton) dan 14,4% (2,37 juta ton) dari total ekspor Indonesia.

Sumalindo divestasi Kalimantan Powerindo - Bisnis

JAKARTA: Rapat umum pemegang saham PT Sumalindo Lestari Jaya Tbk menyepakati penjualan 62,5% saham PT Kalimantan Powerindo. Wakil Direktur Utama Sumalindo Lestari Jaya David mengatakan sebanyak 50,93 juta saham anak usaha itu dilepas kepada PT Bangun Djaya Perkasa.

Dengan pelepasan anak usahanya itu perseroan akan mendapat dana sebesar Rp46,8 miliar. "Divestasi anak usaha itu dilakukan untuk memperkuat modal kerja kami. Diharapkan dapat terlaksana kuartal III/2011," ujarnya seusai RUPS, hari ini.
Dalam RUPS hari ini juga disepakati untuk tidak ada pembagian dividen pada tahun ini meskipun pada akhir tahun lalu perseroan mencatatkan laba. "Kalau dari bottom line memang terlihat ada laba, tapi itu dari non operaional. Secara kas kami juga masih berat, karena itu kami belum bisa bagikan dividen," ungkapnya.
Pada akhir tahun lalu, emiten yang bergerak di industri kayu dan pengolahannya ini membukukan laba bersih sebesar Rp4,55 miliar. Jumlah tersebut melonjak dari tahun sebelumnya yang mencatat rugi sebesar Rp103,82 miliar.

Perolehan laba itu terjadi karena perseroan menekan beban keuangan perseroan menjadi Rp73,74 miliar dari Rp90,94 miliar. Sementara penjualan Sumalindo Lestari Jaya selama tahun lalu turun 11% menjadi Rp592,24 miliar dibandingkan dengan periode yang sama pada tahun sebelumnya sebesar Rp667,3 miliar.
Pada perdagangan siang ini, harga emiten berkode saham SULI berada pada level Rp138, melemah 1,43% dari penutupan akhir pekan lalu dan menjadikannya berkapitalisasi pasar sebesar Rp341,14 miliar.

Bakrieland raih penjualan Rp950 miliar - Bisnis

JAKARTA: PT Bakrieland Development Tbk sepanjang Januari hingga Mei tahun ini telah membukukan penjualan sebesar Rp950 miliar atau 50% dari target sepanjang tahun ini sebesar Rp1,9 triliun. Presiden dan CEO Bakrieland Development Hiramsyah S. Thaib mengatakan perseroan optimistis dapat memperoleh penjualan sesuai dengan target tahun ini. Pasalnya, kata dia, kecenderungan di sektor properti penjualan semester II akan lebih besar dari semester I.

"Penjualan dari Bogor Nirwana Residence di Bogor selama Juni-Juli saja diperkirakan akan mewakili 40% dari target akhir tahun ini sebesar Rp600 miliar. Bakrieland sendiri dapat membukukan rata-rata penjualan rumah sebesar Rp50 miliar setiap bulan, kami optimis target penjualan hingga kahir tahun dapat terpenuhi,” tutur Hiramsyah di sela-sela acara family gathering Bakrieland di Bogor, kemarin.
Selain itu, Hiramsyah menuturkan pada tahun ini perseroan menganggarkan belanja modal (capital expenditure/capex) sebesar Rp1,5 triliun untuk merealisasikan proyek-proyek properti dan infrastruktur penunjang.

Dana tersebut digunakan untuk menyelesaikan Pullman Bali Legian Nirwana di Bali sebesar Rp100 miliar, membangun kluster D di kawasan Bogor Nirwana Residence sebesar Rp400 miliar, sebesar Rp400 miliar hingga Rp600 miliar digunakan untuk pemeliharaan setiap proyek dan sisanya untuk pengembangan proyek Bakrieland lainnya.
Lebih lanjut Hiramsyah menuturkan perseroan akan mengembangkan perumahan seluas 800 hektare di kawasan Bukit Jonggol Asri, pengembangan tahap pertama ini ditargetkan akan dimulai tahun depan. Seperti diketahui Bakrieland Development berencana mengembangkan Bukit Jonggol menjadi kota mandiri yang diberi nama Sentul Nirwana di atas lahan seluas 12.000 hektare.

Menurut Hiramsyah pengembangan Sentul Nirwana tersebut membutuhkan waktu 6 tahun. "Sampai akhir tahun ini kami menginvestasikan dana sebesar Rp200 miliar untuk Sentul Nirwana dengan pembangunan tahap I akan dimulai 2012 nanti. Kami akan melaunching beberapa cluster perumahan yang akan dijual pada kisaran harga Rp600 juta hingga Rp800 juta, pasar yang kami bidik kelas menengah dan atas" imbuhnya.
Dia menuturkan perseroan akan mengawali pengembangan Sentul Nirwana dengan pembangunan infrastruktur yang bertujuan untuk mematangkan konsep hunian. Dia menambahkan kawasan Sentul Nirwana akan terintegrasi dengan Sentul City dan proyek Bogor Nirwana Residence.

Saat ini Bakrieland Development memiliki proyek unit usaha city properti yakni kawasan Rasuna Episentrum di Kuningan, Jakarta Selatan dan perumahan Sentra Timur Residence, juga proyek unit rumah tapak (landed house) yakni Bogor Nirwana Residence di Bogor, Ijen Nirwana Residence di Malang dan Batam Nirwana Residence di Batam.
Selain itu, Bakrieland Development juga memiliki unit usaha hotel dan resorts yakni Pullman Bali Legian Nirwana, Nirwana Bali Resort, Ubud Nirwana Villas, Lagoon Nirwana Residences di Balikpapan dan Krakatoa Nirwana Resort di Lampung.

Gajah Tunggal (GJTL.IJ, Not Rated) - Grappling with rubber price woes - Kim Eng

Tyre manufacturer Gajah Tunggal is facing a margin squeeze as it is caught between rising rubber prices and an inability to raise ASP fast enough as sales are typically locked for three months. Management expects sales to grow by 20-25% to Rp11.8-12.3t this year and EBITDA to reach US$180m, close to last year’s US$181m. The company, set up in 1951, is currently the largest integrated tyre manufacturer in Southeast Asia . It produces and distributes high quality tyres for various types of vehicles including passenger car, SUV's, commercial, off-the-road, industrial and motorcycles. It also manufactures and distributes rubber-related products like synthetic rubber, tire cords, inner tube, and flap.

GLOBAL EQUITY STRATEGY Report: “Greece: what if?” – Prefer Indonesia! - Credit Suisse

The perception from Europe, it is probably cheaper to bail-out Greece, rather than let it defaulting that could trigger a domino effect to Portugal, then Ireland, then Spanish, referring to Lehman Brothers domino effect in US in 2008. Figure 56 page 35 “Country risk table” shows Indonesia private sector credit is much better at 29% Private Debt to GDP, compared to 116% Greece, 228% Portugal, 311% Ireland and 223% Spain, In addition to Government Debt to GDP for Indonesia 31%, compared to 157% Greece, 111% Portugal, 120% Ireland and 74% Spain (Figure 10 page 7). BRIC markets Private + Government Debt are also higher than Indonesia (29%+31%), with Brazil (59%+59%),India (65%+70%) and China (131%+18%), with exception Russia (42%+8%).

Indonesia Economics growth, fiscal and Debt-to-GDP remains among the best in the world! Robert Prior-Wandesforde is currently forecasting Indonesia Economics 2011F-12F Real GDP 6.0-5.5%, GDP per capita US$3,630-4,150, year-end CPI 6.0-6.0%, average CPI 5.8%-6.0%, year-end IDR8,250-8,100/US$, average IDR8,485-8,175/US$, and year-end Overnight BI rate 7.50-7.50% respectively. Teddy Oetomo is forecasting 9% upside to end-2011F JCI index target 4,150pts (16x 2011F PER) with Top-picks remain BMRI, BBRI, INDF & TLKM. As Upside Case, anticipating Land-reform bill to be passed late 2011 or 1H12 (Teddy believes 60% probability) to increase Investment-to-GDP for 2011F-2015F from currently circa 25%, Teddy is recommending ASII, GGRM & INDF in scenario of moderate-to-soft investment growth, and is recommending BMRI, BBNI, UNTR & SMGR in scenario of rapid investment growth.

- Andrew Garthwaite (Report attached): There are three inter-connected problems in peripheral Europe: a) most serious, a loss of competitiveness (ex Ireland) that we think requires more wage deflation than the economic consensus forecasts; b) excessive private sector debt (at c230% of GDP in Portugal and Spain, cf to 160% of GDP in US); and c) high public debt, where a haircut of 36%, 25% and 32% is probably needed in Greece, Portugal and Ireland (but CDS are now more than pricing this in).

- Our base-case scenario is that this is not a systemic risk (as the cost to core Europe of not bailing out peripheral Europe is at least 2x the cost of bailing it out), Spain (which is 12% of European GDP) does not require a haircut and the ECB will end up repo-ing more and more peripheral European debt to offset deposit flight (the recap of the ECB has to be done by core Europe; this makes it a core European problem). We believe there is a 75% probability of a delayed and ‘agreed’ default in Greece: a roll-over of government bonds will be implemented, allowing GGBs to be used as collateral with the ECB, with restructuring being postponed until Greece runs a primary surplus, banks are better capitalised (each year PPP are 3% of loans) and the ESM is set up.

- What if? We believe there is a 15% probability of a unilateral default within six months, but this would be met by a quick European policy response. In this scenario, European markets are likely to fall 10% but offer an attractive buying opportunity (as the ECB will likely have to do QE). Lastly, we see a 5% probability of a unilateral default with a poor European response, a break-up of the Euro, a 5% fall in European GDP and a c20% decline in markets (and a 5% probability of Germany withdrawing from the Euro). We agree with our European credit strategist, William Porter, that leaving the Euro-area would just be an expensive way to default: if any peripheral European country left the Euro, we estimate GDP would fall by 20% or more (owing to the reliance on ECB funding and the need to tighten fiscal policy, as all these countries are running primary budget deficits).

- Investment conclusions: buy domestic Germany; stay short of domestic plays in peripheral Europe; buy Italy: it looks abnormally cheap and should not be considered part of the periphery, in our view; the euro could easily weaken to €/$1.35; banks do not offer sufficient appeal until they trade 10% lower; and we stay underweight Continental Europe.

Citigroup Pan-Asia 2H11 Outlook - Buy the Summer Weakness for a Fall Rally (+20-25%) "INDONESIA" - Citigroup

From Inflation to Infrastructure
 Upside of 17% with stable EPS growth forecast — We remain positive on the Indonesian market, with an average expected total return of 17% for the stocks under our coverage (total market cap of US$192bn). In the past two years, the forward PER has remained relatively stable at around at 13.5x (currently +0.33 std). Future returns will be driven by EPS growth (consensus 2011E of 19-20%), with expectations of higher direct investments including infrastructure spending. Upward earnings revisions for 2011E have been led by Autos and Banks, with Telcos and Utility leading the downward revisions.
 Key triggers — With inflation fears receding, the focus is now on earnings growth. Consumption momentum remains strong, supported by bank loan growth of 23%. The other drivers of earnings are commodity prices (coal and CPO) and infrastructure spending. The approval of Land Acquisition Bill by the Parliament (scheduled for July but with increasing probability of being delayed) would be a positive signal, even if the actual results may not materialize before 2H 2012.
 GDP growth (2011E 6.5%) and falling inflation have driven post-Feb rally — Strong IDR has yielded the desired result, with CPI down to 5.98% (May) and the 10-yr bond yield falling to below 7.5%. Citi expects only one more policy rate hike of 25bps in 2H CY11 (to 7%).
 Commodity/Infrastructure plays are top picks, with selective Banks — Higher coal and CPO prices, due to structural supply/demand imbalance, will support earnings growth (prefer Adaro and LSIP). Infrastructure picks are cement producer Indocement and toll-road operator Jasa Marga (JSMR.JK; Rp3,450; 1L). Our top Buy in Banks is BMRI, due to its diversified exposure.
 Inflation is the key risk — Decision to absorb fuel subsidy in the budget has eased immediate pressures. Medium-term risk is delays in capacity additions to match rapid demand growth. Political risk remains low, for the time being at least, but we do expect changing alliances as the 2014 election approaches.

Regional coal - Feedback - Looking forward to 2012 - MACQUARIE

§ We visited over 35 clients in Asia (Kuala Lumpur, Singapore and Hong Kong) over the past week. Similar to the feedback that we received from our UK marketing ( See this link ), investors are positive on the thermal coal outlook, especially going into 2012, supported by the potential recovery in Japanese demand (post disaster in March) as well as increasing domestic demand in Indonesia and India. Further, there is not much pushback on the preference towards Asean names in the medium-term. Our key picks, Harum and SAR received the most interest from investors.

§ Range bound trade in the short-term. There was a lot of discussion around our range-bound view in the short-term, especially given the incremental positive news for the sector (including a strong MoM pick up in Chinese import demand in April and May with the re-emergence of import arbitrage). We highlight that our range-bound view is mainly driven by the increasing Chinese import appetite being offset by a seasonally weaker pricing period (especially as Indonesian coal production started picking up in May-June due to better weather). Also some Japanese cargo is being sold to the spot market at a US$3-5/t discount to the global spot price. However, we highlight that investors are less concerned on short-term volatility given the strong 2012 outlook.
§ Positive 2012 outlook seems to be a general view. Most investors agreed with our positive outlook on thermal coal going into 2012, which is also in line with the positive feedback that we received from the Coaltrans Conference (with the majority of participants highlighting that JFY12 settlement is likely to rise moderately to US$130-140/t, ahead of our US$120/t forecast). Our positive view is mainly driven by increasing demand from India and Indonesia (as they increase their electrification ratios) and the Japanese reconstruction story (with roughly +/-3GW out of 8GW of the damaged thermal power plant already back on-line and with more power plants to return to operation in 2012/13).
§ Prefer Asean coal...but no longer trade at a discount vs. Chinese names. Investors generally agreed on our preference towards the Asean names as they seek companies with production growth (from existing reserve bases), pricing leverage, and attractive valuation (currently the Asean coal sector trades on 10x PER vs. historical sector average of 12-13x). However, whilst some investors argued that on a relative basis, the Asean coal sector now trades at par with the Chinese (vs. +/-10% discount historically), others argued that the recent de-rating of the Chinese names is justified given the policy risks.

§ In line with our marketing feedback from the UK in early May as well as Coaltrans, investors appear to be relatively positive towards the 2012 coal story as well as longer-term. This is consistent with our medium-term view and supportive of our preference towards the Asean coal sector. Most of our discussions centred on our top 2 picks, SAR and Harum.

Kawasan Jababeka: KIJA’s land expansion (KIJA, Rp124, Buy, TP: Rp150) - Mandiri

􀂄 Indonesia’s major industrial estate developer, PT Jababeka Tbk, which operated the Jababeka industrial estate in Cikarang West Java, will acquire more land to further expand in order to meet the surging demand for industrial estates. The company has allocated US$34.68m for land acquisitions
􀂄 Given the surging demand of industrial land in Indonesia, securing further portion of land is crucial for industrial estate developer's operation, especially in Cikarang.
􀂄 Kija currently has the largest available land bank, compared to its peers, with 503ha. Knowing last year land bank sold was up to 100ha, this would translate to only 5 years revenue generating period.
􀂄 We like KIJA as it is a proxy to an integrated industrial estate developer, aside of robust growth due to additional contribution from power plant and dry port operation starting in 2012.
􀂄 KIJA currently trades at 64% discount RNAV11 and PER11F 14.6x.

Indosat: To sell towers and use major parts to repay debt; will pay dividend of Rp59.55/share (ISAT, Rp5,150, Neutral, TP: Rp5,400) - Mandiri

􀂄 Indosat (ISAT) admitted that it plans to divest some of its towers in order to repay its debt amounting to around 4,000 towers or equivalent to US$500mn. It is estimated that debt and interest expense may reduced by 18% and 16% respectively.
􀂄 Noted that we have expected such plan in our last report on ISAT, where we estimated ISAT would sell about US$453mn based on market value of independent listed tower companies. Should this plan is finally realized, it is estimated that debt and interest expense may lower by 18% and 16% respectively, which may result in potential upside in FY11F bottom line of 14.8%
􀂄 In addition to that, during latest AGM, shareholders approved 50% dividend payout with payment of Rp59.55/share or equivalent to 1.15% dividend yield. The cum date will be on 22 July 2011, while payment date is on 5 August 2011
􀂄 We still maintain Neutral on ISAT (TP: Rp5,400) however we view that the plan is positive for ISAT’s performance as lower debt burden may give breathing space to face tough competition in telecom industry. ISAT is traded at PER11F 21.0x and PBV 1.5x

Jasa Marga (JSMR IJ, Rp3,525 BUY) On the right road - Danareksa

Solid traffic
Jasa Marga changed its toll road traffic accounting system in March 2011 because of adjustments related to relocation of new toll gates. Under the new system, traffic will be double counted on some sections. This means that a y-o-y comparison can no longer be made. In total, traffic reached 90.2mn vehicles in May 2011, or translating into 2.9mn vehicles per day (+12.3% yoy, +0.5% mom). On a monthly comparison, traffic on the Semarang toll road grew a very healthy 23.2% mom to 3.1mn vehicles thanks to additional lanes (from 2x1 previously to 2x2) which increased capacity and improved traffic flow.

Truck restrictions on the inner city toll road made permanent
The regional government of Jakarta has introduced restrictions on trucks using the inner city toll road from 5.00am-22.00pm. These restrictions were first introduced whilst the ASEAN Conference was being held in early May but proved so effective that the restrictions were then extended until June and finally made permanent in an effort to help reduce Jakarta’s chronic traffic congestion. In May 2011, traffic on the inner city toll road was unchanged at around 522,000 vehicles per day. This suggests the truck restrictions are not affecting traffic. Although trucks are not allowed to enter the Cawang Tomang Pluit stretch – which cuts through the heart of the city – they can effectively re-route through the alternative Cawang – Tj Priok-Pluit stretch which is located in the east of the city. The benefits of the restrictions are clear: much better traffic flow during daytime hours and greater usage of the toll road late at night by the trucks. Nonetheless, some bottlenecks have occurred at the port and there has been congestion on alternative roads. As such, it is vital that Jasa Marga finishes the JORR W2 North section to link up with JORR in a completed circle around Jakarta. Besides this, the government will also need to speed up development of the harbor link at the northern tip of the JORR toll road to provide better access to the harbor.

Jasa Marga signs new toll road agreements
The government has undertaken reviews on 24 undeveloped toll roads. In this regard, Jasa Marga has signed amendments on six toll road agreements with the government, namely: 1) Surabaya-Mojokerto 2) Cengkareng-Kunciran 3) Kunciran-Serpong, 4) JORR W2 North, 5) Gempol-Pandaan and 6) Gempol-Pasuruan. The amendments cover project rescheduling, the size of the investment, and recalculation of the IRR and concessionary period. Jasa Marga is among the first to agree to the amendments.

Maintain BUY
Jasa Marga is the only toll road operator to consistently deliver new toll roads. Moreover, it may also be possible for Jasa Marga to acquire other toll roads that are being reevaluated by the government. Its strong track record in toll road development has helped the company to become recognized as the so-called preferred bidder. BUY maintained with a Target Price of Rp4,000 that translates into PER FY11-12 of 19.7 -15.6x and EV/EBITDA FY11-12 of 12.7-10.3x.

Overnight economic data 27 June 2011 (Monday)

US Treasury prices rise on Friday as market sentiment remains fragile
Durable goods orders in the US rise more than expected in May
US economy expands by 1.9% in Q1, according to the third and final GDP report
Too-big-to-fail banks need to add extra capital under new Basel terms
We recommend risk-averse investors take profits on Eurobonds issued by Bank of Moscow

US Treasury prices, except 30Y bonds, rose on Friday, despite economic data being broadly positive as concerns over the Greek debt situation persisted and Moody’s statement that it might downgrade the ratings of 16 Italian banks (Moody’s is concerned about the Italian banks’ profitability prospects, funding costs, money-losing operations in the domestic market and the deterioration in Italy’s sovereign credit profile). It is worth noting that Italian banks have little exposure to Greece and other peripheral Eurozone debts, and have successfully raised more than EUR 10.5 bn in fresh equity capital in a series of capital increases so far this year, according to the Wall Street Journal. On economic data, US durables good orders rose more than expected in May, while the third and final Q1 GDP report turned out as expected. This week, market participants will closely watch whether parliamentarians in Greece pass the austerity measures required to access additional funding from the European Union and the International Monetary Fund. US President Barack Obama will also meet with Senate leaders from both the Republican and the Democratic parties to revive talks on the US budget and deficit. The US political parties are at an impasse on the issue of raising the nation’s USD 14.3 trn debt ceiling and if they fail to do so in July, it could cost the USA its triple-A credit rating.

US Treasury 2Y notes rose 0.75/32 to yield 0.331% (versus 0.344% on Thursday), while 5Y notes were up 12.75/32 to yield 1.374% (1.458%). 10Y notes rose 13.25/32 to yield 2.864% (2.913%). 30Y bonds were down 8.5/32, yielding 4.184’% (4.169%). For the week, 2Y, 5Y, 10Y and 30Y yields declined by about 5 basis points (bp), 16 bp, 9 bp and 3 bp respectively. The 2–10 yield curve flattened by about 5 bp to 253 bp. The VIX volatility index closed at 21.10 compared to 19.29 on Thursday. August crude oil futures rose USD 0.14 to USD 91.16. Spot gold fell USD 18.75 to USD 1,502.65 a troy ounce, while COMEX gold for August delivery was down USD 19.60 to USD 1,500.90 a troy ounce.

The US Commerce Department reported that orders for durable goods had risen 1.9% month-on-month (MoM) in May, higher than the 1.5% increase expected by the market. April’s numbers were revised to show a 2.7% decrease versus a 3.6% decline reported earlier. Excluding the volatile transportation segment (which grew 5.8% MoM), orders rose 0.6% MoM in May (0.9% expected) following a 0.4% decrease in April (revised from –1.5% reported previously). Non-defense capital goods excluding aircraft rose by 1.4% MoM in May. The increase in May’s durable goods orders was fairly broad-based, with orders for machinery, computers, electrical equipment and communications equipment rising.

The US Commerce Department reported that the US economy grew at a rate of 1.9% quarter-on-quarter (annualized), matching the market’s expectation and marginally higher than the 1.8% previously forecast in last month’s report. The revision mainly reflects a smaller trade deficit and a bigger increase in inventories than previously reported. The personal consumption core price index, the Fed’s preferred price gauge, rose in Q1 at an annual pace of 1.6% compared to the 1.4% increase estimated earlier. Personal consumption rose 2.2%, matching market expectations and was same as the previous estimate. Friday’s report was the third and final report for Q1 GDP.

The Basel Committee on Banking Supervision stated that large international banks would need to have additional capital of between 1% and 2.5% of risk-weighted assets, as regulators attempt to reduce the impact of another financial crisis. The extra capital is in addition to the minimum 7% Tier 1 capital that banks must have, and it must be met by building up their core reserves and not by issuing contingent capital instruments. The new requirements will be introduced with other measures from January 2016 through January 2019.

The JP Morgan EMBI Global Diversified Index closed at 567.08 compared to 566.87 on Thursday. The JP Morgan EMBIGD sovereign spread widened by about 6 bp to 311 bp.

We changed our recommendation on Eurobonds issued by Bank of Moscow to HOLD on Friday and recommend that risk-averse investors take profits/sell and exit their positions. We erred on the conservative side and view this as a precautionary call as Bank of Moscow was reported to have incurred significant bad debt due to related-party lending to its previous management. The unconfirmed RUB 150 bn potential bad debt is so large that, if true, it could wipe out 100% Bank of Moscow shareholders’ equity of RUB 117 bn reported as at 30 September 2010.

Today, the US Commerce Department will announce May personal income and personal spending data (+0.4%MoM and +0.1% MoM expected).

SMRA Decent Value for Sound Fundamental - Indopremier

The company is fundamentally solid and set for new round of major investment. It is expected to assume higher leverage for the investment but balance sheet shall remain strong at 0.96 D/E ratio bands. RNAV valuation guides for BUY with decent 14.41% upside potential and TP of Rp 1,350.

Competently Planned Development
SMRA organizes the development four townships to go into different phases with Kelapa Gading focus on vertical construction, Serpong goes for landed residential, Bekasi with new mall and finally Bandung Gedebage doing land bank acquisition. This endeavor is a positive effort to balance marketing sales, recurring income and capital expenditure.

Gearing Up for Land Acquisition and Capital Expenditure
The company shall need approximately IDR 3 trillion for land acquisition in Bandung Gedebage and capital expenditure for office and apartment in Kelapa Gading, Mall in Bekasi and Serpong as well as residential in Serpong. With only IDR ~1 trillion cash on balance sheet, we anticipate an increase in leverage over the next two years to fund the development, yet it still within acceptable debt to equity ratio of 0.96.

Strong Marketing Sales Amid Cyclical Industry
Since 2006 to 2010, marketing sales has experienced solid growth by 38.89% CAGR. Going forward we forecast steady growth in marketing sales despite at lower 15-20% rate. Anchoring on Q1-2011 reported sales is IDR 660, we anticipate year-end figure to reach IDR 2.27 trillion.

BUY with 14.41% upside potential and TP of Rp 1,350
We initiate coverage with TP of Rp 1,350 derived by sum-of-the-part RNAV valuation. On relative basis, we prefer to use EV/EBITDA to lessen depreciation effect on competing real estate developers, the ratio indeed support our target price for decent price appreciation.

HRUM Ready, Go - Indopremier

HRUM is well positioned for future growth over the next years particularly supported by robust production expansion of 46.8% CAGR in 2010-2013 and stronger ASP on the coal price rising episodes. 1Q11 average ASP was US$ 88.4/t, increase 35.7% YoY from 1Q10, leading HRUM ASP to US$ 89.3/t in 2011F, and US$ 101.1/t in 2012F. BUY Recommendation for HRUM with TP Rp 10,400 per share, 11% potential price increase.

Top Six Bituminous Coal Producers in Indonesia
With 2010 coal production of 7.4 mn tons, HRUM took a position of top six largest bituminous coal producers in Indonesia. HRUM coal mine are located in East Kalimantan and produces bituminous coal with high calorific value by 5,400-6,400 kcal/kg ADB. HRUM coal type is similar with coal produced by BUMI, BYAN, PTBA, ITMG and Straits, with export target market.

Robust production Growth, In-place infrastructure and Limited Capex
HRUM has delivered 37.6% CAGR production growth during 2007-2010, and expect to production 10.5, 14.5, and 17.5 mn tons of coal in the next three years. Currently HRUM is supported by 15 mn tons p.a. processing capacity and in progress to install the fourth crusher to meet 20 mn tons p.a. processing capacity to cover four years production expansion. Given in-place infrastructure, HRUM only allocate US$ 30 mn capex for 2011, and no major capex for next two years.

Beneficiary of Coal Price Rising
We anticipate Newcastle coal price (benchmark price) will tend to increase in years to come. Newcastle price contract for July shipment has set at US$ 126.5 per ton and expected to remain at US$ 124 per ton in 2011F, and US$ 135 in 2012F. 2Q11 HRUM expected production has been sold and priced at prevailing market price in 1Q11. HRUM also set a benefit from index-linked contract as most coal indices tend to increase, leading to superior sales growth in the coming years. We expect HRUM to deliver 71.3% YoY sales increases to Rp 7.7 tn and 111.2% net profit increase to Rp 1.7 tn in 2011.

BUY Recommendation
We set our TP at Rp 10,400 per share based on 16x PE11F and 9x EV/EBITDA11F multiple methodology. Currently HRUM is traded at 14.6x PER 11F 8x and EV/EBITDA 11F

Stocks don't need (or want) more stimulus - CNNMoney

NEW YORK (CNNMoney) -- The Federal Reserve is winding down its $600 billion bond buying stimulus that helped fuel an eight-month stock rally and experts say stocks are ready to take back the reins.

They don't need or want any more stimulus, say strategists surveyed by CNNMoney.

Even though stocks have retreated about 7% since the start of May, most market strategists say the pullback is temporary, and are calling for the S&P 500 to rise more than 7% during the second half.

That means the S&P 500 would end 2011 with double-digit gains ... at a fresh 3-year high. All of that without any additional stimulus.

"The Fed should stop. They've done more than enough already," said Matt King, chief investment officer at Bell Investment Advisors. "Any further stimulus only increases the long-term risk of inflation, which we already view as high."
A stormy year for stocks

What's more, some went so far to say that the Fed's stimulus program, known as quantitative easing or QE2, was "a failure."

"It weakened the dollar and stuck the economy with higher food and energy prices," said Donald Selkin, chief market strategist at National Securities, adding that those factors are to blame for the recent pullback in consumer spending and slowdown in economic growth.
CNNMoney survey: Where the markets are headed

Rather than another round of monetary stimulus, experts say policymakers need to focus their goals on righting the nation's fiscal ship to keep the market and economy on track.

"The Fed should move to the sidelines until Congress acts to extend the debt ceiling and addresses a budget deficit package," said Marc Pado, chief investment strategist at Cantor Fitzgerald.

Without Fed intervention, Congress may also be more inclined to address tax policies that are keeping record amounts of corporate cash abroad, experts said.

If Congress were to enact some sort of repatriation tax holiday, it could bring some of that money back to the United States, which would spur business spending and lead to more job creation.

"The Fed needs to pass the baton to the next runner in this relay race and that is business spending," said Burt White, chief investment officer at LPL Financial. "It is time for businesses to spend and hire, which will move the baton later to the anchor runner, the consumer."

Saham BUMI Berpotensi ke Rp2.800 (Irwan Ariston Napitupulu) -

Laju saham BUMI Senin (27/6) diprediksi melemah seiring peluang koreksi saham-saham di sektor batu bara secara bersamaan. Selain dipengaruhi sentimen market yang bearish juga harga minyak.

Pengamat pasar modal Irwan Ariston Napitupulu mengatakan, potensi pelemahan saham PT Bumi Resources (BUMI) awal pekan ini karena saham-saham batu bara sedang bermasalah karena koreksi harga minyak yang mendekati US$90-an per barel. Pergerakan harga batu bara sangat terkait erat dengan harga minyak. Akibatnya, jika harga minyak turun, saham-saham batu bara pun cenderung turun termasuk saham sejuta umat ini.

Koreksi harga minyak, menurutnya, dipicu oleh kebijakan International Energy Agency (IEA) yang melepaskan 60 juta barel cadangan minyaknya ke pasar. Saham BUMI berpeluang melemah ke bawah level Rp3.000 dengan tutup di kisaran level gap-nya Rp2.800. Level tersebut bisa dicapai dalam satu atau dua pekan. “Untuk pekan ini, saya menyarankan lebih baik menghindari saham-saham batu bara termasuk BUMI,” katanya kepada INILAH.COM.

Pada perdagangan Jumat (24/6) saham BUMI ditutup melemah Rp75 (2,34%) ke level Rp3.125 dari posisi sebelumnya Rp3.200. Harga intraday tertingginya mencapi Rp3.175 dan terendah Rp3.100. Volume transaksi mencapai 67,3 juta unit saham senilai Rp210,7 miliar dan frekuensi 2.649 kali. Berikut ini wawancara lengkapnya:

Setelah melemah Rp75, bagaimana Anda memperkirakan laju saham BUMI awal pekan ini?

Berpotensi melemah. Sebab, saham-saham batu bara secara umum sedang bermasalah karena koreksi harga minyak yang mendekati US$90-an per barel. Pergerakan harga batu bara sangat terkait erat dengan harga minyak. Akibatnya, jika harga minyak turun, saham-saham batu bara pun cenderung turun termasuk saham BUMI.

Koreksi harga minyak dipicu oleh keputusan International Energy Agency (IEA) yang melepaskan 60 juta barel cadangan minyaknya ke pasar. Akibatnya, harga minyak turun drastis dari level US$95-an per barel ke level US$90 per barel. Harga minyak pekan ini, berpeluang turun ke bawah US$90 per barel.

Hingga level berapa potensi koreksi harga minyak?

Secara teknikal terlihat gap di level US$86-88 per barel. Karena itu, pekan ini, harga minyak berpeluang melemah ke level-level tersebut.

Akibatnya, semua saham batu bara bakal mengalami tekanan jual?

Ya. Semua saham batu bara pun bakal mengalami tekanan jual. Saham-saham batu bara pekan ini, cenderung melemah tajam bersamaan, PT Bumi Resources (BUMI), PT Adaro Energy (ADRO), PT Indika Energy (INDY), PT Indo Tambang Raya (ITMG), PT Harum Energy Indonesia (HRUM), PT United Tractors (UNTR) dan PT Tambang Bukit Asam (PTBA).

Saham mana yang paling besar potensi koreksinya sangat tergantung pada mana yang paling kuat demand-nya. Hal ini bisa dilihat pada saat market dibuka.

Kalau begitu, saham BUMI sendiri akan bergerak dalam kisaran berapa?

Saham BUMI berpeluang melemah ke bawah level Rp3.000 dengan tutup di kisaran level gap-nya Rp2.800. Level tersebut bisa dicapai dalam satu atau dua pekan. Cepat atau lambat saham BUMI akan melemah ke level tersebut. Tapi, untuk pekan ini, peluang koreksi saham sejuta umat ini masih terbatas di level Rp3.000.

Sementara itu, untuk resistance berada di level Rp3.500. Tapi, tetap saja tekanan jual jauh lebih besar daripada tekanan beli. Apalagi, kondisi market secara umum sedang bearish, karena investor fokus kepada harga minyak setelah IEA melepaskan 60 juta barel cadangan minyaknya itu.

Di sisi lain, Gubernur Bank Sentral AS The Fed Ben Bernanke merevisi turun prediksi Produk Domestik Bruto (PDB) AS dari level 3,1%-3,3% ke level 2,7%-2,9% untuk 2011.

Lantas, apa rekomendasi Anda?

Untuk pekan ini, saya menyarankan lebih baik menghindari saham-saham batu bara termasuk BUMI. Saya tidak merekomendasikan saham batu bara. Saham-saham batu bara sangat berkorelasi positif dengan harga minyak. Untuk trading, semua saham batu bara lebih baik dihindari. Untuk jangka pendek, potensi turunnya lebih besar daripada potensi penguatannya.

Tapi, bagi investor jangka panjang sudah lain cerita. Dalam situasi ini, bahkan lebih baik jangan memegang saham karena market dalam situasi bearish. Jangan melawan market kecuali, saham-saham berfundamental positif dan secara valuasi masih murah, boleh dipegang dan hold.

Madoff trustee wants billions more from JPMorgan - CNNMoney

NEW YORK (CNNMoney) -- The trustee in the Bernie Madoff case filed an amended complaint against JPMorgan Chase on Friday, upping the damages sought from $5.4 billion to $19 billion for the bank's alleged role in the Ponzi scheme.

Irving Picard, the trustee, had previously filed a complaint that sought to recover nearly $1 billion in fees and profits and an additional $5.4 billion in damages stemming from the bank's long stint as Madoff's banker.

But now Picard is alleging that JPMorgan Chase (JPM, Fortune 500) bankers played a larger role, and knowingly watched the fraud unfold without taking action.

"As alleged in the amended complaint, [JPMorgan Chase] not only should have known that a fraud was being perpetrated, they did know," David Sheehan, Picard's lawyer and a partner at Baker & Hostetler, said in a statement.

The trustee has sued hundreds of Madoff investors, including firms, individuals and the owners of the New York Mets baseball team, for profiting from their investments in his firm.

In February, JPMorgan responded to Picard's initial complaint, accusing the trustee of overstepping his bounds.
0:00 / 3:29 Unraveling Madoff's web of lies

"JPMorgan believes that the Trustee is entirely wrong in asserting that JPMorgan violated any federal statutes or regulations," the bank's lawyer John Savarese said in a court filing.

In a statement to CNNMoney, a JPMorgan spokesperson said, "The complaint publicly released by the trustee for the Madoff estate is meritless and is based on distortions of both the relevant facts and the governing law. Contrary to the trustee's allegations, JPMorgan did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff. "

Picard's team now says the bank's wrongdoing goes beyond what they alleged in the initial complaint. Bankers could see that Madoff was not using his fund to sell or buy securities, or transfer money to other accounts for legitimate purposes, they say.

"Ponzi schemes can't survive without cash, and JPMC's banking activities on behalf of Madoff included the provision of loans which proved essential to Madoff and directly contributed to the ongoing success of his fraud," said Keith Murphy, a partner at Baker & Hostetler. To top of page
First Published: June 24, 2011: 6:42 PM ET

Telkom Indonesia (TLKM IJ) urged to submit a new interconnection tariff by Dee Senaratne - CLSA

As the biggest telecom operator in the country, TLKM is urged by the remaining operators to submit the new interconnection fee. Other operators need to pay a certain interconnection fee to TLKM when TLKM subscribers receive a call from another operator's subscribers. On a separate note, TLKM has spent Rp5.49tn capex as of June 2011. Total capex budgeted for the entire year is Rp13.7tn. The capex is spent on building few base transceiver stations (BTS).

Comment: Interconnection revenues account for around about 4% of total revenues for TLKM. A cut in the interconnection rate would have a negative impact on TLKM however its not that material. On capex we are forecasting 17.5tr for the full year which is above the company's guidance. Capex can be lumpy and back-end loaded so I wouldn't read to much into a half yearly figure. However generally the Indonesian telcos are very capex intensive given the challenging geography in which to roll out networks.

Indofood CBP (ICBP IJ) upgrade by Merlissa Trisno - CLSA

ICBP is arguably this is the most pure domestic consumption play for the group. Stock has not done well since its listing last Oct at times when their key raw material input were spiking. However our newly on board consumer analyst Merlissa thinks the worst is behind us. Softening commodity prices, coupled with strengthening of currency should bode well for its strong margin. WE expect 1) ICBP’s near term potential price increase, 2) better-than-expected noodle margin and 3) potential margin expansion on its dairy products. At 14x 12CL and Rp3.4trn of net cash, risk reward its looking good.

Few key points:

· Potential noodle price increase in 3Q by around 3-4%. This should bode well for noodle’s operating margin which we foresee about 15.6% this year (from 1Q11’s of 14.5%). They will likely taking the momentum of Lebaran to raise noodle selling price, aside from the fact that volume remains resilient despite a strong 7-9% increase in ASP in 1Q11.

· Margin expansion on dairy business, helped by greater economies of scale post 40-50% capacity expansion in 2012 and better pricing scheme from SIMP’s sugar business.

· Acquisition to drive growth. Its net cash position of Rp3.4tn in 1Q11, coupled with its slow capex realization and stable payout ratio suggested that potential acquisition is likely. Any acquisition will complement its existing consumer products, whose raw materials could be secured from its parent company

· We upgrade our recommendation to a O-PF. TP6,000

Indosat initial tower sale looks weak on pricing, good for either TBIG or TOWR (James Sullivan, Vishesh Gupta)

Thomson Reuters reported yesterday that ISAT is considering sale of 4000 towers out of its total portfolio of ~12000 towers. The news story said that ISAT aims to raise ~US$500 mn from the first tranche of tower sale. The company has not commented on the report.

A few key takeaways on the indicated tower sale from our analysis of independent tower portfolio valuations in Indonesia:

Pricing looks weak: ISAT's 4000 tower sale at US$500 mn amounts to an EV/Tower of US$125k which is much less than existing tower portfolio valuations of TOWR and TBIG at US$350-430k EV/Tower. The indicated pricing also seems weak as compared to earlier indications from ISAT management that they expected to get valuations of ~US$200k for their towers.

The offer looks attractive for TBIG/TOWR (the two biggest independent tower operators in Indonesia): The indicated offer price in Thomson Reuters news article is at around a 65-70% discount to their existing tower valuations and thus could be an attracitve proposition. Based on 1Q11A financials; our calcualtions indicate that TBIG's net debt/Equity would increase to 233% from 60% currently if it were to acquire ISAT's 4k towers at US$500 mn while TOWR's net debt/Equity would rise to 627% from 316% currently. JPMorgan does not maintain coverage of TBIG or TOWR.

Attaching the article from Reuters

Janeman Latul
Equities Correspondent
ThomsonReuters Indonesia

18:38 23Jun11 RTRS-Indonesia's Indosat launches sale of 4,000 telecom towers-sources
JAKARTA/HONG KONG, June 23 (Reuters) - Indosat , Indonesia's No.2 mobile phone provider, has launched an initial sale of 4,000 telecom towers aiming to raise more than $500 million, said three sources with direct knowledge of the plan on Thursday.
The company has invited several potential bidders, including Profesional Telekomunikasi Indonesia, a unit of Sarana Menara Nusantara , Tower Bersama Infrastructure and Solusi Tunas Pratama to assess data on the towers.
Indosat will not offer the towers to its main rivals Telekomunikasi Indonesia and XL Axiata , said the sources, who declined to be identified because the sale was not public yet.
The potential bidders have been talking to banks over loans to fund the acquisition, sources said.
Bids are due by early next week.
The sale could be the first auction of around 10,000 towers that sources told Reuters last year it is considering selling.
Indosat, controlled by Qatar Telecom , declined to comment.
(Reporting by Janeman Latul and Fathiya Dahrul in JAKARTA and Maggie Chen from Basis Point in HONG KONG; Editing by Neil Chatterjee)