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Selasa, 04 Oktober 2011

U.S. Stocks Tumble to 2011 Low on Debt Concern - Bloomberg

Kim Eng - AKRA: Beneficiary of oil price hike Stronger FY11 result has been anticipated. AKR reported strong core net profit growth of 97% YoY to Rp611b, and revenue growth of 82% YoY to Rp18,806b. Both numbers were in line with our expectations. Higher revenue was supported by all division units, particularly petroleum distribution, which recorded 99.6% YoY revenue growth to Rp14.9t, and chemical distribution, where revenues were up 36.9% YoY to Rp2.65t. Sales volumes of both divisions grew by 50% YoY and 9% YoY to 2m KL and 1.24m MT respectively. Eyeing better petroleum distribution sales amid higher oil prices. We foresee that revenues at the petroleum distribution unit will be better this year amid higher oil prices. Up to end-March 2012, the average price of crude oil was US$103 per barrel or 10% above the average price in FY11 of US$95 per barrel. High crude oil prices (to the end of this year) would support AKR’s petroleum distribution sales. Based on our calculation, if crude oil prices (NYMEX) increase by 10%, sales and net profit will each increase by 7%. Revising ASP of petroleum distribution in anticipation of higher oil prices this year. We upgrade our revenue assumptions by 6% to Rp24.1t in FY12 and by 12% to Rp28.1t in FY13 as we raise the ASPs of the petroleum distribution to Rp7,500 per litre in FY12 and FY13 (from Rp7,000 per litre in FY12, and from Rp6,500 per litre in FY13), amid anticipated higher oil prices. Our assumptions for the petroleum distribution prices are based on a crude oil price of US$98 per barrel, below the 3M12 average of US$103 per barrel. Meanwhile, we maintain our sales volume growth assumptions of 26% for petroleum distribution to 2.5m KL this year, and 15% to 2.95m KL in FY13. Raising TP to Rp3,825, maintain HOLD. We raise our TP to Rp3,825 (from Rp3,600) in anticipation of higher oil prices. With the share price up 42% ytd, we believe the market has been too optimistic about AKR’s prospects. We are waiting for new catalysts to boost AKR’s earnings growth. Maintain HOLD. Kim Eng - WIKA: Applause for results breakthrough Robust showing. Wijaya Karya (WIKA) reported a 24% YoY increase in FY11 net profit to Rp354b on the back of a 29% YoY growth in revenue and robust 4Q11 results. While the top line was in line with our forecast, the bottom line beat our estimate by 7% and the consensus by 8%. Operating profit grew by 37% YoY to Rp654b, 15% above our estimate, due to higher-than-expected income from joint operation (JO). Bottom line surged 88%QoQ. On a quarterly basis, net profit jumped 88% QoQ to Rp139b from Rp74b in 3Q11. Margins were up by 3-4ppts QoQ, thanks to 8% growth in revenue and just a 1ppt increase in COGS. The recovery of other income, from negative Rp44b to almost positive value, also supported the bottom line. Higher contribution from ME projects. WIKA booked a new mechanical electrical (ME) project valued at Rp1.5t in FY11, surged by 381% YoY from previous year’s value of Rp312b. The distribution of ME projects to total order book also rose by 12ppts YoY in FY11. We expect a slower distribution growth of ME projects in the next two years, as the company turns its focus to vie for property projects that have seen a rise in number, thereby boosting its realty distribution to total order book. Margins maintained. WIKA successfully kept its FY11 operating and net margins at the same level as last year’s – 8% and 5%, respectively. Nevertheless, we expect net margin to slip by 1ppt to 4% this year on account of higher-than-expected costs. In the past decade or so, Indonesian construction companies have found it difficult to raise their margins, typically booking a single-digit figure. Limited upside, downgrade to HOLD. We adjust our assumptions and raise our FY12F-13F earnings by 5-9% to factor in the better-thanexpected FY11 results. Our TP thus goes up to Rp980 (from Rp820 previously), pegged at FY12F PER of 14.1x and EV/EBITDA of 5.6x. The new TP suggests an only 7.7% upside from the current level, thus we downgrade our call to HOLD on the counter.

Banks drag Wall Street to 13-month low on Europe fears - Reuters

(Reuters) - Stocks slumped in heavy volume to a 13-month low on Monday as investors dumped bank shares on fears that Greece's worsening financial crisis could cause a large European lender to fail.

Investors pegged losses to the sharp fall in Franco-Belgian financial group Dexia, which fell 10 percent after a Moody's warning about its liquidity due to concerns about exposure to Greece.

Markets have feared European officials will be unable to prevent Greece's fiscal crisis from turning into a global banking crisis. Greece said it will miss its deficit targets this year and next, which could limit the country's ability to receive more aid.

"Most investors fear that markets in Europe are going to run well ahead of politicians that are not going to be able to get any kind of reasonable solution," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

U.S. banks have become a target for speculators. Morgan Stanley closed at its lowest since December 2008 and its cost to insure its debt has jumped as other banks hedge counterparty exposures and traders bet on the situation worsening.

The recession that wiped 12 years of gains off the S&P 500 was caused in part by a credit crisis.

"We are going to have a disorderly default in Greece and there could be another banking crisis in Europe as they are undercapitalized and loaded with (sovereign) debt," De Gan said.

Morgan Stanley has been the most volatile bank in recent weeks, with the cost to insure its debt rising to November 2008 levels, according to Markit data.

Morgan Stanley shares fell 7.6 percent to $12.47 and the S&P financial sector was down 4.5 percent.

The market's focus on Morgan Stanley stems from a perception about their reliance on short-term funding, said Harbor Advisory's De Gan. "They rely on the credit markets and that was the downfall of Lehman and other institutions three years ago," he said.

The Dow Jones industrial average dropped 258.08 points, or 2.36 percent, to 10,655.30. The S&P 500 fell 32.19 points, or 2.85 percent, to 1,099.23. The Nasdaq Composite lost 79.57 points, or 3.29 percent, to 2,335.83.

The S&P 500 closed at its lowest level since September 8, 2010.

A stronger-than-expected reading in a gauge of U.S. manufacturing briefly lifted Wall Street stocks, but global manufacturing shrank for the first time in over two years in September, reinforcing fears of another recession.

The revelations that Athens would miss its deficit targets for both this year and next despite harsh new austerity measures will be the focus of talks as euro zone finance ministers meet to discuss the next steps toward resolving the currency area's sovereign debt crisis.

Dexia called an emergency board meeting after concerns about its exposure to Greece and a Moody's warning about its liquidity position raised pressure on Belgium and France to act.

Shares of AMR Corp , parent of American Airlines, lost a third of their market value as analysts debated the prospects for a bankruptcy filing for the U.S. airline, which lags its industry peers.

About 10.9 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, about 36 percent above the year's current daily average of 7.98 billion.

Declining stocks outnumbered advancing ones on both the NYSE and Nasdaq by a ratio of about 10 to 1.

(Reporting by Rodrigo Campos; Additional reporting by Karen Brettell; Editing by Kenneth Barry)