Detikfinance ENRG Kaji Right Issue

Jakarta - PT Energi Mega Persada Tbk (ENRG) akan mengkaji kemungkinan menerbitkan saham baru (rights issue) hingga US$ 150 juta sebagaimana diusulkan oleh Credit Suisse sebagai pemberi pinjaman sebesar US$ 450 juta pada September 2008.

GlobalCoal Newcastle Coal Index

NEWC Index
09-Jan-09 81.44
16-Jan-09 81.46
23-Jan-09 88.19
30-Jan-09 83.15
06-Feb-09 78.17

Des ARA Index
09-Jan-09 85.00
16-Jan-09 76.98
23-Jan-09 70.56
30-Jan-09 69.71
06-Feb-09 76.65
Spot prices (USD/tonne) for coal to be delivered in the 3 calendar months following publication date.

Bloomberg World Index

North/Latin America
INDEX VALUE CHANGE %CHANGE TIME
DOW JONES INDUS. AVG 8,280.59 217.52 2.70% 16:30
S&P 500 INDEX 868.60 22.75 2.69% 16:59
NASDAQ COMPOSITE INDEX 1,591.71 45.47 2.94% 17:15
S&P/TSX COMPOSITE INDEX 9,008.02 147.04 1.66% 17:05

Europe/Africa/Middle East
INDEX VALUE CHANGE %CHANGE TIME

FTSE 100 INDEX 4,291.87 62.94 1.49% 11:46
CAC 40 INDEX 3,122.79 56.50 1.84% 12:12
DAX INDEX 4,644.63 134.14 2.97% 14:30


Asia/Pacific
INDEX VALUE CHANGE %CHANGE TIME
NIKKEI 225 8,076.62 126.97 1.60% 02:00
HANG SENG INDEX 13,655.04 476.14 3.61% 03:10
ASX 200 INDEX 3,469.90 41.30 1.20% 00:47
JSX INDEX 1,350.64 22.57 1.70% 05:09
LQ-45 INDEX 265.76 4.56 1.74% 05:09

PalmoilHQ CPO Price Average Month on Month Start Climbing

CPO Average Month on Month Start Climbing

PalmoilHQ CPO Futures Bullish for 5 Consecutive Days

February 7, 2009 1:00 GMT+8
Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives ended higher yesterday for five consecutive days of a bullish trend, while tracking the steady crude oil and soybean prices, dealers said.

Concerns over a tight supply of palm oil had contributed to the firmer prices on the local CPO market yesterday, they added.

At close, the contract month for February 2009 rose RM5 to settle at RM1,925 per tonne and March 2009 added RM12 to RM1,899 per tonne.

The CPO futures for April 2009 increased RM1 to RM1,880 per tonne and May 2009 advanced RM9 to RM1,887 per tonne.

Yesterday’s volume went up to 16,985 lots compared with Thursday’s 11,952 lots while open interests fell to 84,043 contracts from 84,386 contracts previously.

On the physical market, the CPO price for February remained flat at RM1,900 per tonne.

Bloomberg U.S. Stocks Rally on Speculation Jobs Data to Spur Stimulus

Feb. 6 (Bloomberg) -- U.S. stocks gained, sending the Dow Jones Industrial Average to its best two-day rally in a month, on speculation the highest unemployment rate since 1992 will force Congress to pass an economic stimulus package.

Bank of America Corp. jumped 27 percent to lead gains in 29 of 30 Dow stocks after saying it doesn’t need more government aid. Citigroup Inc. and JPMorgan Chase & Co. added at least 10.7 percent on speculation a bank rescue to be detailed next week won’t wipe out shareholders. All 10 industry groups in the Standard & Poor’s 500

Index rose as Labor Department data showing the nation lost 598,000 jobs last month bolstered expectations lawmakers will agree on a plan to combat the recession.
The S&P 500 rose 2.7 percent to 868.6. The Dow added 217.52 points, or 2.7 percent, to 8,280.59, capping a 4.1 percent two- day gain. The Nasdaq Composite Index climbed 2.9 percent, erasing its 2009 loss.
Stimulus Vote

The Senate put off a vote on the stimulus package after lawmakers failed to agree on how to cut the more than $900 billion measure. The House has already passed an $819 billion version of the plan. Labor Department data released today showed the unemployment rate climbed to 7.6 percent from 7.2 percent in December as payrolls suffered the biggest monthly decline since December 1974.

‘Thinking Ahead’
“People are thinking ahead to what are these numbers going to look like in June,” Paulsen said. “Main Street is in free- fall, which is where Wall Street was in September and October. Wall Street since mid-October has been flat, and that’s what Main Street might look like by spring or early summer.”

The S&P 500 is likely to end the year at around 1,200, up about 42 percent from yesterday’s close, Paulsen said. Strategists at 11 Wall Street investment banks surveyed by Bloomberg have a median forecast of 1,050.

“The bad numbers are likely to continue for a while, but that doesn’t mean stocks won’t look through them as investors see light at the end of the tunnel,” said Jeffrey Coons, co-director of research at Manning & Napier Advisors Inc., which manages $16 billion in Fairport, New York. The unemployment rate is “a lagging variable,” tending to peak after stocks have begun to rally and trough after the start of bear markets.

The last peak in the unemployment rate, at 6.3 percent in June 2003, came three months after the S&P 500 began its climb to a record 1,565.15 in October 2007.

Financials Jump
Financial companies in the S&P 500 gained 8.1 percent collectively, the biggest advance among 10 industry groups. Investors are awaiting details of Obama’s strategy to aid the nation’s banks. Treasury Secretary Timothy Geithner on Feb. 9 is scheduled to announce a package that’s likely to emphasize guarantees for impaired assets, according to people familiar with the plan.
To contact the reporters on this story: Eric Martin in New York at emartin21@bloomberg.net; Elizabeth Stanton in New York at estanton@bloomberg.net.
Last Updated: February 6, 2009 16:38 EST

(edited by BRIGHT INFO)

PalmoilHQ CPO HAMBURG: Lowest Known Offers at 1315 Local Time in U.S. Dollars a Metric Ton Bulk

HAMBURG: Lowest known offers at 1315 local time in U.S. dollars a metric ton, bulk, with changes on the day unless otherwise stated as quoted by European traders:

Palm oil, Mal/Sumatran origin Palm oil, Mal/Sumatran origin
crude (max 5% FFA), refined, FOB Malaysia
CIF Rotterdam

Mar 09 565.00 unch Feb-Mar 09 570.00 - 2.50
Apr-Jun 09 572.50 unch Apr-Jun 09 565.00 - 2.50
Jul-Sep 09 580.00 unch Jul-Sep 09 560.00 - 2.50

Palm olein, Mal origin, RBD Stearin, (Poram), RBD
(max 0,1% FFA) FOB Malaysian FOB Malaysian

Feb-Mar 09 600.00 - 2.50 Feb 09 445.00 + 5.00
Apr-Jun 09 595.00 - 2.50
Jul-Sep 09 590.00 - 2.50 Palm Fatty Acid Distillate
FOB Malaysia

Feb-Mar 09 340.00 + 5.00

Palm kernel oil, Mal/Indo origin Coconut oil, Phil/Indo origin
max 5% FFA, CIF Rotterdam 3-4% FFA, CIF Rotterdam

Mar-Apr 09 570.00 unch Feb-Mar 09 655.00 + 5.00
Apr-May 09 570.00 unch Mar-Apr 09 670.00 + 5.00
May-Jun 09 585.00 + 5.00 Apr-May 09 675.00 unch
Jun-Jul 09 595.00 + 5.00 May-Jun 09 680.00 - 5.00

tr = traded level
unch = unchanged
unq = unquoted
RBD = refined, bleached and deodorized
Poram = contract specification of the Palm Oil
Refiners Association of Malaysia.

Detikfinance Mandiri-Tunas Financindo Teken Pembiayaan Rp 2 Triliun

Jakarta - PT Tunas Financindo Sarana menandatangani pengambilalihan 51% saham perseroan kepada PT Bank Mandiri Tbk. Akuisisi yang sudah dilakukan sejak September tahun lalu mencapai Rp 250 miliar.

Penandatanganan tersebut meliputi Akta Jual Beli Saham, Perjanjian Pemegang Saham, Perjanjian Fungsi Pendukung dan Perjanjian Kerjasama Pembiayaan sebesar Rp 2 triliun.

"Kerjasama ini akan meningkatkan kemampuan Tunas Finance untuk berkompetisi dan meningkatkan performa di masa yang akan datang," ujar Direktur Utama Tunas Finance Halim Gunadi dalam siaran pers, Jumat (6/2/2009).

Halim juga berharap Tunas Finance akan dapat mengoptimalkan kerjasama ini untuk memperluas jaringannya.

"Bergabungnya Bank Mandiri adalah strong partner bagi Tunas Finance untuk terus melakukan ekspansi dan mencapai target Tunas Finance untuk menjadi perusahaan pembiayaan nomor tiga terbesar di Indonesia," ujar Halim.

Sementara RUPSLB Tunas hari ini menyetujui perubahan susunan dewan komisaris dan anggota direksi perseroan. Dewan komisaris dan anggota direksi diangkat untuk masa jabatan tiga tahun ke depan dengan Halim Gunadi masih menjabat dirut.

Detikfinance PT Energi Mega Persada Tbk (ENRG

Jakarta - PT Energi Mega Persada Tbk (ENRG) optimistis dapat merealisasikan target produksi minyak dan gas sebesar 30 ribu mboepd (barel ekuivalen per hari) di tahun 2009 atau naik sekitar 20% dari produksi migas 2008 yang sebesar 25.100 mboepd.

Perseroan juga akan memangkas operational expenditure (opex) hingga 20% sebagai langkah antisipasi anjloknya harga minyak mentah dunia.

"Target kami tahun ini produksi harian 30 ribu mboepd atau naik sekitar 20% dari produksi harian di 2008," ujar Direktur Utama ENRG, Christian V Ponto dalam paparan di kantornya, Jl Gatot Subroto, Jakarta, Jumat (6/2/2009).

Tahun 2008, perseroan berhasil memproduksi migas sebesar 25.100 mboepd, naik tipis 3,71% dari produksi tahun 2007 sebesar 24.200 mboepd. Pertumbuhan dari tahun 2007 ke 2008 memang tipis akibat menurunnya produksi minyak sebesar 3,66% menjadi 10.500 barel per hari (bph) dari tahun 2007 sebesar 10.900 bph.

Sementara produksi gas perseroan masih tumbuh 10% menjadi 88 bbtud (juta kaki kubik per hari) di 2008. Tahun 2007, produksi gas perseroan sebesar 80 bbtud.

"Tahun ini, kami menargetkan produksi minyak sebesar 40% dari total produksi migas sebesar 30.000 mboepd," jelas Christian.

Mengacu pada angka tersebut, produksi minyak perseroan akan sebesar 12.000 bph atau naik 14,28% dari tahun 2008. Untuk gas, target produksi perseroan sebesar 108 bbtud, naik 22,72% dari posisi tahun 2008.

"Kami yakin target tersebut dapat tercapai. Desember 2008, kami telah mencapai produksi sebesar 31.000 mboepd. Patokan itu akan kita pakai di 2009," ujar Christian.

Harga rata-rata minyak yang diterima perseroan di tahun 2008 sebesar US$ 96,4/barel, naik drastis 31,51% dibanding posisi akhir 2007 di level US$ 73,3/barel.

Harga rata-rata gas yang diterima perseroan sebesar US$ 2,8/mcf (1.000 kaki kubik), naik 7,69% dibanding tahun 2007 di level US$ 2,6/mcf.

"Tahun ini kami menargetkan harga gas di atas US$ 3/mcf. Untuk harga minyak sulit diprediksi. Tapi kita mungkin pakai patokan US$ 40/barel," jelas Christian.

Mengenai biaya produksi migas, tahun 2008 sebesar US$ 5,9/boe (barel minyak ekuivalen), turun 11,94% dari posisi tahun 2007 sebesar US$ 6,7/boe.

"Tahun ini mungkin akan kita tekan lagi, sebagai langkah antisipasi penurunan harga minyak dunia. Jadi kita genjot produksi 20%, opex akan kita pangkas 20%, termasuk biaya produksi," papar Christian.

Mengenai kinerja, hingga triwulan III-2008 perseroan berhasil membukukan pendapatan sebesar Rp 1,36 triliun, naik 87,4% dibanding periode yang sama tahun 2007 sebesar Rp 726,425 miliar.

Namun perseroan masih membukukan rugi bersih sebesar Rp 71,226 miliar. Periode yang sama tahun 2007, perseroan masih membukukan laba bersih sebesar Rp 85,344 miliar.

"Rugi bersih disebabkan adanya pengeluaran sekali akibat perpanjangan pinjaman pada semester II tahun lalu sebesar US$ 16 juta. Tapi melihat kinerja selama triwulan IV-2008 bagus. Proyeksi kami tahun 2008 full year tidak akan menerima rugi tapi laba," ujar Direktur Keuangan ENRG, Yuli Sudargo.

Mengenai target kinerja tahun 2009, perseroan optimis akan menuai keuntungan besar. Sayangnya ia enggan menyebutkan angka yang diincar perseroan.

"Selama tahun 2008, kami telah menggenjot biaya untuk peningkatan produksi yang mana hasilnya akan kami terima mulai tahun ini. Oleh sebab itu kami optimis tahun ini akan menerima hasil peningkatan produksi," ujar Christian.

(dro/lih)

Detikfinance 82 Proyek Infrastruktur Senilai US$ 20 Miliar Siap Ditawarkan

Jakarta - Sebanyak 82 proyek infrastruktur kerjasama pemerintah-swasta senilai US$ 20 miliar siap ditawarkan pemerintah melalui mekanisme public private partnership (PPP). Namun dari jumlah itu hanya satu proyek yang sudah siap tender yaitu pembangunan terminal kapal pesiar di Bali.

Hal ini disampaikan oleh Deputi Meneg PPN/Bappenas Bidang Sarana dan Prasarana Dedy Supriadi Priatna saat ditemui di kantornya, Jakarta, Jumat (6/2/2009).

"Ada 1 proyek di Bali itu yaitu yang di Tanah Ampo, sangat amat feasible, yang lain itu belum kita anggap, karena harus masih perlu market sounding," ucapnya.

Proyek-proyek itu mencakup 15 proyek kereta api, 32 proyek jalan tol, 20 air minum dan lain-lain. Khusus untuk Tanah Ampo tender yang akan dilakukan khusus untuk pengerjaan konstruksi saja sedangkan pembebasan lahan sudah dilakukan pemda Bali.

Dikatakannya, dari beberapa pembicaraan dengan para calon investor, terkuak bahwa para calon investor meminta jaminan. Yaitu jika kondisi proyek mengalami gangguan yang dipicu oleh kesalahan (kebijakan) pemerintah atau bencana alam maka pemerintah harus membeli proyek tersebut.

Dari 82 proyek itu hingga kini ada tiga kategori yaitu yang sudah siap lelang, persiapan dokumen lelang dan proyek potensial sudah mendapat persetujuan menteri atau kepala daerah.

Pembangunan terminal kapal pesiar dan akomodasi di Tanah Ampo Karang asem Bali memiliki nilai proyek US$ 23,5 juta, diantaranya US$ 8 juta akan berasal dari kantong pemerintah daerah Bali dan pembebasan tanah termasuk dana partisipasi senilai US$ 300.000.

Detikfinance Dilepas Tahun Ini, Harga Saham Green Shoe BNI Rp 2.050

Jakarta - Kementerian Negara Badan Usaha Milik Negara (BUMN) akan menyiapkan pelepasan saham green shoe milik PT Bank Negara Indonesia Tbk (BBNI) di tahun 2009 ini. Harga saham green shoe Rp 2.050 atau sama seperti harga penawaran saham kedua BNI.

Hal itu menjadi prioritas privatisasi BUMN ketimbang rencana Initial Public Offering (IPO) alias penawaran umum saham perdana beberapa perusahaan plat merah yang sudah mendapat persetujuan DPR.

Demikian hal itu diungkapkan oleh Menteri Negara Sofyan Djalil di kantornya, Gedung Garuda, Jalan Medan Merdeka Selatan, Jakarta, Jumat (6/2/2009).

"Susah (IPO) di tahun 2009 kecuali pasar bagus. Dalam kondisi pasar begini, sulit dilakukan, paling-paling kita melakukan Greenshoe BNI. Kalau ada yang berminat dan oke, mereka bisa dilakukan," ungkapnya.

Ia mengatakan, pemerintah berencana akan melepas saham BBNI tersebut melalui greenshoe pada kisaran harga Rp 2050 per lembarnya. Menurutnya, jika ada investor yang berminat pada harga segitu, maka bisa langsung dilakukan
secepatnya.

"Harus dijual diharga segitu, enggak boleh kurang. Tapi kalau harga segitu ada investor strategis berminat ya kita lepas. Dulu sudah ada keputusan komite privatisasi," jelasnya.

Ia menambahkan, pihak Kementerian BUMN sudah mendengar laporan dari BNI bahwa ada beberapa investor yang berminat dari China dan Timur Tengah. Namun, para investor tersebut belum memberikan penawaran secara resmi kepada pemerintah selaku pemegang saham pengendali.

"Saya dengar itu, tapi belum ada penawaran resmi," ujarnya

Sementara itu, mengenai privatisasi BUMN lain seperti IPO PT Krakatau Steel, PT Garuda Indonesia dan PT Bank Tabungan Negara, ia mengatakan tahun ini belum bisa dilakukan.

"Untuk privatisasi BUMN yang lain susah. Kita diam dulu untuk sementara," tandasnya.

Green Shoe adalah penambahan jumlah penawaran saham oleh penjamin emisi ketika melakukan penawaran saham. Tujuan green shoe biasanya untuk mengurangi volatilitas harga saham setelah pencatatan saham di bursa. Green shoe juga bisa digunakan untuk menstabilkan harga saham ketika sedang anjlok.

Bloomberg China, the world's largest grain producer, raised its drought-emergency alert to level one

Feb. 6 (Bloomberg) -- China, the world's largest grain producer, raised its drought-emergency alert to level one, the highest class, for the first time, as dry weather threatened crops, livestock and rural incomes. About 143 million mu (9.5 million hectares) of winter wheat are in drought, more than 40 percent of the crop, and about a third of that is in a "severe" condition, according to the Office of Flood Control and Drought Relief Headquarters. Some 4.3 million people and 2.1 million large livestock have limited access to drinking water, the office said.

The dry weather may cut grain output, curb exports and hurt efforts by the government to boost farm incomes at a time when 20 million migrant workers have lost their jobs. President Hu Jintao and Premier Wen Jiabao have ordered "all-out efforts"
to fight the drought, the official Xinhua News Agency has said.
The worst dry spell in 50 years may reduce the wheat harvest in summer "by 2-5 percent, or 2 million to 5 million tons," said Ma Wenfeng, a grains analyst at Beijing Orient Agribusiness Consultant Ltd. Still, China has 60 million tons stored in state-controlled warehouses and has "ample" supply, he said by phone from Beijing today.
Wheat prices jumped the most in two weeks yesterday because of the crop damage in China, the biggest grower. Wheat for March delivery was up 0.2 percent at $5.63 a bushel on the Chicago Board of Trade at 12:54 p.m. Singapore time today.

'Supportive'

"This is supportive for the Chicago market," said Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co. "But I don't think this will push the price sharply higher for now as China appears to have enough stockpiles," he said.
The State Council has earmarked a further 300 million yuan ($44 million) to a relief fund on top of the 100 million yuan already allocated. The dry conditions have affected about 155 million mu of all crops nationwide and spread to 12 provinces.
"China has ample wheat for now," Beijing Orient's Ma said.
"The state reserve has the ability to control the wheat market," he said. The 60 million ton stockpile is equal to more than half of annual production, he said. China boosted its wheat output for the fifth year in 2008 to an estimated 113 million
tons, according to the U.S. Department of Agriculture.
The drought is the worst to hit northern China in half a century, Xinhua said yesterday, citing a State Council meeting. Average precipitation so far in the winter wheat area is the lowest in 30 years, the China Meteorological Administration said.

Forecast Mostly Dry

Drought-hit areas of northern China will go without rain today, the administration said on its Web site. Shaanxi, Shanxi, Henan, Shandong, Anhui and Hubei provinces may get 1 millimeter to 5 millimeters of rain tomorrow and on Feb. 8, it said.
As many as 157 million mu of wheat-growing land were affected by drought in northern China, the Ministry of Agriculture said on its Web site. Almost 65 million mu in Henan,Anhui, Shandong, Hebei, Shanxi, Shaanxi, Gansu and Jiangsu provinces were "severely" affected, it said.
Wheat for May delivery dropped for the first trading day in eight on the Zhengzhou Commodity Exchange, declining 0.4 percent to 2,065 yuan a metric ton.

--Editor: James Poole

UOB-KH Indo Tambangraya Megah

Indo Tambangraya Megah
Strong financials and modest expansion aspirations

Owned by Thai-listed Banpu, ITMG produces one of the highest quality coals. It boasts prudent management and modest expansion plans.Acquisition and development ambitions should be within its means as the company is in an enviable net cash position.

Corporate Event
Owned by Thailand-listed Banpu PCL. Indo Tambangraya Megah (ITMG) is owned by Thailand-listed coal mining company Banpu PCL through the latter's wholly-owned Indonesia-based Centralink Wisesa International.Established 1987 and listed in Dec 07, ITMG is an integrated coal mining company with mining, processing and logistic operations in Indonesia.

ITMG has five affiliated companies, of which three are active operational coal mines: Indominco Mandiri (Indominco), Trubaindo Coal (Trubaindo) and Jorong Barutama Greston (Jorong). The other mines in Kitadin and Bharinto Ekatama (Bharinto) are expected to commence operation in 2009 and 1Q10 respectively.

Top quality coal.ITMG's coal is of the highest quality with an average calorific value of Rp6,230kcal/kg compared with 5,000-6,200kcal/kg for the other three major listed coal companies.

Prudent management with modest expansion plans. ITMG is one of the four largest coal stocks and top 30 largest stocks on Indonesia's stock exchange. Although ITMG has the lowest reserves of 11.8 years of production compared with 23.4 to 163.7 years for its peers, ITMG boasts prudent management and modest expansion plans. Its acquisition and development ambitions should be within its means as the company is in an enviable net cash position while other mining companies are facing tight financial constraints amid the current credit crunch.

Higher earnings in 2009 on increase in sales volume and ASP. Net profit is likely to grow 5% yoy to US$246m in 2009 on assumption of modest sales growth and a 9.6 % rise in production volume. Although benchmark coal price could fall 38% yoy to US$80 in 2009, ITMG's coal ASP may inch up 2.5% to US$65.80 due to rising contract sales prices that lag spot prices by one to two years. We expect revenues to rise 13% yoy to US$1,407m in 2009.
Net profit should fall 17% yoy to US$205m in 2010. This is based on our assumption of a 6% decline in benchmark coal price to US$75 in 2010 and a 16% decline in ITMG's ASP to US$55, on the back of modest 5% growth in coal sales volume.

Valuation/Recommendation
Higher valuation for careful management and corporate governance.We initiate coverage on ITMG with a BUY recommendation and target price of Rp12,900, which implies a higher valuation of 4.7x 2009 PE and P/BV of 1.8x in view of its careful management and corporate governance. The target price, a discount to the regional FY09 PE of 8.7x and P/BV of 1.6x, still offers 32% upside from the current price. This is a discount to our fair value estimate of Rp14,226, derived
from our three-year DCF valuation and the value of the remaining coal reserves.

CIMB Oil and Gas

Sector Note - Lower oil price assumptions - by Itphong Saengtubtim

We are cutting our crude oil price assumptions following downgrades in our regional economic growth forecasts. We have cut our average Brent crude price forecasts to US$45/bbl (from US$60/bbl) for FY09, to US$55 (from US$65/bbl) for FY10, and to US$60/bbl (from US$70/bbl) for FY11 onwards. Key reasons are poorer global economic conditions as well as lower GDP growth forecasts for Asian countries. Crude oil prices could ease below US$40.00/bbl in 2Q09. Our top pick remains PGAS, which should be less affected by weak oil prices given its strong volume growth and sustained high margins. Maintain UNDERPEFORM on PTT and PTTEP. Maintain UNDERWEIGHT on the sector.

MacQ AALI Cyclical Headwinds to Cap Run-Up

Cyclical headwinds to cap run-up

We expect CPO prices to remain weak in 2009: Our CPO price assumptions are US$400/t in CY09, US$450/t in CY10 and US$550/t for the long term. We believe that recent strength in the CPO price reflects market optimism from strong December exports out of Malaysia. However, we believe that strong exports were a function of stockpiling by China ahead of the Chinese New Year and by India in anticipation of an import duty levy. We expect exports to return to more normalised levels in coming months. In
addition, although inventories are likely to fall in 1Q09 due to seasonally low production, we expect pressure to return when production resumes in 2Q09.

Earnings hit from falling CPO prices: Based on our expectations of weak CPO prices in 2009, we estimate that AALI’s earnings are set to decline by a steep 43% YoY in FY09. However, we do note that AALI’s earnings are very sensitive to changes in CPO prices – every 1% change in CPO price from our base price assumption changes AALI’s earnings by 1.9%.

Weaker rupiah helps cushion some of the impact from weak prices: We have assumed a weaker rupiah against the US dollar (weaker by 10% for FY09 and 8% for FY10), reflecting our house view on potential weakness in the rupiah since our earnings update last October. The rupiah depreciation helps cushion some of the negative impact from weaker CPO prices, given that revenues are US$ driven while costs are mostly in rupiah. Every 1% change in the Rp/US$ exchange rate changes AALI’s earnings by 2%.

We downgrade our recommendation from Neutral to Underperform. We do believe that AALI is in a better position that its peers to deal with the current cyclical headwinds due to its strong balance sheet (zero debt). However, at12x 2009E PER, the stock is trading closer to +1 standard deviation above its historical average of 10x, which we think is unjustified, given the expected decline in earnings. Raise our target price to Rp7,800 from Rp5,100 previously

Mandiri Sekuritas Astra International Buy, TP:idr17,900

Astra International: Multi finance unit plans Rp500bn-Rp750bn bond offer (ASII, Rp11,850, Buy, TP:Rp17,900)

Astra’s multi finance unit, Astra Sedaya Finance, plans to float Rp500-Rp750bn worth of bonds to expand its financing
fund allocation to Rp12.5tn in 2009. This year’s budget is about 9.4% lower from last year allocation of Rp12.5tn. The
company aims to finance some 95-100k car units of which 60k-65k are planned for brand new units, which accounts
for about 13.3%-14.4% of our FY09F domestic car sales of 450k units (-25.9%yoy).

We maintain Buy for Astra International, which now trades at PER09F 6.0x. Our TP still offers a 51% upside.

Danareksa SMGR

Semen Gresik

Scaled-down capex plans approved

Semen Gresik held an EGM on 30 January 2009 to seek shareholders’ approval to reduce investment in power plants from an initially proposed capacity upgrade of 405MW to now only 70MW. The shareholders gave their assent. As such, Semen Gresik’s revised plans are now to develop two new cement plants with 5.0mn tonnes of new capacity and one 70 MW power plant. The management has earmarked US$1.4bn of capex up to 2014. In our view, the decision to scale back on the capex is wise give the uncertainties created by the global economic slump. We have downgraded our earnings forecast on the back of higher coal prices since Semen Gresik will no longer be protected by long term coal contracts.

We maintain our BUY recommendation on the company but with a lower target price of Rp4,100 (which translates into an EV/tonne of US$130).

Dow Jones Higher Soyoil May Push CPO above MYR1,900/ton

[Dow Jones] Higher soyoil may push up CPO above MYR1,900/ton, say traders. "Concerns persist over the poor condition of the soybean crop in Argentina, which is pushing up vegetable oil prices," says Malaysia-based trading executive. March soyoil finished 70 points higher yesterday at 33.05 cents/pound.

Dow Jones Newswires Indonesia Shares Likely Up; 1350 Resistance

[Dow Jones] Indonesia shares likely higher, helpj by steady IDR, gains in most Asian Markets after Stocks in U.S. end higher. Main Index likely in 1320-1350 band vs Thursday's close at 1328.075, +0.6%; indes still down 2.0% since start of 2009. "I think buying in commodity-related stocks on higher oil prices may continue to drive the main index higher," says trader; expects foreign funds to dominate buying. Coal miner Bumi (BUMI.JK) may gain after UOB Kay Hian initiates coverage with Buy Rating, while heavywaeight Telkom (TLKM.JK) may rise after ADRs in NY +4.2% (EDH)

UOB-KH Initiates Coverage Update Coal

UOB-KH Initiates Coverage Update Coal

·*Bumi Resources Started At Buy, Target IDR1,010 By UOB-KH
·*Indo Tambangraya Megah Target Set At IDR12,900 By UOB-KH

CIMB What's on The Table

What's on the table

Quick Takes – Ramayana Lestari – A shaky start, but stability should return later
Weak Dec 08 and shaky Jan 09 sales are only to be expected because of the economic slowdown, though buffered by festivities which boosted consumption. Falling inflation, stabilising coal and CPO prices, the government’s focus on maintaining purchasing power, and the start of election campaigning in a month should boost the disposable income of Ramayana’s target market.

Maintain Outperform and DCF-derived target price of Rp600 (WACC 15.8%, LTG 8.6%), implying 11x and 8x CY09-10 earnings.

Corporate news/News of the Day

Economy – Yudhoyono orders central bank to ‘protect’ the rupiah
Economy – Indonesia’s export growth may slow to 1%, Finance Minister says
Economy – Immediate House approval ‘key’ to stimulus success
Matahari mulls Rp1tr bond sale
Indonesian car sales probably fell 23% in Jan 09
Pertamina to halt diesel imports as demand slows
Indonesia appoints Pertamina’s first woman president

Bloomberg Nickel Rose in London

(Bloomberg) -- Nickel rose for a third day in London on speculation production cuts are starting to curb a surplus of the metal used mostly in stainless steel. Aluminum climbed to the highest in two weeks.

Supplies of nickel in warehouses monitored by the London Metal Exchange fell 114 metric tons to 83,964 tons, narrowing this year’s climb to 7.1 percent. Stockpiles are up 47 percent for copper and 22 percent for aluminum over the same period. BHP Billiton Ltd., the world’s largest mining company, closed an Australian nickel mine last month after prices plunged.

“Inventories of nickel are not rising as sharply as the other metals, suggesting the supply-demand balance for nickel has stabilized a bit,” said Daniel Smith, an analyst at Standard Chartered Plc in London. “We’re not looking for a huge surplus this year because supply has been cut back so sharply.”

Nickel for delivery in three months gained $145, or 1.3 percent, to $11,750 a ton at 5 p.m. local time, paring a climb of as much as 3.8 percent. The contract has added 4.9 percent this week.

Reductions in output are greater for nickel than any other metal, equal to almost 14 percent of last year’s production, Citigroup Inc. estimates. Nickel supply will exceed demand by 50,000 tons this year, according to Smith.

“Deliveries into LME inventories are set to subside,” Michael Widmer, an analyst at BNP Paribas SA in London, wrote yesterday in a research report. “There is no need for those producers who cut to deliver any longer into warehouses.”

Tin advanced $200 to $11,200 a ton, and zinc gained $6 to $1,180 a ton. Lead rose $19 to $1,189 a ton.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

Bloomberg World Index

North/Latin America
DOW JONES INDUS. AVG 8,063.07 106.41 1.34%
S&P 500 INDEX 845.85 13.62 1.64%
NASDAQ COMPOSITE INDEX 1,546.24 31.19 2.06%
S&P/TSX COMPOSITE INDEX 8,860.98 167.89 1.93%
MEXICO BOLSA INDEX 19,736.96 114.36 0.58%
BRAZIL BOVESPA STOCK IDX 41,108.65 979.61 2.44%

Europe/Africa/Middle East
FTSE 100 INDEX 4,228.93 0.33 0.01%
CAC 40 INDEX 3,066.29 -2.70 -0.09%
DAX INDEX 4,510.49 17.70 0.39%

Asia/Pacific
NIKKEI 225 7,949.65 -89.29 -1.11%
HANG SENG INDEX 13,178.90 115.01 0.88%
S&P/ASX 200 INDEX 3,480.50 51.90 1.51%
JAKARTA COMPOSITE INDEX 1,328.08 7.71 0.58%

Detikfinance Inflasi di Bawah 5%, BI Rate Bisa Jadi 6,5%

Jakarta - BI Rate yang kini bercokol di angka 8,25 persen bisa saja turun ke level 6,5%. Syaratnya, inflasi bisa ditekan di bawah 5 persen.

"Angka 6 persen BI Rate bisa seandainya inflasi di bawah angka 5 persen," ujar Deputi Gubernur Senior BI Miranda S Goeltom di Gedung DPR/MPR, Senayan, Jakarta, Kamis (5/2/2009).

Dalam APBN Perubahan 2009 atau APBNP 2009, pemerintah mengajukan Sertifikat Bank Indonesia (SBI) 3 bulan sebesar 7,5 persen dengan tingkat inflasi 6,2%.

Sementara pada Januari 2009, BPS mencatat inflasi secara year on year sudah jinak di bawah satu digit yakni tepatnya 9,17%.

"Dalam rapat dengan DPR tadi, kita mengharapkan inflasi bisa turun di akhir tahun, maka
ruang untuk suku bunga turun juga pasti ada. Dan suku bunganya (BI Rate) rata-rata
7,5 persen itu jika sekarang di posisi 8,25% maka nantinya bisa sampai 6,5%," urai Miranda.

Namun Miranda menegaskan, asumsi APBNP 2009 adalah menggunakan SBI 3 bulan, bukan BI Rate. Dan hasil SBI 3 bulan tergantung pada hasil lelang. Dalam lelang terakhir pada Rabu kemarin, SBI 3 bulan adalah sebesar 9,43697%.

"SBI 3 bulan kita meminta lebih rendah, pakai angka 7,5%. BI Rate bisa di bawah dari SBI 3 bulan," pungkas Miranda.

PalmoilHQ CPO futures Up on Supply Shortage

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives remained uptrend at close for four consecutive days since last Friday on concerns of supply shortage, dealers said.

CPO futures price hike was in tandem with the rise in soya oil prices as both the commodities compete for similar export destinations, they said.

At close, the contract month for February 2009 surged RM55 to RM1,920 per tonne, March 2009 rose RM39 to RM1,887 per tonne, April 2009 gained RM34 to RM1,879 per tonne and May 2009 increased RM44 to RM1,878 per tonne.

Volume increased to 11,952 lots from 11,238 lots on Wednesday while open interests declined to 84,386 contracts from 84,906 contracts previously.

On the physical market, the CPO price for February increased RM20 to RM1,900 per tonne from RM1,880 per tonne on Wednesday.

Meanwhile, the Malaysian Palm Oil Board, in a statement yesterday, said the release of the oil palm industry monthly performance for January and February has been postponed to February 11 and March 11, respectively.

Bloomberg U.S. Stocks Gain, Led by Banks, Technology Companies, Retailers

Feb. 5 (Bloomberg) -- U.S. stocks rose, pushing the Standard & Poor’s 500 Index up the most in a week, after MasterCard Inc.’s profit topped estimates and an analyst said Goldman Sachs Group Inc. and Morgan Stanley are healthy enough to repay rescue funds.

The S&P 500 rose 1.6 percent to 845.85. The index lost as much as 1.5 percent in early trading after initial jobless claims unexpectedly jumped to a 26-year high. The Dow Jones Industrial Average climbed 106.41 points, or 1.3 percent, to 8,063.07. The Russell 2000 Index climbed 1.5 percent.

“Stocks are holding more firmly against bad news,” said Robert Schaeffer, a portfolio manager at Becker Capital Management Inc., which oversees $1.6 billion in Portland, Oregon. “We may be beginning to see a change in psychology.”

Still Living’

“Sooner or later somebody has to buy something because people are still living, eating, driving and heating their homes,” said Lawrence Creatura, portfolio manager at Federated Clover Investment Advisors, which manages $2.1 billion in Rochester, New York. “There may be a recovery ahead of us as orders begin to match rates of end demand.”

Retail Rally

Wal-Mart, Target, Macy’s Inc. and Limited Brands Inc. each climbed at least 3 percent after reporting January sales that exceeded estimates as retailers offered discounts to lure U.S. consumers during the longest recession in a quarter-century.

Stocks fell at the open after the Labor Department said the number of Americans filing first-time claims for unemployment insurance benefits increased more than forecast to 626,000 last week, the highest total since October 1982. Data to be released tomorrow is forecast to show economy-wide job losses of 540,000, adding to almost 2.6 million lost last year.

“There’s no evidence that things are getting better, on the other hand there’s no evidence that we’re sinking into a black hole,” Kevin Rendino, who manages $11 billion at BlackRock Inc., said on Bloomberg Television. “If you’re looking for the market to bottom, it’s not going to be the day that unemployment peaks.”

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net.

Last Updated: February 5, 2009 16:50 EST

Bloomberg -- Crude oil rose and gasoline climbed

Feb. 5 (Bloomberg) -- Crude oil rose and gasoline climbed to a 12-week high after a government report showed U.S. fuel consumption increased and the stock market rallied.

Demand for fuels during the past four weeks averaged 19.5 million barrels a day, up 0.6 percent from the average a week before, the Energy Department said yesterday. Oil gained as much as 2.3 percent after equities rebounded and an analyst predicted Goldman Sachs Group Inc. and Morgan Stanley will repay the government funds they received.

“The consumption numbers in yesterday’s report are being taken as a sign by some that the worst is over,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis.

Crude oil for March delivery rose 85 cents, or 2.1 percent, to $41.17 a barrel at 2:47 p.m. on the New York Mercantile Exchange, the highest settlement since Jan. 30. Prices are down 7.7 percent this year and 53 percent from a year ago.

Gasoline futures for March delivery climbed 5.64 cents, or 4.6 percent, to $1.2748 a gallon in New York, the highest settlement since Nov. 13. Heating oil increased 4.02 cents, or 3 percent, to end the session at $1.3672 a gallon.

The average U.S. pump price of regular gasoline rose 0.7 cent to $1.907 a gallon, AAA, the nation’s largest motorist organization, said on its Web site today. Prices have declined 54 percent from the record $4.114 a gallon reached on July 17.

U.S. crude-oil supplies increased 7.2 million barrels to 346.1 million last week, according to the Energy Department. Inventories have gained in 17 of the past 19 weeks, leaving stockpiles 15 percent higher than the five-year average for the period, the department said.

Brent crude oil for March settlement rose $2.31, or 5.2 percent, to end the session at $46.46 a barrel on London’s ICE Futures Europe exchange. Brent futures traded at a $5.29 premium over West Texas Intermediate, the crude oil grade that’s traded in New York.

Brent Premium

“European crude is tighter than U.S. crude, and that should support Brent relative to WTI,” said Mike Wittner, head of oil research at Societe General SA in London.

The price of oil for delivery in April is $4.59 a barrel higher than for March, up from a $3.92 premium yesterday. December futures are $13.90 higher than the front-month contract, versus $13.29 yesterday. This structure, in which the future month’s price is higher than the one before it, is known as contango, and is often an indicator of oversupply.

“Rising crude oil inventories are weighing down on the front-month contracts,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The Brent premium suggests that the global market isn’t overstocked.”

Volume in electronic trading on the exchange was 401,089 contracts as of 3:10 p.m. in New York. Volume totaled 474,433 contracts yesterday, down 3.6 percent from the average over the past three months. Open interest yesterday was 1.24 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.

Last Updated: February 5, 2009 16:27 EST

PalmoilHQ India’s STC seeks 12,000 tonnes of crude palm oil

February 5, 2009 15:34 GMT+8

Indian commodity trading firm State Trading Corporation of India Ltd has issued an import tender for 12,000 tonnes of crude palm oil in February and March,

The last date for submitting bids is Monday and the cargo is being sought from Indonesia and Malaysia, the company’s website showed on Thursday.

Danareksa SGRO Sell TP; idr900

Pendapatan belum teraudit adalah Rp2,2T, 6% di bawah forecast kami yang sebesar Rp2,4T
Lahan baru hanya 12.200Ha, 17% lebih rendah dari forecast kami
Cost/kg meningkat disebabkan asumsi forex yang berubah
− Tidak ada perubahan dalam struktur biaya
− Perubahan asumsi forex
− Cost 09-10F meningkat 3,7-3,3% menjadi Rp2.840-
2.960/kg produk sawit

Downgrade menjadi Rp900/saham, SELL
− Alasan
− Area lahan penanaman baru menurun
− Produksi CPO lebih rendah
− Asumsi forex yang lebih tinggi
− Lebih murah ketimbang AALI
− TP mengimplikasikan PE09-10F sebsar 8,5x-6,1x

SGRO - Still A Sell Downgrade TP 900 SELL

Danareksa Cigarettes

Angka FY08

Volume tetap besar
− Pertumbuhan volume yang kuat di 9,1%
− Machine (buatan mesin) (+11,5%) didorong oleh pertumbuhan segmen mild yang mencapai
40,41%
− Hand rolled (buatan tangan) (+6,61%) dan white (putih) (+3,1%)
− …namun dengan profitabilitas yang menurun

Pangsa pasar industri
− Sampoerna masih menjadi pemain terkuat
− Pemain yang lebih kecil juga mampu memperbesar pangsa pasarnya
− GGRM masih no.1 untuk SKM (sigaret kretek mesin) namun pangsa pasarnya terus tergerus

Outlook industri
− Tarif baru mulai diaplikasikan di 1Feb09
− GGRM sedikit diuntungkan dibanding kompetitornya
− Diperkirakan profitabilitas akan membaik

Valuasi
− Tidak ada perubahan untuk rekomendasi
− BUY untuk GGRM dan SELL untuk RMBA
Sektor Sigaret Analis: Naya Tirambintang

CIMB BNII

Bank Internasional Indonesia
Quick takes - Ceasing coverage -
(BNII IJ / BNII.JK, Ceased coverage, Rp325, Financial Services)

We are ceasing coverage of BII, given its small remaining free float after Maybank's tender offer. The bank has also announced its FY08 results, which were below our and consensus forecasts, on higher-than-expected provisioning expenses. BII also restated its FY07 results to reflect changes in WOM Finance's revenue accrual method, correcting its net profit to Rp353bn from Rp405bn.

We formerly had an Underperform rating on the bank, with a Gordon Growth-derived target price of Rp139.

BASML ASII Would Accumulate Upon Correction. Buy PxT idr14,150

ASII guides for downbeat car & 2-wheeler volume for 2009; This is not surprising due to weak commodity px and lack of affordable financing. We like ASII as one of the best name for investor who are willing to sit/wait in a bit of pain for LT gain. Tom Price expects thermal coal contracts settled in next few months at lower range at US$60-70/t. Pls join our conf call w/ Dave Rosenberg this Friday at 9am HK/Singp. He brings forward the trough and now expects Q309 to be the first quarter of positive growth in the US.

ASII: 2009 guidance
Management guides for 2-wheeler sales to decline by 20-25% to 4.8mn units (10% above MLf) and car sales to drop 30-35% to 415k (6% above MLf) in 2009. The weakness is due to: (1) lack of affordable financing as lending rates for 2-wheelers have risen by 2ppt YoY to 35% and car by 7ppt to 25%, (2) higher down-payment, and (3) collapse in commodity px which adversely affected demand from outer Java. Good news is delinquency rates at end-08 was lower than expected at 2.7% for 2-wheeler (overdue >60 days) vs 5% in 2005-06, while NPL for car was only 1.7%. ASII expects moderate deterioration in NPL in 2009, thanks to resilient domestic economy and govt’s fiscal stimulus program which will strengthen purchasing power. Watch these catalysts: (1) stable Rp will enable greater flexibility in monetary & fiscal policies, and (2) 3-4ppt decline in financing companies’ borrowing costs, and lower down payment. Shr price has declined 55% from 2008 peak but increased 18% YTD. ASII is Indo's blue chip with prudent mgmt, solid B/S and good brand equity;

Would accumulate upon correction. Buy PxT Rp 14,150.

Bloomberg Unilever Says Forecasting ‘Inappropriate’ in Uncertain Market

Feb. 5 (Bloomberg) -- Unilever, the world’s second-largest consumer-products company, said it’s “inappropriate” to forecast the next two years as the global economy slows, and reported a 58 percent gain in fourth-quarter profit.

Net income for the period was 1.14 billion euros ($1.46 billion), or 39 cents a share, up from 721 million euros, or 24 cents, a year earlier, the Rotterdam-and London-based company said today in a Regulatory News Service statement. The median estimate of eight analysts surveyed by Bloomberg News was 876 million euros. Sales rose 4 percent to 10.5 billion euros.

Chief Executive Officer Paul Polman, who is a month into the job, faces a global recession that has caused rivals Procter & Gamble Co. and Kimberly-Clark Corp. to miss sales forecasts. The maker of Lipton tea and Magnum ice creams has raised prices for margarines and soaps in Asian and African countries, just as Europeans reach for cheaper private label products.

“Given the current economic uncertainty I believe it would be inappropriate at this stage to provide an outlook specifically for 2009 or to reaffirm the 2010 targets,” Polman said in the statement.

Sales, excluding purchases and currency swings, increased 7.3 percent, slowing from the previous quarter’s 8.3 percent growth.

The company’s shares fell 26.5 cents, or 1.5 percent, to 17.17 euros in Amsterdam trading yesterday.

“Unilever has to cut costs even more and invest in new products to compete with private labels in Europe,” said Ton van Ooijen, an analyst at Kepler in Amsterdam. “Long-term growth can be found in the emerging markets, especially in Asia.”

To contact the reporter on this story: Jeroen Molenaar in Amsterdam jmolenaar1@bloomberg.net.

Bloomberg Palm Oil Little Changed Amid Speculation Supplies May Decline

Feb. 5 (Bloomberg) -- Palm oil futures traded little changed in Malaysia amid speculation that production may be slowing even as demand is sustained during the global recession.

The price may be “well supported” at about 1,800 ringgit a metric ton amid signs of lower output, Penny Yaw, an analyst at Citigroup Inc., said Feb. 3. Exports from Malaysia, the second-largest producer, “should pick up by March,” Yaw wrote.

Palm oil for April traded at 1,850 ringgit ($497) a ton on the Malaysia Derivatives Exchange at the 12:30 p.m. local time break, 0.3 percent higher. Earlier, the contract gained as much as 0.5 percent to 1,855 ringgit, the fourth day of gains.

Planters in Southeast Asia are in a seasonal “low-crop” period, capping potential supply, Lee Oi Hian, chief executive officer of Kuala Lumpur Kepong, said this week. The head of the Malaysia’s third-largest grower was “bullish” about prices.

Malaysia’s palm oil exports fell 19 percent to 1.3 million tons in January from December’s record, Societe Generale de Surveillance, an independent cargo surveyor, estimated yesterday. The shipments in December helped cut a record inventory by 12 percent to 2 million tons.

“Cheaper prices, better supply seem to outweigh the recession when it comes to demand” for vegetable oils, the Home-Grown Cereals Authority of the U.K. said in a report on its Web site. “The very large palm oil stocks are one of the main reasons why vegetable oil prices have fallen so sharply.”

Palm oil, used mainly in cooking, is the cheapest cooking oil and the main substitute for soybean oil, which is produced mainly in the U.S., Argentina and Brazil.

Soybean oil for March delivery in Chicago rose 0.5 percent to 32.52 cents a pound at 12:45 p.m. Singapore time, making it about 40 percent more expensive than palm oil.

Soybean oil prices have dropped 40 percent in the past six months, with palm oil dropping 33 percent, according to Bloomberg data.

To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net

Bloomberg Citi Says Palm Oil to Gain From Argentina Drought

Feb. 5 (Bloomberg) -- Palm oil prices may get a boost from drought in Argentina, the world’s third-biggest producer of the substitute crop soybeans, and as consumers seek to cut food costs amid the worst economic slowdown in decades.

The majority of the world’s palm oil is produced in Indonesia and Malaysia and about half the soybeans usually come from Brazil and Argentina, according to Citigroup Inc.

The CHART OF THE DAY shows the premium of soybean oil over palm has narrowed, even as palm oil stockpiles reached a record. During previous increases in inventories, the spread widened. This time, palm oil prices may rise even as output increases.

“The gap could narrow further as we expect consumers to continue to react to the price competitiveness,” Citigroup analyst Penny Yaw wrote in a report, which highlighted Malaysian producers including IOI Corp. and Kuala Lumpur Kepong Bhd. The average spread since the 1980s was $107 per metric ton, Citi said. That compares with the high of $494 on Aug. 26 and about $200 now, data compiled by Bloomberg show.

Malaysian palm oil futures have gained 9 percent this year to 1,845 ringgit ($509) a ton, after posting their biggest decline in almost a decade in 2008. The government forecasts record production of 18 million tons in 2009, 2.9 percent more than last year. The Indonesian Palm Oil Association said output of the food and fuel additive there will be 20 million tons.

Soybean oil is down 2.8 percent this year on the Chicago Board of Trade. Argentina and Brazil both cut soybean output forecasts citing drought and heat, Yaw wrote Feb. 2.

To contact the reporter on this story: Lee J. Miller in Bangkok at lmiller@bloomberg.net

UBS Indika: Potential Acquisition

Indika: Potential acquisition – (updated version of yesterday’s comment) - Last Friday, news reported that Indika is one of the bidders for a stake in the Singapore-listed Straits Asia Resources (SAR; market cap: USD674mn as of today’s close). SAR owns two operating coal mines in Indonesia, with total reserves of over 111mn tonnes. Straits Resources (SRL), the parent and 47.1% shareholder of SAR, was reported to have received a few bids for its stake, which could worth at least USD318mn. We are not surprised by Indika’s interests in SAR as the company continued to sit on its IPO proceeds (cash on hand was USD228mn as of Sep 08), and has indicated before that they would be looking for targets especially mining assets. In fact, SAR is a cash generative asset as opposed to a greenfield site. However, management has provided little guidance as to its game plan for SAR. After all, it is only one of the bidders for the asset (other bidders as reported by the newswire include Noble Group (BB+/Ba1) and Xstrata Plc (BBB/Baa2)), and whether it will be joined by other partners is not yet known.

We expect Indika to pursue its expansion strategies within its ability and the financial parameters of the dollar bond (including the 2.5x FCCR). Hence, we
maintain our BUY recommendation on Indika.

UBS Maintain our BUY Recommendation on PGAS

Bisnis Indonesia reported last week that PGN may face losses on its cross-currency (USDJPY) swap contract due to hedging transactions on its debts. Officials from the
company were quoted as saying that they were still working on the extent of the loss. Such potential loss arose from JBIC’s JPY denominated loan, which was provided to the government of Indonesia and then on-lent to the company. The size of the loan amounted to JPY49bn and a third of it was hedged (~JPY19bn or USD213mn). While being devoid of a number, we believe PGN’s balance sheet can take on a fair bit of hit before material impairment (9M08 annualized EBITDA stood at ~USD500mn, net debt/EBITDA at 1.2x, and net debt/equity at 84%). As of Sep 08, the company actually reported gains on its swap contracts of ~USD2.5mn, which should serve as a cushion to a loss. Moreover, the contract will only be settled when PGAS can buy JPY after Aug 2011; hence the potential loss is unrealized and will have no current cash flow impact.

We maintain our BUY recommendation on PGAS

DBS Telecommunication Rebalancing Levies

Telecommunication Rebalancing levies

Bloomberg reported that the President cut telco services levy to 0.5% of annual sales from 1% previously. The Government had also set Universal Service Obligation fees at 1.25% of sales after deducting uncollectible receivables and interconnection charges, up from 0.75% previously.
This move effectively channels more funds towards the development of telecommunication for the rural areas. While the reduction of 0.5% services levy could raise PT Telkom’s (TLKM IJ) FY09 earnings by <3% and PT Indosat’s (ISAT IJ) by
<5%, the 0.5ppt increase in USO services could mitigate bulk of the benefit from the lower services levy. As the impact is minimal.
We retain our Neutral stand on the telecommunication sector.

Mansek 50bps cut : More breathing room for the economy

50bps cut : More breathing room for the economy

Bank Indonesia (BI), as expected, cut the benchmark rate by 50bps to 8.25%. Easing inflationary pressure and weakening domestic demand have encouraged BI to aggressively reduce the interest rate.

BI also mentioned that currently banking fundamentals remain sound and the liquidity has improved. This is reflected in bank’s capital and nonperforming loan ratio that remained in the safe limits.

Besides ensuring liquidity, we expect, BI to continue to improve its monetary policy transmission by narrowing spread between SBI and the BI rate. Thus, this could potentially enhance banks’ lending activities.

The impact on Rupiah, we believe, would be muted as recent movement in Rupiah exchange rate was more due to heightened risk aversion, which increased US$ demand across the globe.

Currently, we still maintain our BI rate forecast and inflation forecast at 8.0% and 6.8% yoy at the end of 2009. However, given the recent data, there is probability that the inflation and interest rate may fall below our projection.

DBS Astra International Fully Valued TP; idr11,200

Astra International
Jan 09 can and motor cycle sales dropped
(Fully Valued; ASII IJ; Rp11,700; TP Rp11,200)
It is reported that Jan 09 domestic car and motorcycle sales
fell 25% y-o-y and 20.5% y-o-y, respectively. Car sales fell to
around 31,000 units in Jan 09 or dropped c.24% m-o-m.
Meanwhile domestic motorcycle sales fell to around 376,000
units or dropped c.7% m-o-m.
According to the motorcycle producer association, Honda sold
179,685 units (+3.4% m-o-m), Yamaha 162,656 units (-
16.3% m-o-m) and Suzuki 22,369 units (-27.8% m-o-m).
Hence, Honda gained its market share back to 49%, higher
than Yamaha.
The automotive sellers blamed price increase and lack of
available auto financing as the cause of weak auto sales in Jan
09. Auto producers had raised the selling price of the
products by around 5-10% in Jan 09 due to the weakening
rupiah. We are reviewing our forecast and target price for
ASII.

DBS Adaro Energy TP; idr830

Adaro Energy
FY08 operational result (Buy; ADRO IJ; Rp770; TP Rp830)
Adaro Energy (ADRO) reported its FY08 operational results from its coal mine division, mining contracting division and port handling terminal division.
Production for FY08 ADRO coal mine unit, Adaro Indonesia, was 38.5mn tons (+7% y-o-y), slightly higher than our estimate of 37.5mn tons, while it sales volume including third party coal trading) reached 41.1mn tons (+9% y-o-y).

The company mining contracting unit, Saptaindra Sejati has mined a total of 11.3mn tons (-5% y-o-y) of coal for FY08, 39% lower than our estimate of 18.7mn tons.
Indonesia Bulk Terminal, ADRO’s coal handling terminal has shipped 8mn tons of coal (-33% y-o-y) for FY08, 33% lower than our estimate of 12mn tons.

Overall, the operational results reveal a mixed bag of performance, thus at present we maintain our forecast and valuation for ADRO. At current price the counter is traded at 5.4x FY09 PE.

CIMB BBCA Upgrade it to Outperform from Neutral

Although we expect BCA’s NIM to ease, we believe its profit is unlikely to contract in 2009, as its 2007 experience suggested. The bank’s variable-rate government bonds have dropped significantly on maturity. Excessive provisioning coverage should also provide enough P/L buffer. A lower tax rate offers further upside potential. BCA continues to be an excellent deposit-taker. We upgrade it to Outperform from Neutral given its recent unwarranted share-price correction on fears of a NIM decline. Our DDM-based target price remains Rp3,425.

CLSA Coal update

Coal update

Adaro Energy – 4Q operating activities: No surprise

The company reported a total production of 38.5m tonnes, up by 7% YoY, in line with our estimate. Sales volume was higher at 41.1m tonnes as there was some 1.3m tonnes third party coal sold by Coaltrade, a coal trading subsidiary while the company also sold more from inventory that was down by 75% YoY in 4Q08. Overburden removal in FY08 was up by 33% YoY to 159m bcm, while it was up by 29% YoY in 4Q08, suggesting additional capacity at the mine. The company maintained its guidance for 42-45m tonnes production in 2009. Our production forecast of 40m tonnes for this year is at the conservative then.

ASP for 2008 reached around US$39/t, just slight below our forecast of US$40/t. The company maintains its guidance of ASP of US$52-65/t in 2009 as compared to our estimate of US$58/t. The company stated that it has contracted and priced 70% of its volume in 2009.

We rate Adaro as Outperform with target price of Rp925. Adaro trades at par with domestic peers though it is at 25% discount to regional ones. Adaro, in our view, lacks the defensive traits such as cash-rich-debt-free balance sheet and high dividend yield that peers like ITM offers.

Thermal coal market - More Chinese imports?

As reported by National Business Daily, China Resources Power (0836 HK) plans to increase imports of coal as domestic coal-power negotiations remain in stalemate and spot prices in China are close to quotations on the international market. CEO China Resources Power was quoted saying that the company might increase imported coal to 50% of requirement. Note that compared with the other big five independent power producers, CRP has more power plants in coastal areas. Note that at the end of Jan09, domestic benchmark thermal coal price stood at HK$715/t at Qinghuangdao Port while Australian Newcastle was at US$82/t or HK$635/t plus US$8/t for freight.

CRP has about 10GW capacity, so annual coal demand is around 30m tonnes. If CRP imports half its requirement, would equate to 15Mt or around 2% of the seaborne thermal coal market, hence positive. However, it is probably too early to conclude as CRP did not do much import last year.

CLSA BBRI downgrade to OPF

Research Today: Bank Rakyat downgrade to OPF

Finally, Nicolaos Oentung downgrades his favorite bank: Bank Rakyat Indonesia (BBRI IJ) from BUY to OPF. TP is unchanged at Rp4,500. BBRI share price has done well, up 27% since Nov 08 low vs. single digit gains for the average Asian banks.
However, we still expect BBRI to remain highly profitable supported by its strong micro franchise and conservative provisioning policies. At 2.0x 09CL PBV with 25% ROE, BBRI appears well-priced in our view.

Two major points from the report:

(1) Nico argues that BBRI could face its first balance sheet stress test post Asian financial crisis due to:
Rapid loan expansion: more aggressive than peers such as BBCA and BMRI in the past 2 years, and total amount disbursed from 2007-08 was more than BBRI’s total combined for the previous 7 years.
Severity of current economic slowdown. CLSA economics team just lowered Indo’d GDP growth in 09 from 2% to less than 1%.

The medium and corporate loans contributed the largest portion (32%) of new loans disbursed in 07 and 08. NPL for medium and corporate can be considered spotty with average NPL of 10.1% and 14.7% respectively. Understood that there is some legacy issue, but this portfolio carries higher risks, esp when the weather is bad.

(2) Capital shortage to constrain growth. CAR currently stood at 13.5% and assuming loan growth of 20-25%, we estimate CAR to decline by 150-200bps by end of 2009. Add operational risk charge, CAR will be reduced by another 300-350bps, so BBRI’s CAR will fall to almost BI’s min requirement of 8% by 2010.

BBRI plans to raise US$300mn sub debt in 2H09 to boost capital. Not going to be easy unless market condition improves. This is evident by Bank Permata’s (BNLI IJ) effort to raise US$200mn sub debt: they need to get Astra and Stanchart as standby buyer.

Detikfinance BNBR-Northstar Pacific Partners Ltd

Rencana masuknya Northstar Pacific Partners Ltd sebagai pemegang saham PT Bakrie & Brothers Tbk (BNBR) masih menunggu hasil penerbitan saham baru (rights issue) yang akan dilakukan sebelum Mei 2009.
"Jika 100% rights issue dieksekusi pemegang saham, maka Northstar akan menerima cash bukan saham," ujar Direktur Utama BNBR, Nalinkant A Rathod saat dihubungi detikFinance, Kamis (5/2/2009).

Menurut Nalinkant, mekanisme penyelesaian utang BNBR ke Northstar akan sangat bergantung pada realisasi hasil rights issue. Jika saham baru yang akan diterbitkan tidak dieksekusi sama sekali oleh pemegang saham BNBR, maka semua saham baru tersebut akan dikonversi menjadi CB senilai Rp 4,26 triliun.
Jika demikian, maka Northstar akan menguasai 31,25% saham BNBR. Namun sebagaimana dikatakan Nalinkant, jika pemegang saham mengeksekusi rights issue maka pelunasan utang BNBR ke Northstar akan dilakukan dengan mekanisme pembayaran bukan penyerahan sebagian saham perseroan.

Pada triwulan I-2009, BNBR berencana menerbitkan obligasi konversi (convertible bond/CB) senilai Rp 4,26 triliun. CB akan mengkonversi sebanyak-banyaknya 42,6 miliar saham BNBR. CB tersebut akan diterbitkan kepada Northstar Pacific Partners Ltd. Pada akhir tahun 2008, Northstar telah menalangi utang BNBR kepada Oddickson Finance senilai US$ 575 juta.
Pada April 2008, BNBR memperoleh pinjaman dari Oddickson senilai US$ 1,086 miliar dengan menjaminkan 22,6% saham BUMI, 21,44% saham ELTY, 40% saham ENRG, 7,47% saham UNSP dan 27,32% saham BTEL.

BNBR tidak dapat melunasi utang tersebut. Oleh karena itu, Northstar menalangi sisa utang BNBR kepada Oddickson sebesar US$ 575 juta.
Aset-aset yang dijaminkan ke Oddickson pun kini beralih ke Northstar. Jumlah aset saham yang dipegang Northstar juga sudah berubah lantaran ada yang sudah di top up dan ada juga yang sudah dilepas ke pasar oleh Oddickson.
Sisa aset-aset BNBR yang kini dipegang Northstar terdiri dari 14,98% saham BUMI, 11,92% saham ELTY, 43,2% saham ENRG, 8,03% saham UNSP dan 24,86% saham BTEL.

"Untuk aset saham BUMI yang dipegang Northstar, telah kita bentuk Special Purpose Vehicle untuk membahas berapa yang akan dipegang BNBR, berapa yang akan diambil Northstar," jelas Direktur BNBR Ari Saptari Hudaya dalam paparan 14 Januari 2009.
Sementara untuk aset-aset ELTY, ENRG, UNSP dan BTEL yang kini dipegang Northstar akan dikembalikan kepada BNBR. "Mekanismenya dengan menggunakan CB," ujar Ari.

Ari mengatakan, utang BNBR pada Northstar sebesar US$ 575 juta. Setelah dikurangi saham BUMI yang kini ditangani BNBR bersama Northstar dalam SPV, sisa utang yang harus dilunasi BNBR ke Northstar sebesar Rp 4,26 triliun.
"Kita harus lunasi utang tersebut agar aset-aset yang dipegang Northstar (kecuali BUMI) dapat kita miliki kembali," jelas Ari.
Oleh karena itu, BNBR akan menerbitkan CB senilai Rp 4,26 triliun kepada Northstar. Saat ini pembahasan sedang dilakukan kedua belah pihak.
"Jatuh tempo CB kira-kira Mei 2009," ujar Direktur Keuangan BNBR, Yuanita Rohali.

Yuanita mengatakan, setelah CB jatuh tempo bulan Mei 2009, CB akan dikonversi menjadi 38,7-42,6 miliar saham BNBR atau sekitar 29,2%-31,25% saham BNBR. Namun sebelumnya, BNBR akan menerbitkan saham baru untuk dikonversi menjadi CB pada periode April-Mei 2009.
"Harga eksekusinya sekitar Rp 100-110 per saham," jelas Yuanita.
Mengacu pada apa yang dikatakan Nalinkant di atas, maka realisasi masuknya Northstar ke BNBR akan sangat bergantung pada pelaksanaan rights issue.
Sehubungan dengan itu, Nalinkant mengatakan dua rencana aksi korporasi tersebut akan dimintakan persetujuan Badan Pengawas Pasar Modal &amp; Lembaga Keuangan (Bapepam-LK) dalam waktu dekat. "Kita masih memproses dan akan meminta persetujan Bapepam dalam waktu dekat," ujarnya.

Sumber: detikcom

MACQUARIE Initiate Coverage on Adaro Energy TP; idr1,000

We initiate coverage on Adaro Energy with an Outperform recommendation and a Rp1,000 target price, representing 35% potential upside. We like the company’s operations which benefit from a strong production growth outlook, scale, ownership of infrastructure, increasing 2009 prices, a low cost base and attractive valuation.

However, the jury is out as to whether Adaro is just a good trade, or an investment grade company due to corporate governance concerns. We provide a roadmap for investors to take a view on management.

Production to double given infrastructure and reserves

Adaro is an integrated coal producer which owns key infrastructure including its ports. This, combined with its impressive production track record, gives us confidence that the company can increase production from an estimated 38mt pa in 2008 to 50mt in 2010E and 80mt in 2015. Adaro is Indonesia's second-largest producer and a top ten global exporter, with 928m tonnes of reserves and 2.8bn tonnes of resources.

Large price increases in 2009 to drive earnings growth

We forecast Adaro's average selling price in 2009 to increase 47% to US$61/t leading to 2009 EPS increasing over 200%, partly due to low-priced legacy contracts being renegotiated at the request of the government.

Low cost base buffers falling coal price & lower coal quality

Adaro is a low-cost operator (due to its low strip ratio of 4–5x vs the Indonesian average of 8–9x) with production cash cost per tonne of roughly US$26 and US$29/t (2008–09E) vs the Indonesian industry average of US$33–35/t. This helps defend the company against falling prices and its lower quality coal product.

Attractive valuation vs regional peers

We believe the stock is attractively valued on a 4.3x adjusted PER, 10% dividend yield and 29% FCFE in 2009E, roughly a 34% discount to the regional coal sector.

Experienced management; corporate governance catalyst

The founding shareholders (the Soeryadjawa, Thohir, Rachmat and Subianto families) are respected by investors given their links to the Astra group. Also, in recent years there has been consistent reporting to leveraged buyout banks and cornerstone investors such as GIC, Citigroup, Farallon, Goldman Sachs and Kerry Coal.

However, we remain concerned (in light of recent events at Bumi) about the potential for related-party transactions and therefore rate Adaro “middle of the pack” vs other Indonesian coal names. We highlight the roadmap for the company to potentially become investment grade:

Redeem US$100m short-term investment in Recapital (potential related party).

Minority approval requested for potential related-party transactions.

Transparent placement of cornerstone investors’ stakes providing liquidity.

Reuters Crude palm oil futures climb 3.2%

Malaysian crude palm futures ended up 3.2 per cent yesterday but came off week highs.

Some investors bought on advancing crude and equity markets and expectations of a sharp decline in domestic inventories also pushed the market higher, traders said.

Palm oil, used in chocolates to biofuels, have steadily climbed more than a third on weakening production and expectations of spillover demand as drought in Argentina tightens supply of competing soyaoil.

The benchmark April contract settled up RM57 to RM1,845, after going as high as RM1,852, a level unseen since Jan. 23.

Other traded contracts rose between RM23 and RM81 while overall volume stood at 11,238 lots of 25 tonnes each.

Traders said January production fell 17 per cent to 1.22 million tonnes from 1.48 million in Dec.

“Given China plant closures in January for Chinese New Year, (palm oil) stocks will likely remain flat or fall slightly (in January) but the decline will be more pronounced from February,” BNP Paribas analyst Michael Greenall said in a note.

In the Malaysian physical market, palm oil for Feb. shipment was quoted at RM1,850-RM1,860 per tonne in the southern region. Trades were done between RM1,830 and RM1,850 ringgit. - Reuters

PalmoilHQ India’s MMTC imports 12,000 tonnes palmolein

India’s MMTC Ltd has imported 12,000 tonnes of RBD palm olein at $580 per tonne, its first overseas purchase of the cooking medium in three months, a government source said.

Late last month MMTC had floated the tender to import 30,000 tonnes of RBD palm olein but decided to buy only 12,000 tonnes, the official, who did not wish to be identified, told reporters on Wednesday.

A global trading firm offered the lowest rate among four bidders and the highest bid was for $680 per tonne, he said.

He said MMTC had imported the RBD palmolein on behalf of the southern state of Andhra Pradesh.

India, the world’s biggest vegetable oil importer after China, imports almost half of its annual consumption of about 11 million tonnes in the form of palm oil from Malaysia and Indonesia, and soyoil from Brazil and Argentina.

Bloomberg Adaro, Esprit, Globe, NHN, Titan: Asia Ex-Japan Equity Preview

Feb. 5 (Bloomberg) -- The following companies may have unusual price changes today in Asia trading, excluding Japan. Stock symbols are in parentheses, and share prices are from the previous close, unless noted otherwise.

Gold producers: Gold may average $1,000 an ounce this year as investment demand for safe haven assets increases following fears about the financial crisis, according to a report by UBS AG, which increased its forecast by 43 percent from its previous target of $700. Newcrest Mining Ltd. (NCM AU), Australia’s largest gold mining company, fell 70 cents, or 2.3 percent, to A$29.30. Sino Gold Mining Ltd. (SGX AU), owner of China’s second- largest gold mine, fell 1 cent, or 0.2 percent, to A$4.80.

Asustek Computer Inc. (2357 TT): The Taiwanese maker of the low-cost Eee PC and Garmin Ltd. said they will combine their handset businesses to compete with Nokia Oyj and Apple Inc. Asustek fell 10 cents, or 0.3 percent, to NT$30.5.

Esprit Holdings Ltd. (330 HK): Hong Kong’s biggest listed clothing retailer said first-half profit fell for the first time in more than a decade, dropping 13 percent to HK$2.85 billion ($368 million) in the six months ended December, as Europe, its biggest market, slid into a recession. The stock gained 60 cents, or 1.6 percent, to HK$38.55.

Globe Telecom Inc. (GLO PM): The second-largest Philippine phone company, expects growth in profit and revenue to resume this year as the company cuts costs and taxes decline, President Gerardo Ablaza said. The stock fell 20 pesos, or 2.4 percent, to 830 pesos.

NHN Corp. (035420 KS): The operator of South Korea’s most- used Internet search engine posted a 31 percent increase in 2008 profit to 365.7 billion won on higher revenue from online advertising and games. The stock fell 1,000 won, or 0.7 percent, to 138,000 won.

PT Adaro Energy (ADRO IJ): Indonesia’s second-largest coal miner forecast earnings before interest, taxes, depreciation and amortization will more than double this year to as much as $1 billion. Output is forecast to rise as much as 17 percent to 45 million tons this year, the company said in a statement. Adaro advanced 40 rupiah, or, 5.5 percent, to 770.

Titan Chemicals Corp. (TTNP MK): The Malaysian maker of petrochemicals said it will seek shareholders approval for the renewal of its authority to buy back as much as 10 percent of the company’s outstanding capital. Titan climbed 1.5 sen, or 2.4 percent, to 64.5 sen.

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net

Reuters ADARO ENERGY

Reuters - Thursday, February 5 - Indonesia's second-largest coal producer, PT Adaro Energy Tbk , on Wednesday said production and sales would rise to between 42-45 million tonnes this year, despite a global economic downturn.

Adaro on Wednesday said that sales volume, including third-party coal trading, rose 9 percent to 41.1 million tonnes in 2008, despite bad weather and weakening demand, while production volume increased 7 percent to 38.5 million tonnes.

Indonesia is the world's largest thermal coal exporter and its coal miners benefitted from soaring commodity prices in the first half of 2008. But the global financial crisis has led to a sharp drop in commodity prices.

Adaro, which listed on Indonesia's stock exchange last year, previously reported a doubling in nine-month net profit to 686 billion rupiah, while revenue rose 47percent to 12.4 trillion rupiah. It hasn't reported full-year results yet.

Adaro shares rose 5.5 percent to 770 rupiah on Wednesday.

"We achieved our 2008 production and sales targets, despite sometimes difficult and challenging conditions such as poor weather at the beginning of 2008 and deteriorating global economic conditions at the end of 2008," President Director Garibaldi Tohir said in a statement

Yahoofinance World Index

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DAX 4,492.79 +117.83 +2.69%

MIBTel 14,349.00 +256.00 +1.82%

FTSE 100 4,228.60 +64.14 +1.54%

Bloomberg Rubber Advances for Second Day as Low Prices Temper Supplies

Feb. 4 (Bloomberg) -- Natural rubber futures advanced for a second day, recovering from the five-week low reached yesterday, on speculation low prices will reduce supply further.

Prices in Tokyo gained as much as 4.2 percent after yesterday slumping to the lowest since Dec. 26. Thailand, the world’s biggest producer, last week approved an 8-billion-baht ($230 million) plan to support prices and aimed to draw 200,000 metric tons from the market this year.

“The market has little room to decline given supply restriction by producers,” Shuji Sugata, a research manager at Mitsubishi Corp. Futures & Securities Ltd., said today by phone.

Rubber for July delivery, the most-active contract, rose 2 percent to close at 138.1 yen a kilogram ($1,552 a metric ton) on the Tokyo Commodity Exchange.

Gains were limited after data confirmed a worsening slump in the U.S. auto market, deepening concern demand for rubber used for tires may decline further, Sugata said.

General Motors Corp. and Ford Motor Co. said U.S. sales plummeted at least 40 percent in January, while those of Toyota Motor Corp. dived by almost a third, dragging the world’s biggest auto market to the worst month since 1981.

The plunge in sales is equivalent to an annual rate of 9.6 million cars, down from an average of more than 16 million vehicles the past decade, research firm Autodata Corp. said.

May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, gained 2.8 percent to 13,405 yuan ($1,962) a ton.

To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net

Bloomberg Indonesia Says It Has Scope to Cut Key Rate After 3rd Reduction (II)

Feb. 4 (Bloomberg) -- ‘Gloomier’ Outlook

Sluggish overseas demand is crimping Indonesia’s economic expansion. The central bank expects growth to weaken to as little as 4 percent this year, the slowest pace since 2001, from an estimated 6.1 percent in 2008.

“Several indicators show that the global economy is gloomier than estimated several months ago,” the central bank said in today’s statement. “The impact is being felt in the nation, particularly in sectors related to foreign trade.”

Growth may remain subdued unless commercial lenders are prepared to pass on the central bank’s cuts to their borrowers, said economists including Enrico Tanuwidjaja.

A half-point cut “is an important signal to the banking sector to ease borrowing costs in order to stimulate domestic business activities,” said Tanuwidjaja from Oversea-Chinese Banking Corp. in Singapore.

Commercial Lenders

Bank Indonesia has reduced its policy rate by 1.25 percentage points to an eight-month low since December, while commercial banks have lowered the overnight base lending rate to 16.44 percent from 16.47 percent in the same period, according to central bank data.

“Bank Indonesia will take the necessary measures to strengthen the Indonesian banking sector, including the necessary liquidity management,” the central bank said.

The rate cut in Indonesia follows the Reserve Bank of Australia’s decision yesterday to reduce borrowing costs by one percentage point to the lowest level since 1964.

The Philippine central bank lowered its benchmark rate for the second time in six weeks on Jan. 29, cutting the overnight deposits rate to 5 percent from 5.5 percent.

Malaysia’s central bank cut its key rate by the most in more than a decade on Jan. 21, reducing its overnight policy rate by three-quarters of a percentage point to 2.5 percent.

Indonesia forecasts inflation will slow to between 5 percent and 6 percent by August, Finance Minister Sri Mulyani Indrawati said on Feb. 2. To boost growth in the $433 billion economy, the government plans to spend 71.3 trillion rupiah ($6.1 billion) this year, Sri Mulyani said.

To contact the reporters on this story: Aloysius Unditu in Jakarta at aunditu@bloomberg.net

Bloomberg Indonesia Says It Has Scope to Cut Key Rate After 3rd Reduction (I)

Feb. 4 (Bloomberg) -- Indonesia’s central bank said it has “room” to reduce interest rates again after lowering borrowing costs for a third straight month to cushion Southeast Asia’s biggest economy from the global recession.

Governor Boediono and his seven colleagues today cut the key rate to 8.25 percent from 8.75 percent, according to a statement on Bank Indonesia’s Web site today. The decision was predicted by 20 of 23 economists in a Bloomberg News survey.

Policy makers across Asia have slashed borrowing costs as demand for the region’s exports plummet amid the global slump. Bank Indonesia, which reduced its key rate after inflation eased to a nine-month low and exports plunged, said the world economy had become “gloomier” in recent months.

“Inflation is clearly no longer an issue,” said Lim Su Sian, an economist at DBS Group Holdings Ltd. in Singapore. “More significantly, the domestic economy needs all the support it can get, with trade data pointing to rapidly deteriorating external demand.”

The rupiah increased 0.3 percent to 11,690 against the dollar at 9:49 a.m. in Jakarta following the central bank’s second consecutive half-point cut. The benchmark stock index rose 0.5 percent.

Consumer prices in Indonesia rose 9.2 percent in January from a year earlier, after increasing 11.1 percent in the previous month. Exports dropped 20 percent in December from a year earlier, the biggest decline since 2001.

“If inflation slows next month, there is room for further rate cuts,” Bank Indonesia’s Senior Deputy Governor Miranda Goeltom told reporters in Jakarta today.

Palmoil HQ Crude Palm Oil Futures Advance for Third Day on Speculation of European Demand

February 4, 2009 14:03 GMT+8

Crude palm oil futures rose for a third day in Kuala Lumpur on speculation that increased European demand for the vegetable oil may offset the prospect of slowing sales in China.

“Although demand from China could potentially slow down because of the recession, we gather that demand from Europe has been picking up,” Gan Huey Ling at AMResearch Sdn. wrote in a report. “We believe this could be due to the low prices.”

Palm oil for April delivery rose as much as 2.4 percent to 1,830 ringgit ($506) a metric ton on the Malaysia Derivatives Exchange, the highest intraday price since Jan. 23, when it touched 1,879 ringgit. The contract was at 1,830 ringgit at the 12:30 p.m. break.

Exports of Malaysian palm oil to China in December dropped to 322.2 million tons from 332.2 million in November, while shipments to Europe rose to 319.7 million tons from 256 million, according to independent cargo surveyor Societe Generale de Surveillance.

“Things in the plantation sector are not all that bleak,” wrote Gan, an AMResearch analyst. Kuala Lumpur Kepong Bhd., a Malaysian palm-oil producer, gained 0.5 percent to 10 ringgit, taking its advance since Jan. 23 to 5.3 percent. Sime Darby Bhd., the world’s palm oil producer, was unchanged at 5.4 ringgit.

Purchase Plan

KL Kepong, as the company is called, is “bullish” on prices and may buy planted land to expand, Chief Executive Officer Lee Oi Hian said today in an interview in Kuala Lumpur. Sime expects prices to rise this year, Chief Executive Officer Ahmad Zubir Murshid said in December, according to the Edge newspaper.

Palm oil, used mainly in cooking, is a substitute for soybean oil, which is produced mainly in the U.S., Argentina and Brazil. Soybean oil for March delivery in Chicago traded at 32.01 cents a pound at 11:21 a.m. Singapore time, making it about 40 percent more expensive than palm oil.

Soybean oil rose after Meterologix LLC said Feb. 2 that more rain was needed to support the filling of soybean pods this month in the main growing regions of Argentina. The harvest in Argentina, the largest exporter of soybean oil, may drop 25 percent this year because of drought, Ricardo Forbes, president of the Buenos Aires Cereals Exchange, said last month.

Detikfinance Keputusan Arbitrase Newmont Keluar April 2009

Jakarta - Keputusan pengadilan arbitrase antara pemerintah dan PT Newmont Nusa Tenggara (NNT) diperkirakan akan keluar di bulan Maret atau April 2009. Keputusan arbitrase itu bisa menjadi modal pemerintah memutus kontrak Newmont.

Demikian disampaikan Menteri ESDM Purnomo Yusgiantoro di Hotel Dharmawangsa, Jakarta, Rabu (4/2/2009).

"Arbitrase akan keluar Maret atau April keputusannya," katanya. Menurut Purnomo, pengadilan arbitrase bukan akan menentukan apakah kontrak Newmont putus atau tidak, melainkan membuktikan apakah Newmont lalai terhadap kewajibannya atau tidak. Jika pengadilan arbitrase memutuskan Newmont terbukti lalai, maka pemerintah mengantongi bukti untuk memutuskan kontrak Newmont.

"Bukan minta kontrak diputus tapi Newmont tidak lalai terhadap kontrak. Kalau pengadilan sudah memutuskan dia lalai, kita bisa katakan kita putus," katanya.

Seperti diketahui, pemerintah mengajukan Newmont ke pengadilan arbitrase karena dinilai melalaikan kewajibannya mendivestasikan saham pada 2006 dan 2007 sesuai perjanjian kontrak karya yang diteken oleh NNT dan pemerintah pada 2 Desember 1986.

Sejauh ini, pengadilan arbitrase pemerintah dan Newmont masih dalam proses. Sejumlah saksi dari pihak pemerintah pun sudah diundang untuk diminta kesaksiannya.

"Arbitrase Newmont masih di proses. Saksi dari kita sudah diundang untuk diminta kesaksiannya," katanya.(lih/qom)

BNP Paribas Recent Issues and Trading Ideas

Recent issues and trading ideas
Banks started lowering their lending rates, albeit slightly. They are mulling larger cuts in the next few months (having slashed their deposit rates). Mortgage lending – hard hit by the liquidity crunch – would be a major beneficiary of banks’ improved liquidity. Banks with >5% loan exposure to mortgage are BNGA (22%), BBCA (10%), BBNI (6%) and BMRI (5%). This will also be positive for consumer lending of which ASII
will be the main beneficiary. The recent IDR weakness does not bode well with the cement (SMGR and INTP) and pharma counters (KLBF and TSPC) but this should benefit the CPO and mining exporters.

BNP Paribas January 2009 review

Macro economics
Bank Indonesia decided to cut its policy rate by 50bp to 8.75% on 7 January. With January another deflationary month, the market expects another cut of up to 50bp on 4 February. Inflation eased to 9.17% y-y in January, down from 11.1% y-y in December 2008 on the back of the 10% fuel price cut in mid-January. Lower interest rates are needed for investment to resume and banks to start lending. The government has proposed a revised budget for the year based on a 7.5% BI benchmark rate, lower economic growth of 4.5-5.5%, USD45/bbl oil price and IDR11,000/USD exchange rate.

Market development
Bakrie Group’s recent manoeuvres proved controversial. BUMI’s acquisition of three mining-contracting and coal-mining companies, totalling USD565m, have led to many downgrades on the stock.Moreover, despite its intention to stop the transactions, the capital market regulators conceded that it would be difficult to prove any violations due to the loopholes in the current regulations. Additionally, Bakrie & Brothers (B&B) managed to restructure its huge debts with Northstar, which will own up to 31% of B&B's stake. B&B will still retain the majority stake in BUMI following the debt restructuring, with 27% stake, down from 35%.This raised questions on how B&B was able to secure a deal in reducing its debt drastically and lose only a small portion of BUMI.

Concerns over Bank Danamon’s losses from its forex structured product sent the share price down 11% on 20 January. In contrast, Bank Negara Indonesia (BBNI) was the star performer in the banking sector, up 13% in January. Investors were enticed by the bank’s undeserved valuation, which at 2009 P/BV of 0.6x was the cheapest in our bank universe. Even if BBNI’s NPLs were to double to 15.5% and coverage ratio stays at
105%, the stock would still be trading at its adjusted book value.

Interest on CTRA and INCO returned in January with the expected further reduction in interest rates and improvement in nickel price, which reached the bottom in early December. ASII was supported by renewed interest in the CPO counter, as well as positive sentiment on interest rate reduction, fuel prices and the plan to cut the luxury tax on cars.

Schroder Monthly Market Review and Outlook

February 2009 Team Monthly Market Review & Outlook

There was no January effect to be found other than a negative one as risk aversion continued to weigh heavily on equity markets, despite credit spreads tightening somewhat. A continued monetary easing stance globally together with more fiscal stimulus plans & massive bailouts of financials seemed to serve only as a reminder of the gravity of the crisis. The second half of the month saw a new wave of downright capitulation from financials as earnings season kicked off to dismal bottom line data.

Bonds down across the board on historically-low yields and extreme inflation of public balance sheets. Asian yields generally higher despite more accommodative monetary policies to alleviate growth slowdown. Credit negative on more deleveraging ahead & credit crunch/muted consumption double whammy.

USD up on relative outperformance to G10 currencies. Asian currencies to suffer from USD resilience, differentiation on basis of fiscal & external debt position.

Oil -6.5% to $41.7/bbl on recession & high inventories outweighing talks of further OPEC supply cuts.
Gold +5.2% to $928/oz despite greenback strength on renewed safe haven attributes.
1257 -7.3% -7.3%

Equity
There was no January effect to be found other than a negative one as risk aversion continued to weigh heavily on equity markets, despite credit spreads tightening somewhat. A continued monetary easing stance globally (albeit at a somewhat slower pace than in December) together with more fiscal stimulus plans & massive bailouts of financials seemed to serve only as a reminder of the gravity of the crisis. The
second half of the month saw a new wave of downright capitulation from financials as earnings season kicked off to dismal bottom line data.
MSCI AC World -8.6%, US -8.6%, EU -4.8%, Japan -9.8%, Asia ex-JP -5.6%, EM -6.6%
US – Nasdaq -6.4%, S&P500 -8.6%, Dow -8.8% on macro headwinds, bailouts & dismal earnings
EU – UK -6.4%, France -7.6%, Germany -9.8% on negative earnings & gripping recession
EM – Brazil +4.7% on materials tailwinds, Russia -15.3% on energy headwinds & currency devaluation
Asia – China-A +9.3% on domestic fiscal stimulus, China-H -9.6% on GDP slowdown & export headwinds
Healthcare -3.8% on defensive attributes ; Financials -19.2% on government bailouts & reported losses

Fixed Income
Bonds down (prices down, yields up) across the board on historically-low yields and extreme inflation of public balance sheets ; 10-year yields for US +63bp, EU +35bp, UK +68bp, JP +12bp, AU +11bp Asian yields generally higher despite more accommodative monetary policies to alleviate growth slowdown ; India +99bp, Thailand +81bp, Korea +49bp, Hong Kong +45bp, Taiwan +12bp, Philippines +6bp, Singapore +2bp ; but Indonesia -10bp, Malaysia -11bp, Vietnam -115bp ECB cut 50bp to 2%, BoE cut 50bp to 1.5%, Canada cut 50bp to 1%, New Zealand cut 150bp to 3.5%,India cut 100bp to 5.5%, Korea cut 50bp to 2.5%, Philippines cut 50bp to 5.5%, Indonesia cut 50bp to 8.75%, Taiwan cut 50bp to 1.5%, Thailand cut 75bp to 2%, Malaysia cut 75bp to 2.5%, Brazil cut 100bp to 12.75%

Currencies
US Dollar index +5.8% on relative outperformance to most G10 currencies ; Euro -8.3%, Canada -0.9%, Sterling -0.4%, Swiss -8%, Yen +0.8%, Ruble -17.7% on more rounds of devaluation.Most Asian currencies lost ground on USD strength ; Kiwi -12.2%, Aussie -9.3%, Korea -8.7%, Singapore -5.3%, Malaysia -3.9%, Taiwan -2.7%, Indonesia -2.2%, Thailand -0.7%, China -0.4%, India -0.1% ; but Vietnam flat & Philippines +1.2%

Commodity
Oil -6.5% to $41.7/bbl on recession & high inventories outweighing talks of further OPEC supply cuts
Gold +5.2% to $928/oz despite greenback strength on renewed safe haven attributes

Outlook
Equity
Investor sentiment to stay under pressure with more downside bias, volatility to remain at crisis-levels
US underweight on rising unemployment, higher savings rate & increasing defaults in consumer credit
EU underweight on consumption retrenchment, protracted credit crunch & dismal earnings outlook
JP underweight on currency headwinds & muted domestic consumption as unemployment rises
Russia underweight amid falling energy prices, currency devaluation & fast depleting forex reserves
LatAm underweight as Brazil hit by commodity correction and Mexico correlation to US growth cycle
Asia underweight on consumption failing to pick up the slack from falling exports, despite fiscal stimulus

Fixed Income
Credit negative on more deleveraging ahead & credit crunch/muted consumption double whammy
Fed on hold at 0-0.25% ; no more monetary bullets, fiscal stimulus & banks’ bailouts to take center stage
ECB to hold at 2.0% ; all indicators point at deflationary pressures & more severe economic downturn
BoE to hold at 1.5% ; weakening manufacturing & credit crunch overwhelm softening inflation
RBA to cut 100bp at 2.25% ; sharp rise in risk aversion as growth stalls & inflation well within target band

Currency
Fundamental analysis viewed on basis of relative economic performance & health of public finances
USD medium-term resilience on outperformance relative to G10 ex-Japan, but high liquidity a risk
Look for a pullback to add JPY positions on inflows to outweigh any potential BOJ market intervention
Asian currencies to suffer from USD resilience, differentiation on basis of fiscal & external debt position

Commodity
Oil support at 35, resistance at 50 ; to range-trade on high crude inventories & demand in refined products
Gold support at 830 ; USD resilience to balance safe haven attribute on renewed risk aversion

DBS PGAS

Perusahaan Gas Negara

National gas output to rise slightly in 2009

(Buy; PGAS IJ; Rp2,125; TP Rp2,279)

It is reported that the upstream oil and gas regulator, BPMigas, is targeting a national gas production of 7.5bn cubic feet per day in 2009, a slight increase from 7.46bn cubic feet per day produced in 2008.

Data from BPMigas shows that several gas contractors that operate aging fields have set lower output this year, however it will be balanced by several other gas companies that have set higher production targets for 2009. The companies that plan to achieve higher production are Pertamina (state oil and gas company), ConocoPhillips Ltd., ExxonMobil Oil Indonesia Inc., and Kodeco Energy Co., Ltd.

The increase output from Pertamina and ConocoPhillips is positive for PGAS, as both companies contribute more than 60% of PGAS distribution gas supply. We expect PGAS distribution gas volume to increase by 32% in 2009 to 796mmcfd. We maintain our BUY recommendation on PGAS and at present the counter is traded at 8.7x FY09 PE.

DBS Bank Rakyat Indonesia

Bank Rakyat Indonesia

targeting loan growth of 20-25%

(Sell; BBRI IJ; Rp4,400; TP under review)

Bank Rakyat Indonesia (BBRI) is targeting loan growth of 20-25% in 2009, while it will maintain its focus on micro and SMEs. BBRI believes that SMEs are more resilient to the economic crisis, as seen n the 1997 economic crisis. In addition, lending to SMEs gives higher margins. At the same time, the bank said that it will raise US$300m subdebts to strengthen its capital base.

As of Sept 08, BBRI had Rp151.5tr loans including its shariah unit, hence 20-25% growth means the bank will have to add Rp30-37.5tr in loans. We view this target as ambitious during this economic turmoil, while at the same time, the resilience of SMEs has yet to be seen. In 1997, SMEs, mainly those engaged in agribusiness sector enjoyed strong US$, but the situation is now different with the correction in commodity prices.

We foresee BBRI’s loans to grow by 12.5% in 2009, while we believe that subdebt issuance will also be difficult for this year. At the end, subdebt may not be an urgent requirement as loans may grow below its estimate.

Mansek ASII Winds of change

Winds of change

Recent visit to Astra International revealed our common view for 2009. Namely, (a) double-digit declines in car and motor sales, (b) tightening credit and (c) possible brand equity shift among consumers. Without much deviation from our views, we stick to our Buy recommendation on Astra International, which we also think is an investment gateway for plantation and heavy equipment. At our implied PER09F 9.1x, the stock trades at a 9.1% discount to the broader market multiple.

Downhill drive for vehicles. On a worst case scenario, ASII is looking toward a 30% drop in both car and motor sales in 2009, slighty more conservative than our estimates of about 20% and 25% decline for the respective segments. Tell-tale signs shows that a number of buyers have forfeited reservation fees and altogether cancelled vehicle orders in January. Likewise, with higher inventory on hand at distributorship level, ! waiting t ime for indent orders for MPV’s such as the Innova and Avanza has been reduced to 3 weeks from 2 months as of last year. It is no surprise that January car sales could reach no more than 35k units (-15.4%yoy and -10.5%mom).

Flight towards brand quality. In this current downturn, ASII benefits by virtue of brand quality which would help boost its vehicle market share albeit lower domestic demand. To recall, back in 2005-06, when interest rates were high, its market share expanded to 52.8% from 52.2% for 2-wheelers and to 54.8% from 48.5% for 4-wheelers. Plus, in light of the current global problems of other manufacturers, preference shift could widely favor Astra’s brands among the buying public.

Maintain Buy, gateway for plantation and heavy equipment as well. For those looking for a diversified investment play, Astra is an indirect channel on plantation and heavy equipment as about 33%-37% of pre-tax earnings is derived from the two segments. Currently, it trades at PER09F of 6.3x, a discount to subsidiaries United Tractors (heavy equipment) and Astra Agro Lestari (plantations) with current PER09F of 8.0x and 12.1x, respectively. Ma! intain Bu y at TP of Rp17,900/share with current price still offering a 43.8% upside.

CLSA BBRI

Bank update from Nico
Bank Rakyat (BBRI IJ) - FY08 net profit Rp5.5tn, +15% YoY

Net profit was in-line with management growth target of 10-15%. Loans grew by 43% YoY with 80% consisting of small, micro, and SME. LDR was stable compared to 3Q08 at 86%. BRI also plans to issue US$300mn sub-debt in 2H09 to boost capital for balance sheet growth.The bank targets loans growth of 20-25% in 2009. CAR now stood at 13.5%.

Comment: Net profit was slightly below our and consensus estimates of Rp5.8tn, which we attribute to slower loans growth in 4Q08 and higher provisions for loan losses. With relatively ambitious loan targets of 20-25% this year, capital is likely to be a constraint especially if we include operational risk charge starting in Jan 2010. We estimate US$300mn sub-debt issue to raise BRI’s CAR by 220bp to 15.4% but will be completely offset by additional operational risk charge. Key risk is if market conditions worsen in 2H09 when BRI tries to issue its sub-debt.

CLSA Stocks to trust, from Nick Cashmore

Research Today: Stocks to trust, from Nick Cashmore

“Trust – a firm belief in the reliability or truth or strength of a person or thing; a confident expectation; reliance on the truth of a statement etc without examination.” Oxford English Dictionary

Indeed, trust is a fundamental thesis behind the functioning capital markets and over the last 12 months, this most basic assumption has, however, been tested like never before.

In this note, we highlight some of the Indonesian companies we believe have earned the right to deserve investors’ trust. The list is not long and it is also subjective.

While earnings may face a cyclical downturn, investors should have comfort their interests as minority shareholders are being fairly represented.

(1) Unilever Indonesia (UNVR IJ): Indo’s largest consumer company earnings up 19 out of 20 years, significant outperformer.
(2) Bank Central Asia (BBCA IJ): Indo’s largest private sector bank, a third of the country’s GDP is transacted through the bank’s network each year, conservative, well capitalised, ROE has averaged 20%.
(3) Astra Group: non-core assets divested, financial risk eliminated, focused on core competency, has emerged stronger from each economic crisis
(4) Indocement (INTP IJ): Indo’s largest cement producer by capacity, lowest cost producer, the only one to sell carbon credits.
(5) Inco Indonesia (INCO IJ): Asia’s largest nickel producer, debt free, and one of the lowest cost nickel producers globally.
(6) Indo Tambang (ITMG IJ): Indo’s 4th largest coal miner, parent company Banpu has built a reputation as a reliable supplier in energy.

UBS Beneficiary of aspiration consumption

Astra International (Astra) is one the key stock picks in Simon Smiles’

Q-Series®:
Asian Structural Themes

report focusing on consumption in Asia, published on 4 February 2009. We believe Astra fits into the “Stage of development” theme, inn that aspirational consumption is a key trend. Buying a motorcycle is a major aspirational consumption item in Indonesia.

􀂄 2009 outlook: a sharp slowdown Motorcycle and car demand is cyclical, depending on credit availability. Given tight bank liquidity, particularly in H109, we forecast a 20% and 30% decline in motorcycle and car sales, respectively, in 2009.

􀂄 Medium-term growth attractive Investors should focus on medium-term growth, stemming from aspirational consumption and low penetration, in our view. From 2010, we forecast car and motorcycle sales growth to return to a sustainable rate of 15-20% pa. We believe the government’s stimulus package (Rp71trn–1.5% of GDP) will accelerate the timing of the recovery.

􀂄 Valuation: maintain price target of Rp15,300 We derive our price target of Rp15,300 from a sum-of-the-parts valuation. Astra is trading at 9x 2009E PE, with 2009E earnings 35% lower than 2008, which we believe reflects the expected downturn in the auto industry in 2009. Our price target implies 11x 2009E PE, which is conservative, in our view.