March 27 (Bloomberg) -- Wheat prices fell to the lowest in three weeks as rain and snow in the U.S. southern Great Plains improved soil moisture, boosting prospects for crops emerging from winter dormancy.
As much as 3 inches (7.6 centimeters) of precipitation fell in the past week in parts of Kansas, the biggest U.S. grower, and in Oklahoma and Texas, National Weather Service data show. Winter crops still have received less than 5 percent of the normal amount of moisture in the past three months, government data show. Wheat prices have dropped 7.8 percent this week.
“They’re getting some good moisture” in the southern Plains, said Vince Ambrose, a trader at MF Global in Chicago. “That’s why prices broke this week.”
Wheat futures for May delivery fell 7.25 cents, or 1.4 percent, to $5.0725 a bushel on the Chicago Board of Trade. The price is down 17 percent this year, partly on increased global production and declining demand for U.S. grain. Futures earlier fell to $5.03, the lowest since March 4.
World Production Outlook
World production of grain including wheat and corn is expected to be 1.725 billion metric tons in the marketing year that starts on July 1, the second-largest harvest on record behind the current marketing year, the International Grains Council said in a report yesterday.
Global wheat production in the current marketing year may total 688 million tons, the IGC said. Wheat collected in the 12 months that will start on July 1 is expected to fall 5.4 percent to 651 million tons, the council said.
Wheat is the fourth-biggest U.S. crop, valued at $16.6 billion in 2008, behind corn, soybeans and hay, government data show. The U.S. is the world’s largest wheat exporter.
Sabtu, 28 Maret 2009
Bloomberg Crude Oil Falls as Stronger Dollar Curbs Appeal of Commodities
March 27 (Bloomberg) -- Crude oil in New York fell the most in two weeks as the dollar’s gain against the euro reduced the appeal of commodities to investors and stock markets declined.
Oil dropped 3.6 percent after the U.S. currency rebounded against the euro on evidence the recession is deepening in Europe. A stronger dollar makes commodities less attractive as an alternative investment. Falling commodity prices and a report showing the U.K. economy contracted more than previously estimated sent stocks lower.
“This correction is long overdue,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “We were up pretty much all week on the rising stock market and weak dollar. The fundamentals don’t support that kind of a move.”
Crude oil for May delivery fell $1.96 to settle at $52.38 a barrel at 2:51 p.m. on the New York Mercantile Exchange. The contract rose 0.6 percent this week. Prices are up 17 percent this year.
The Reuters/Jefferies CRB Index of 19 commodities fell as much as 5.42 points, or 2.4 percent, to 222.26, the biggest one- day drop since March 2.
The euro, which is used in 16 nations, fell the most against the dollar in more than a month after Europe’s statistics office said industrial orders in the region plunged in January. The currency declined as much as 2 percent to $1.3257, the biggest intraday drop since Feb. 17, and was at $1.3301 at 2:55 p.m. in New York. more...
Oil dropped 3.6 percent after the U.S. currency rebounded against the euro on evidence the recession is deepening in Europe. A stronger dollar makes commodities less attractive as an alternative investment. Falling commodity prices and a report showing the U.K. economy contracted more than previously estimated sent stocks lower.
“This correction is long overdue,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “We were up pretty much all week on the rising stock market and weak dollar. The fundamentals don’t support that kind of a move.”
Crude oil for May delivery fell $1.96 to settle at $52.38 a barrel at 2:51 p.m. on the New York Mercantile Exchange. The contract rose 0.6 percent this week. Prices are up 17 percent this year.
The Reuters/Jefferies CRB Index of 19 commodities fell as much as 5.42 points, or 2.4 percent, to 222.26, the biggest one- day drop since March 2.
The euro, which is used in 16 nations, fell the most against the dollar in more than a month after Europe’s statistics office said industrial orders in the region plunged in January. The currency declined as much as 2 percent to $1.3257, the biggest intraday drop since Feb. 17, and was at $1.3301 at 2:55 p.m. in New York. more...
GlobalCoal Newcastle Coal Index
Weekly NEWC Coal Index
27-Feb-09 65.32
06-Mar-09 61.70
13-Mar-09 62.10
20-Mar-09 60.30
27-Mar-09 61.39
Monthly NEWC Coal Index
Dec-2008 78.18
Jan-2009 82.69
Feb-2009 75.03
Mar-2009 61.37
27-Feb-09 65.32
06-Mar-09 61.70
13-Mar-09 62.10
20-Mar-09 60.30
27-Mar-09 61.39
Monthly NEWC Coal Index
Dec-2008 78.18
Jan-2009 82.69
Feb-2009 75.03
Mar-2009 61.37
Business Insider Oil Price Spike Coming...Oil Price Spike Coming
Posted Mar 27, 2009 01:15pm EDT by Jay Yarow in Investing, Commodities, RecessionRelated: OIH, XLE, XOM, CVX, BP
From The Business Insider, March 27, 2009:
Another group is warning that we are on a crash course towards oil shortages in the near future.
Today, it's a report by Cambridge Energy Research Associates (via NYT), that said the drop in oil investment and production will cause a “powerful and long-lasting aftershock following the oil price collapse.”
When demand picks up again, there won't be oil in place to support the expansion of the economy and we'll probably see another spike in oil prices.
It's just another alarm bell ringing on oil. The IEA warned in February that a lack of oil exploration would lead to a big spike in price once the economy gets going again. We said it again in March. Then Barclay's using a technical trend analysis said oil would definitely hit $57 soon, and would probably go to $60. And, of course, T. Boone Pickens clangs the bell every opportunity he gets.
Earlier this week McKinsey released 150 page PDF detailing why oil would run right back to $150 unless we changed a few things. Mckinsey suggested that we implement government policies so we can reduce the demand for oil, as it will be more difficult to control supply than demand.
Some of their suggestions:
* In light vehicles we can apply more stringent efficiency standards which would cut oil demand by 2 million barrels a day.
* Increase building and industrial efficiency could save 6 million barrels a day.
* Remove trade barriers to sugar-cane ethanol, could abate oil-demand. Along with that require all autos to be fuel-flexible so they can take advantage of biofuels.
* Reverse the shift to diesel passenger vehicles will save .5 million barrels per day of diesel.
* Substituting boiler fuels, could abate 8 million barrels a day.
We are skeptical of any plan that calls for an increased reliance on biofuels. Maybe the government should consider subsidising oil production? We'd like to see the public reaction to that idea. As of right now, crude oil for May delivery is at $53.33 a barrel on the NYMEX.
LondonCommodity BHP Profit Forecast Raised 15% by UBS on Coal Price Forecast
BHP Billiton Ltd., the world's largest mining company, had its full-year profit estimate for next year increased 15 percent by UBS AG because of a predicted rise in coal prices.
Net income may be $8.7 billion in the 12 months ending June 30, 2010, up from an earlier estimate of $7.6 billion, UBS analysts led by Glyn Lawcock said in a report yesterday. Melbourne-based BHP reported profit of $15.4 billion last year.
Coking coal prices, settled at a higher-than-expected $129 a metric ton for this year, may rise to $135 a ton next year, up from a previous forecast of $115 a ton, Lawcock said. This year's settlement was a 57 percent decrease on last year's price.
"It is difficult to describe the settlement outcome as anything but a significant victory for mining companies," he said. "Despite severe recessionary conditions and considerable deflationary pressure, nominal coking coal prices have settled at the second-highest level ever recorded."
UBS also increased its 2010 profit estimate for Rio Tinto Group by 3 percent to $5.9 billion. London-based Rio reported annual profit of $3.7 billion last year. BHP may report profit of $10.2 billion this fiscal year, UBS said.
Source: Bloomberg
Net income may be $8.7 billion in the 12 months ending June 30, 2010, up from an earlier estimate of $7.6 billion, UBS analysts led by Glyn Lawcock said in a report yesterday. Melbourne-based BHP reported profit of $15.4 billion last year.
Coking coal prices, settled at a higher-than-expected $129 a metric ton for this year, may rise to $135 a ton next year, up from a previous forecast of $115 a ton, Lawcock said. This year's settlement was a 57 percent decrease on last year's price.
"It is difficult to describe the settlement outcome as anything but a significant victory for mining companies," he said. "Despite severe recessionary conditions and considerable deflationary pressure, nominal coking coal prices have settled at the second-highest level ever recorded."
UBS also increased its 2010 profit estimate for Rio Tinto Group by 3 percent to $5.9 billion. London-based Rio reported annual profit of $3.7 billion last year. BHP may report profit of $10.2 billion this fiscal year, UBS said.
Source: Bloomberg
LondonCommodity BHP Profit Forecast Raised 15% by UBS on Coal Price Forecast
BHP Billiton Ltd., the world's largest mining company, had its full-year profit estimate for next year increased 15 percent by UBS AG because of a predicted rise in coal prices.
Net income may be $8.7 billion in the 12 months ending June 30, 2010, up from an earlier estimate of $7.6 billion, UBS analysts led by Glyn Lawcock said in a report yesterday. Melbourne-based BHP reported profit of $15.4 billion last year.
Coking coal prices, settled at a higher-than-expected $129 a metric ton for this year, may rise to $135 a ton next year, up from a previous forecast of $115 a ton, Lawcock said. This year's settlement was a 57 percent decrease on last year's price.
"It is difficult to describe the settlement outcome as anything but a significant victory for mining companies," he said. "Despite severe recessionary conditions and considerable deflationary pressure, nominal coking coal prices have settled at the second-highest level ever recorded."
UBS also increased its 2010 profit estimate for Rio Tinto Group by 3 percent to $5.9 billion. London-based Rio reported annual profit of $3.7 billion last year. BHP may report profit of $10.2 billion this fiscal year, UBS said.
Source: Bloomberg
Net income may be $8.7 billion in the 12 months ending June 30, 2010, up from an earlier estimate of $7.6 billion, UBS analysts led by Glyn Lawcock said in a report yesterday. Melbourne-based BHP reported profit of $15.4 billion last year.
Coking coal prices, settled at a higher-than-expected $129 a metric ton for this year, may rise to $135 a ton next year, up from a previous forecast of $115 a ton, Lawcock said. This year's settlement was a 57 percent decrease on last year's price.
"It is difficult to describe the settlement outcome as anything but a significant victory for mining companies," he said. "Despite severe recessionary conditions and considerable deflationary pressure, nominal coking coal prices have settled at the second-highest level ever recorded."
UBS also increased its 2010 profit estimate for Rio Tinto Group by 3 percent to $5.9 billion. London-based Rio reported annual profit of $3.7 billion last year. BHP may report profit of $10.2 billion this fiscal year, UBS said.
Source: Bloomberg
Associated Press Investors cash in some gains from big rally
NEW YORK (AP) -- Caution reasserted itself on Wall Street, sending stocks down sharply but not enough to stop the market from notching its third straight weekly advance.Major indexes fell about 2 percent Friday, but most analysts agreed the pullback was a natural response to the market's powerful climb this month. Financial and technology stocks led the retreat, and energy shares fell along with the price of oil.
A dip in personal incomes and a slowdown in personal spending gave investors reason to cash in some of their winnings after the Dow Jones industrial average surged 21 percent over just 13 days. Analysts said the sentiment in the market was still more upbeat than it was a month ago, but the data were a reminder that the economy and the banking system remain troubled.
"There is still a definite caution in the air," said Doreen Mogavero, president of Mogavero, Lee & Co., a New York floor brokerage, adding that she's noted some hesitance among her clients. "I don't think people are completely invested yet."
Mogavero noted that the money that has gone into the market over the last few weeks has been "short-term" in nature, which leads her to believe that most people are not convinced that the economy will soon recover.
The market has been ratcheting up and down over the past week. Analysts weren't surprised by its retrenchments, including Friday's, because no one expects such a weak market to move consistently higher. And many analysts believe back-and-forth trading is actually a healthy way for stocks to recover, because it reflects a conservative rather than euphoric attitude among investors.
"I wouldn't read too much into a down Friday," said Sam Stovall, chief investment strategist, U.S. equity research at Standard & Poor's. "It's simply investors taking profits." more...
Business Standard-India Steel makers to negotiate lower coking coal rates
With the Japanese steel makers reported to have secured annual long-term coking coal contract for 2009-10 from BHP Billiton at about 60 per cent less than the last year's prices, the domestic consumers of coking coal expect to clinch a similar deal with their international suppliers within a couple of weeks.
Ennore Coke, a domestic manufacturer of metallurgical coke, is negotiating with global suppliers. "We are in talks with our international suppliers such as Rio Tinto and BHP Billiton to secure annual contract for semi-soft coking coal at $115 a tonne.
The spot prices of premium hard coking coal in the international market are currently in the range of $125-130 a tonne and semi-soft coking coal is priced at 20 per cent less than that of hard coking coal," Ganesan Natarajan, president and chief executive officer, Ennore Coke, told Business Standard.
At present, the coking coal requirement of Ennore Coke stands at 720,000 tonnes per annum. The company has reserves of about 0.4 million tonnes of low-ash coking coal imported from the US and it needs around 30,000 tonnes per month to meet its requirement for 2009-10.
Nippon Steel Corporation and JFE Steel Corporation are reported to have clinched the annual contract, beginning April 1, with BHP Billiton for hard coking coal at about $130 a tonne, which is about 60 per cent less than the price paid by the Asian steel makers in 2007-08.
The average price of coking coal in the international market jumped from $96 a tonne in 2007 to around $300 in 2008. Steel makers are now seeking lower prices owing to falling steel prices and lower demand for raw materials such as coking coal in the wake of the prevailing global downturn.
Last month, prices of coking coal in China were ruling around $130-150 per tonne. Australia-based Macquarie Group, a global provider of banking, financial and advisory services, has forecast a benchmark price of coking coal at $110 per tonne for 2009.
In the domestic market, the steel makers procuring coking coal from Bharat Coking Coal (BCCL), a subsidiary of Coal India (CIL), were yet to negotiate for lower prices. However, a breakthrough on this issue was expected within a couple of weeks.
When contacted by Business Standard, Tapas K Lahiry, chairman and managing director, BCCL, said, "The domestic steel makers are yet to approach us on coking coal prices for the next financial year. At present, BCCL is supplying washed coking coal at Rs 6,300 per tonne and raw thermal coal at about Rs 1,200 per tonne."
In 2007-08, BCCL had revised the price of washed coking coal from Rs 4,500 to Rs 6,300. According to industry estimates, BCCL meets about 20 per cent of the coking coal requirement of Steel Authority of India (SAIL).
Source: Business Standard- India
Ennore Coke, a domestic manufacturer of metallurgical coke, is negotiating with global suppliers. "We are in talks with our international suppliers such as Rio Tinto and BHP Billiton to secure annual contract for semi-soft coking coal at $115 a tonne.
The spot prices of premium hard coking coal in the international market are currently in the range of $125-130 a tonne and semi-soft coking coal is priced at 20 per cent less than that of hard coking coal," Ganesan Natarajan, president and chief executive officer, Ennore Coke, told Business Standard.
At present, the coking coal requirement of Ennore Coke stands at 720,000 tonnes per annum. The company has reserves of about 0.4 million tonnes of low-ash coking coal imported from the US and it needs around 30,000 tonnes per month to meet its requirement for 2009-10.
Nippon Steel Corporation and JFE Steel Corporation are reported to have clinched the annual contract, beginning April 1, with BHP Billiton for hard coking coal at about $130 a tonne, which is about 60 per cent less than the price paid by the Asian steel makers in 2007-08.
The average price of coking coal in the international market jumped from $96 a tonne in 2007 to around $300 in 2008. Steel makers are now seeking lower prices owing to falling steel prices and lower demand for raw materials such as coking coal in the wake of the prevailing global downturn.
Last month, prices of coking coal in China were ruling around $130-150 per tonne. Australia-based Macquarie Group, a global provider of banking, financial and advisory services, has forecast a benchmark price of coking coal at $110 per tonne for 2009.
In the domestic market, the steel makers procuring coking coal from Bharat Coking Coal (BCCL), a subsidiary of Coal India (CIL), were yet to negotiate for lower prices. However, a breakthrough on this issue was expected within a couple of weeks.
When contacted by Business Standard, Tapas K Lahiry, chairman and managing director, BCCL, said, "The domestic steel makers are yet to approach us on coking coal prices for the next financial year. At present, BCCL is supplying washed coking coal at Rs 6,300 per tonne and raw thermal coal at about Rs 1,200 per tonne."
In 2007-08, BCCL had revised the price of washed coking coal from Rs 4,500 to Rs 6,300. According to industry estimates, BCCL meets about 20 per cent of the coking coal requirement of Steel Authority of India (SAIL).
Source: Business Standard- India
Jumat, 27 Maret 2009
BTEL Pelopor Tarif Murah Siap Gebrak
Jakarta – PT Bakrie Telecom (BTEL) semakin mengukuhkan eksistensinya sebagai pemain di sektor telekomunikasi domestik. Izin nasional yang baru diperoleh untuk menjadi operator SLI dan SLJJ, akan langsung direalisasikan tahun ini.Januari, awal 2009 lalu, Bakrie Telecom resmi mengantongi ijin untuk beroperasi pada layanan SLJJ (Sambungan Langsung Jarak Jauh) dan SLI (Sambungan Langsung Internasional). Dengan izin tersebut, perseroan resmi menduduki posisi ketiga setelah Telkom dan Indosat, sebagai operator yang memiliki ijin SLI dan SLJJ.
Presiden Direktur BTEL Anindya Bakrie mengatakan, dengan investasi sebesar US$ 25 juta, perseroan menargetkan kedua layanan ini dapat mulai beroperasi paling lambat akhir tahun ini. ”SLI akan beroperasi bulan depan. Kalau SLJJ sekitar akhir tahun ini.
Sedangkan untuk menghadapi kedua pesaing utamanya, yaitu PT Telkom dan PT Indosat, perseroan memiliki strategi, yaitu menjadi provider dengan biaya paling murah. Langkah itu bahkan telah menjadi motto yang selama ini mendasari aktivitas perusahaan. ”Kami masih baru, jadi itu strategi kami,” paparnya.
Sampai 2010 mendatang, BTEL menargetkan 24,5 juta pelanggan, sedangkan untuk belanja modal mulai dari 2008-2010 dianggarkan US$ 600 juta. Belanja modal tersebut akan digunakan untuk memperkuat jaringan, infrastruktur, dan backbone.
Pemenuhan belanja modal tersebut dilakukan melalui penerbitan obligasi rupiah yang beberapa waktu lalu dilakukan, internal cash, pinjaman, dan equity. Sebelumnya, BTEL pun telah mencairkan fasilitas pinjaman sindikasi dari Credit Suisse sebesar US$ 130 juta dan fasilitas pembayaran vendor dari Huawei, Cina, sebesar US$ 70 juta. more...
Bloomberg Funcef May Buy Stakes in Pulp, Energy to Improve Performance
Funcef, Brazil’s third-biggest pension fund, is looking to buy stakes in petrochemicals, pulp and paper and infrastructure companies to beat a performance target by about 4 percentage points, the fund’s president said.
“We are cautiously increasing our investments in equities, in some sectors that have better prospects and won’t suffer too much with the crisis,” Guilherme Lacerda said in a Bloomberg Television interview in Sao Paulo. Surpassing the target “is not a dream.”
Funcef, the pension fund for workers at state-owned bank Caixa Economica Federal, has a target of at least 5.5 percentage points above the annual inflation rate, which was 5.9 percent in February. The fund, which manages the equivalent of 32 billion reais ($14.2 billion), returned 1.7 percent in 2008, he said.
The average return for Brazilian pension funds last year was down 1.6 percent, according to the Pension Fund Association.
Brazil’s Bovespa index fell 41 percent in 2008 as credit losses and write downs topped $1 trillion in the worst financial crisis since the Great Depression and the U.S., Japan and Europe fell into the first simultaneous recessions since World War II.
The pension fund has 1.5 billion reais to buy stakes in petrochemicals, pulp and paper and infrastructure companies through private equity funds, Lacerda said.
Funcef’s real estate portfolio outperformed last year, allowing the fund to close with a gain, Lacerda said. Funcef has 2.5 billion reais invested in real estate.
“Brazil is suffering with the crisis, but some equities are very attractive, compared to the returns it can give,” Lacerda said.
To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net
“We are cautiously increasing our investments in equities, in some sectors that have better prospects and won’t suffer too much with the crisis,” Guilherme Lacerda said in a Bloomberg Television interview in Sao Paulo. Surpassing the target “is not a dream.”
Funcef, the pension fund for workers at state-owned bank Caixa Economica Federal, has a target of at least 5.5 percentage points above the annual inflation rate, which was 5.9 percent in February. The fund, which manages the equivalent of 32 billion reais ($14.2 billion), returned 1.7 percent in 2008, he said.
The average return for Brazilian pension funds last year was down 1.6 percent, according to the Pension Fund Association.
Brazil’s Bovespa index fell 41 percent in 2008 as credit losses and write downs topped $1 trillion in the worst financial crisis since the Great Depression and the U.S., Japan and Europe fell into the first simultaneous recessions since World War II.
The pension fund has 1.5 billion reais to buy stakes in petrochemicals, pulp and paper and infrastructure companies through private equity funds, Lacerda said.
Funcef’s real estate portfolio outperformed last year, allowing the fund to close with a gain, Lacerda said. Funcef has 2.5 billion reais invested in real estate.
“Brazil is suffering with the crisis, but some equities are very attractive, compared to the returns it can give,” Lacerda said.
To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net
CNBC Friday Preview: Bulls Could Rule for a Couple More Days
Posted By: Patti DommTopics:Banking | Congress | Currencies | Stock Market | Investment Strategy
Sectors:Banks | Oil and Gas
Companies:Palm Inc | FedEx Corporation | Citigroup Inc
Bulls could rule Wall Street for another couple of days.
Stocks rallied broadly Thursday after the Treasury's 7-year note auction delivered much improved results after the disappointing 5-year auction Wednesday. Morgan Stanley interest rate strategists, in a note, said the positive results take the fear of a failed auction off the table. The concern of oversupply spooked the Treasury market Wednesday.
The Dow finished up 174, or 2.3 percent at 7924, but the standout was the Nasdaq, now positive for the year with a 0.63 percent gain. Fired up by tech, the index closed up 3.8 percent at 1587. The S&P 500 was up 18, or 2.3 percent, at 832. The S&P industrial sector was the best performer, up 5 percent, followed by tech, which rose 4 percent.
Traders say the stock market's recent rally has had its life extended by end-of-quarter window dressing, as big investors increase their exposure to stocks. Many think the buying interest could fade as March comes to a close. "Let's get the end of the first quarter out of the way. What I want to see is if there is a continued appetite for stocks," said Tim Smalls of Execution LLC. "What I'd love to see is some stability in the market and more buyers coming in. I don't have to see a big rally. I want to see more players involved." more...
UBS Time to get back into Plantations and Coal miners
We do believe it is time to get back into plantations and coal sectors.
Based on the attached chart, CPO has just formed a triangle breakout pattern, which potentially lead the CPO price to reach RM 2300 - 2400 per tonne.
UBS has just raised their coking and thermal coal forecasts. For 2009, coking coal is raised to US$ 129/t (previously US$ 85/t) and for 2010, at US$ 135/t from US$ 115/t. For 2011, forecast remains unchanged at US$ 160/t. As for thermal coal, 2009 forecast is revised to US$ 71/t from US$ 60/t, 2010 and 2011 remain unchanged at US$ 80/t and US$ 120/t respectively. We think UBS Indo has not incorporated these changes into their coverage universe, at least until yesterday (26 March).
Preferred picks for plantations: AALI and LSIP, for coal miners: ITMG and PTBA. UNSP and BUMI are only for those who have the nerves of steel.
Miners demonstrate pricing power
Indications that coking coal settlement at US$129/t for high quality Negotiations between BMA and Nippon Steel have concluded with an apparent capitulation by Nippon for US$129/t benchmark pricing for the 2009E contract, for high quality coking coals. We believe that this is modestly higher than consensus (c5%) and is significantly higher than UBS estimates of US$85/t. More importantly, expectations had been falling and we believe that investors had taken a more pessimistic view of prospects.
Roll-over to be honoured, but there is likely to be a fight
We understand that Nippon has agreed to honour roll-over tonnages at the previously settled price of US$300/t; although its roll-over tonnage is quite small. Other steel mills with higher roll-over tonnages are likely to put up a fight in our view given the obvious pressure on margins being experienced.
Steel producers appear helpless… strong read-through for 2010?
Given the deflationary pressure impacting steel producers, with the worst operating
conditions in decades, we view the apparent result as impressive. We believe that the line has been drawn and that as conditions ‘normalise’ prices are likely to rise,
we are raising our 2010 forecast for coking coal to US$135/t from US$115/t.
Upside to other commodities?
We believe that demand conditions are likely to remain challenging in 2009, nevertheless we note that it appears that thermal coal has been settled at a decent price (cUS$71/t), and support is appearing for industrial metals. We remain neutral on industrial materials. Preferred equities include CONSOL, Rio Tinto and Xstrata.
Based on the attached chart, CPO has just formed a triangle breakout pattern, which potentially lead the CPO price to reach RM 2300 - 2400 per tonne.
UBS has just raised their coking and thermal coal forecasts. For 2009, coking coal is raised to US$ 129/t (previously US$ 85/t) and for 2010, at US$ 135/t from US$ 115/t. For 2011, forecast remains unchanged at US$ 160/t. As for thermal coal, 2009 forecast is revised to US$ 71/t from US$ 60/t, 2010 and 2011 remain unchanged at US$ 80/t and US$ 120/t respectively. We think UBS Indo has not incorporated these changes into their coverage universe, at least until yesterday (26 March).
Preferred picks for plantations: AALI and LSIP, for coal miners: ITMG and PTBA. UNSP and BUMI are only for those who have the nerves of steel.
Miners demonstrate pricing power
Indications that coking coal settlement at US$129/t for high quality Negotiations between BMA and Nippon Steel have concluded with an apparent capitulation by Nippon for US$129/t benchmark pricing for the 2009E contract, for high quality coking coals. We believe that this is modestly higher than consensus (c5%) and is significantly higher than UBS estimates of US$85/t. More importantly, expectations had been falling and we believe that investors had taken a more pessimistic view of prospects.
Roll-over to be honoured, but there is likely to be a fight
We understand that Nippon has agreed to honour roll-over tonnages at the previously settled price of US$300/t; although its roll-over tonnage is quite small. Other steel mills with higher roll-over tonnages are likely to put up a fight in our view given the obvious pressure on margins being experienced.
Steel producers appear helpless… strong read-through for 2010?
Given the deflationary pressure impacting steel producers, with the worst operating
conditions in decades, we view the apparent result as impressive. We believe that the line has been drawn and that as conditions ‘normalise’ prices are likely to rise,
we are raising our 2010 forecast for coking coal to US$135/t from US$115/t.
Upside to other commodities?
We believe that demand conditions are likely to remain challenging in 2009, nevertheless we note that it appears that thermal coal has been settled at a decent price (cUS$71/t), and support is appearing for industrial metals. We remain neutral on industrial materials. Preferred equities include CONSOL, Rio Tinto and Xstrata.
Bloomberg Ciputra Property May Have Doubled Profit in 2008 as Sales Rise
Ciputra Property May Have Doubled Profit in 2008 as Sales Rise 2009-03-25 11:29:41.824 GMTBy Berni Moestafa
March 25 (Bloomberg) -- PT Ciputra Property, a unit of Indonesia's third-biggest property developer, likely doubled its profit last year on increased revenue from its hotels and malls, a company official said.
Ciputra Property met its 2008 profit target of 184 billion rupiah ($16 million), said Christy Grassela, investor relations and finance manager at the company. The company had a profit of 91 billion rupiah in 2007, according to Bloomberg data. Rent
income from hotels and malls contributed most of last year's revenue growth, Grassela said by phone in Jakarta today.
Jakarta-based Ciputra Property will announce its 2008 earnings on March 31, Grassela said. The stock advanced 19 percent to 162 rupiah today, the steepest increase since Nov. 3. The Jakarta Composite index fell 1.1 percent. The company is a unit of PT Ciputra Development.
For Related News and Information:
Ciputra Property's shareholders: CTRP IJ
Stock index one-year price graph: JCI
Stories on Indonesia's stock market: TNI INDO STK BN
Stories on Asia's stock market: TNI ASIA STK BN
Search for Indonesia stories: NSE Indonesia
--Editor: Ang Bee Lin.
Citigroup - The 51st state of the USA: The state of denial
While this might seem a ridiculous comment we honestly still think that people do not get the seriousness of this “economic de-leveraging” taking place.
People still seem focused on the idea that this is just a financial de-leverage of the last 5 or 6 years of financial excess while we believe it is an economic de-leverage of the last 25 to 30 years worth of excess.
It really is the “end of the World as we know it”.
That does not mean it is the end of the World but rather the end of what we have seen as the “normal” World of the past 25 to 30 years. The U.S. and to a certain extent the Global economy has been operating like a leveraged hedge fund.
In the U.S. that has taken the form of U.S. consumers (Who make up over 70% of the U.S. economy) supplementing relatively stagnant real incomes (especially in the middle class area) with asset market appreciation (Property and equity markets) and ever cheaper and easier credit (this reached its crescendo in 2003) to maintain a lifestyle and a belief of wealth creation that would have otherwise not been possible.
As a consequence not only is the lifestyle and wealth creation likely to be unsustainable going forward but if you believe, as we do, that we have been operating in a “leveraged” economy then the new normal in terms of economic data, profitability of companies etc. may be a shadow of the past.
People still seem focused on the idea that this is just a financial de-leverage of the last 5 or 6 years of financial excess while we believe it is an economic de-leverage of the last 25 to 30 years worth of excess.
It really is the “end of the World as we know it”.
That does not mean it is the end of the World but rather the end of what we have seen as the “normal” World of the past 25 to 30 years. The U.S. and to a certain extent the Global economy has been operating like a leveraged hedge fund.
In the U.S. that has taken the form of U.S. consumers (Who make up over 70% of the U.S. economy) supplementing relatively stagnant real incomes (especially in the middle class area) with asset market appreciation (Property and equity markets) and ever cheaper and easier credit (this reached its crescendo in 2003) to maintain a lifestyle and a belief of wealth creation that would have otherwise not been possible.
As a consequence not only is the lifestyle and wealth creation likely to be unsustainable going forward but if you believe, as we do, that we have been operating in a “leveraged” economy then the new normal in terms of economic data, profitability of companies etc. may be a shadow of the past.
Nomura – HKD: Reasons why we expect the peg to stay
Another area of focus in Asia is the USD/HKD peg following spot trading at 7.7498 on 25 March – below the strong side convertibility undertaking rate of 7.750. We think this is a one-off and expect no near-term change in the peg for the following reasons:
1. The recent strength is related to large inflows from a rights issue as well as broad USD weakness. We expect the former to be temporary.
2. We do not see this move in spot as a sign of HKMA testing the market reaction to a possible change in regime. Spot has previously tested below 7.750 on a few occasions (in November and December 2008).
3. In November and December 2008, the HKMA intervened significantly by injecting HKD into the money market. An extreme example is in September 2003 (although there was no strong side convertibility rate) when spot fell to a low of 7.71 before massive HKMA intervention. The HKMA had unofficially kept spot in the 7.79-7.80 range from August 2000 to September 2003.
Given the magnitude of recent intervention to support spot USD/HKD (total HK$32.5bn injection since 20 March), it is clear that the authorities want to maintain the USD/HKD peg and convertibility undertaking rates. However, these large injections may lead to lower HKD rates and forward rates.
4. Aside from the HKMA’s action in the market, we also do not consider this a good time to make such a profound change in monetary regime. The weakness in the global economy and volatility in financial markets would likely lead investors to demand a risk premium on HKD if there were a change in policy.
5. We see the current situation of a weaker HKD and zero interest rates as supportive of the economy.
6. The alternatives also look limited with the consensus expectation of HKD pegging against the CNY still an event for the coming years rather than in the coming months given the limited CNY convertibility.
7. Beyond CNY convertibility, we think it will be sensible for HKD to peg to the CNY only if China’s financial institutions are strengthened and China’s management of monetary policy becomes effective and prudent.
8. There may also be limited scope for a near-term change as the instigators of the USD/HKD peg are still some of the front-line decision makers. Until there is a change in leadership, the USD/HKD peg is likely to still be viewed as the best policy.
1. The recent strength is related to large inflows from a rights issue as well as broad USD weakness. We expect the former to be temporary.
2. We do not see this move in spot as a sign of HKMA testing the market reaction to a possible change in regime. Spot has previously tested below 7.750 on a few occasions (in November and December 2008).
3. In November and December 2008, the HKMA intervened significantly by injecting HKD into the money market. An extreme example is in September 2003 (although there was no strong side convertibility rate) when spot fell to a low of 7.71 before massive HKMA intervention. The HKMA had unofficially kept spot in the 7.79-7.80 range from August 2000 to September 2003.
Given the magnitude of recent intervention to support spot USD/HKD (total HK$32.5bn injection since 20 March), it is clear that the authorities want to maintain the USD/HKD peg and convertibility undertaking rates. However, these large injections may lead to lower HKD rates and forward rates.
4. Aside from the HKMA’s action in the market, we also do not consider this a good time to make such a profound change in monetary regime. The weakness in the global economy and volatility in financial markets would likely lead investors to demand a risk premium on HKD if there were a change in policy.
5. We see the current situation of a weaker HKD and zero interest rates as supportive of the economy.
6. The alternatives also look limited with the consensus expectation of HKD pegging against the CNY still an event for the coming years rather than in the coming months given the limited CNY convertibility.
7. Beyond CNY convertibility, we think it will be sensible for HKD to peg to the CNY only if China’s financial institutions are strengthened and China’s management of monetary policy becomes effective and prudent.
8. There may also be limited scope for a near-term change as the instigators of the USD/HKD peg are still some of the front-line decision makers. Until there is a change in leadership, the USD/HKD peg is likely to still be viewed as the best policy.
Danareksa Semen Gresik (SMGR) Replacement Cost Attracts
Replacement Cost Attracts
Improving cost efficiency
As FY09 will be a more challenging year, Semen Gresik will make greater efforts to improve production efficiency. To achieve this goal, Semen Gresik will improve energy usage; use more local content materials rather than pricy imports (to mitigate the impact of the weaker rupiah); and reduce the number of plant shutdowns.
Progress is being made on the expansion front
Semen Gresik shall boost production capacity by 2 x 2.5mn tonnes and build a new 2 x 35MW coal fired power generator. The procurement and construction stages are the largest elements of the project, representing about 60-70% of the total process. Yet as the expansion is still in its early stages, it will be some time until the project is completed.
Excellent FY08 results
FY08 was an excellent year for cement producers. Domestic demand was very strong. This gave room to cement producers to raise selling prices on the domestic market. In regard to the sales mix, it was skewed to the more lucrative domestic market. This gave cement producers higher average selling prices. And despite the concerns over higher production costs (stemming from higher energy prices), they were offset by the higher selling prices as cement producers passed on the higher costs to their customers. In such a favorable business climate, Semen Gresik showed better performance and improved its margins.
Reiterate BUY
We maintain our BUY recommendation on the counter given its low EV/tonne valuation. Moreover, the weak rupiah means that the counter is even more attractive since most of the investment costs are foreign currency linked. At the current share price, the EV/tonne of Semen Gresik is only US$94, or far below the replacement cost of around US$150. Our target price of Rp4,100 reflects EV/tonne of US$115 (with a YE09 exchange rate of Rp10,684/USD), or still considerably below the replacement cost.
Improving cost efficiency
As FY09 will be a more challenging year, Semen Gresik will make greater efforts to improve production efficiency. To achieve this goal, Semen Gresik will improve energy usage; use more local content materials rather than pricy imports (to mitigate the impact of the weaker rupiah); and reduce the number of plant shutdowns.
Progress is being made on the expansion front
Semen Gresik shall boost production capacity by 2 x 2.5mn tonnes and build a new 2 x 35MW coal fired power generator. The procurement and construction stages are the largest elements of the project, representing about 60-70% of the total process. Yet as the expansion is still in its early stages, it will be some time until the project is completed.
Excellent FY08 results
FY08 was an excellent year for cement producers. Domestic demand was very strong. This gave room to cement producers to raise selling prices on the domestic market. In regard to the sales mix, it was skewed to the more lucrative domestic market. This gave cement producers higher average selling prices. And despite the concerns over higher production costs (stemming from higher energy prices), they were offset by the higher selling prices as cement producers passed on the higher costs to their customers. In such a favorable business climate, Semen Gresik showed better performance and improved its margins.
Reiterate BUY
We maintain our BUY recommendation on the counter given its low EV/tonne valuation. Moreover, the weak rupiah means that the counter is even more attractive since most of the investment costs are foreign currency linked. At the current share price, the EV/tonne of Semen Gresik is only US$94, or far below the replacement cost of around US$150. Our target price of Rp4,100 reflects EV/tonne of US$115 (with a YE09 exchange rate of Rp10,684/USD), or still considerably below the replacement cost.
CIMB Jasa Marga Result note - One solid year
Jasa Marga
Result note - One solid year - by Liliana Bambang
(JSMR IJ / JSMR.JK, OUTPERFORM - Maintained, Rp930 - Tgt. Rp1,100, Transport Infrastructure)
Jasa Marga booked net earnings of Rp707bn, up by 154.6% yoy, above ours and consensus. Reasons for above are (1) lower than expected tax rate of 24% versus our estimate of 30% and (2) higher than expected interest income as the company's capex disbursement is slower than expected. The company's net gearing improved to 36% in CY08 from 39% in CY07. Going forward, we expect net gearing to increase to 65% on the back of toll road acquisitions and toll road constructions. To account for a more robust cash position in CY08, we increase earnings estimate by 5-7% and increase our target price to Rp1,100 from Rp1,090, based on DCF valuation. Maintain Outperform.
Result note - One solid year - by Liliana Bambang
(JSMR IJ / JSMR.JK, OUTPERFORM - Maintained, Rp930 - Tgt. Rp1,100, Transport Infrastructure)
Jasa Marga booked net earnings of Rp707bn, up by 154.6% yoy, above ours and consensus. Reasons for above are (1) lower than expected tax rate of 24% versus our estimate of 30% and (2) higher than expected interest income as the company's capex disbursement is slower than expected. The company's net gearing improved to 36% in CY08 from 39% in CY07. Going forward, we expect net gearing to increase to 65% on the back of toll road acquisitions and toll road constructions. To account for a more robust cash position in CY08, we increase earnings estimate by 5-7% and increase our target price to Rp1,100 from Rp1,090, based on DCF valuation. Maintain Outperform.
CIMB Indofood Sukses Makmur Result note - Eyes on balance sheet
Indofood Sukses Makmur
Result note - Eyes on balance sheet - by Erwan Teguh
(INDF IJ / INDF.JK, UNDERPERFORM - Maintained, Rp960 - Tgt. Rp910, Consumer)
Indofood reported net profit of Rp1,034bn, +5.5% YoY on 39% increase in sales, which was 14% ahead of our estimate but way below consensus. This was largely due to higher revenue from edible oil and lower tax rate, partly due to reported loss in 4Q08, 1st in over 13 quarters. Of concern is high gearing of which debt rose to Rp18.6tr, +17% QoQ, +50% YoY, some 50% short term in nature. The main challenge remains reducing gearing while not exerting too much pressure on P&L. We cut earnings by 2-6%, trimmed target price to Rp910 from Rp925, which is SOP based. Maintain Underperform.
Result note - Eyes on balance sheet - by Erwan Teguh
(INDF IJ / INDF.JK, UNDERPERFORM - Maintained, Rp960 - Tgt. Rp910, Consumer)
Indofood reported net profit of Rp1,034bn, +5.5% YoY on 39% increase in sales, which was 14% ahead of our estimate but way below consensus. This was largely due to higher revenue from edible oil and lower tax rate, partly due to reported loss in 4Q08, 1st in over 13 quarters. Of concern is high gearing of which debt rose to Rp18.6tr, +17% QoQ, +50% YoY, some 50% short term in nature. The main challenge remains reducing gearing while not exerting too much pressure on P&L. We cut earnings by 2-6%, trimmed target price to Rp910 from Rp925, which is SOP based. Maintain Underperform.
Credit Suisse Global market pulp producer stocks fell in February to 47 days of supply
February 2009 - demand still weak but inventory drops
Global market pulp producer stocks fell in February to 47 days of supply (measured as end-of-month inventory / 3-months rolling average shipments), down three days from January. We estimate the three day drop in inventory translates to an absolute inventory decline of about 13,000 tonnes, bringing global inventory down to about 4.9 million tonnes, still a very lofty level.
The drop in inventory is explained by a moderate sequential rise in pulp shipments (+4%) coupled with aggressive downtime at mills across all producing regions. On our estimates global capacity utilization operated at 84% in February and shipments to capacity was around 88%. Compared with February 2008 deliveries fell 10.2%.
European consumer inventory plunged 73,000 tonnes in February to 856,000 tonnes, 198,000 tonnes below February 2008 and the lowest level we have on record. In days of consumption European consumer inventory remained at 23 days of consumption, 7 days below the 30 day 10-year average.
We believe NBSK markets may have bottomed supported by lower inventory and increased demand from Asia. Considering greater excess supply and higher inventory we believe downward pressures will continue for hardwood pulp.
Global market pulp producer stocks fell in February to 47 days of supply (measured as end-of-month inventory / 3-months rolling average shipments), down three days from January. We estimate the three day drop in inventory translates to an absolute inventory decline of about 13,000 tonnes, bringing global inventory down to about 4.9 million tonnes, still a very lofty level.
The drop in inventory is explained by a moderate sequential rise in pulp shipments (+4%) coupled with aggressive downtime at mills across all producing regions. On our estimates global capacity utilization operated at 84% in February and shipments to capacity was around 88%. Compared with February 2008 deliveries fell 10.2%.
European consumer inventory plunged 73,000 tonnes in February to 856,000 tonnes, 198,000 tonnes below February 2008 and the lowest level we have on record. In days of consumption European consumer inventory remained at 23 days of consumption, 7 days below the 30 day 10-year average.
We believe NBSK markets may have bottomed supported by lower inventory and increased demand from Asia. Considering greater excess supply and higher inventory we believe downward pressures will continue for hardwood pulp.
More Bullish on Commodity [Personal Opinion ]
Our Focus still on commodity sector. We more bullish on this sector. We bet that coal start up after april, demand energy power will growth in line with global economic recorvery. Oil price start on bullish track and coal will follow. Cpo price continue on upward trend. Demand still strong and production decrease on the other hand stock cpo down sharply. Rubber price start up following oil price. We believe commodity stock will give you more than double return at the end of h209. Our top pick ptba, itmg, adro, aali, sgro, lsip. We bet on bakrie group like bumi, unsp and elty for potensial unbelieveable return for longterm investment. Investment is your choice. [Personal Opinion ]
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DISCLAIMER: This report is issued by [BRIGHT INFO]. Although the contents of this document may represent the opinion of [BRIGHT INFO]. We cannot guarantee its accuracy and completeness.
CLSA Indosat upgrade, easing pressure
Our analyst Wilianto upgrades Indosat (ISAT IJ) from Underperform to Outperform. The new TP is Rp5,300 (from Rp4,500).
Due to the crisis, the mobile industry is consolidating and financing is much harder to get. Even the no 3 operator Excelcomindo (EXCL IJ) has its capex capability constrained. Tariff is also stabilizing. The mobile industry here is moving towards a duopoly structure, with Telkom and Indosat being the main players.
ISAT is also attractive because the stock is underowned, thanks to QTel tender offer last month. In term of valuation (PER), although ISAT is trading at premium to TLKM (ISAT is a purer mobile player, should help to explain premium over TLKM), it is still not expensive compared to regional peers. Expectation is also low. And if we are right about the duopoly structure emerging, tariff/ARPU stabilization will translate into much higher profitability for ISAT as the company has high operating leverage.
Key points from the report:
· Upgrade to OPF (from UPF): improving outlook + favorable valuation after 16% share price correction post tender offer last month.
· No change in our earnings forecast.
· Easing competition pressure + end of price war potentially boost ISAT’s earnings and cash flow due to high operating leverage.
· The expected industry consolidation and lack of capex capability by #3 Excelcomindo and some smaller operators mean market will return closer to duopoly structure.
· Debt and capex capability: Net debt to EBITDA still manageable at 1.7x v.s. 3.5x of EXCL. Bond holders have agreed to raise debt covenant from 1.7x debt/equity to 2.5x. Still room for capex.
· Target price raised from Rp4,500 to Rp5,300 implying target valuation of 15x PER 09CL.
· Our 2009CL earnings forecast is based on reasonably conservative assumption with net add expectation of only 6m (half of last year), 11% decline in Arpu, and lower margins.
Due to the crisis, the mobile industry is consolidating and financing is much harder to get. Even the no 3 operator Excelcomindo (EXCL IJ) has its capex capability constrained. Tariff is also stabilizing. The mobile industry here is moving towards a duopoly structure, with Telkom and Indosat being the main players.
ISAT is also attractive because the stock is underowned, thanks to QTel tender offer last month. In term of valuation (PER), although ISAT is trading at premium to TLKM (ISAT is a purer mobile player, should help to explain premium over TLKM), it is still not expensive compared to regional peers. Expectation is also low. And if we are right about the duopoly structure emerging, tariff/ARPU stabilization will translate into much higher profitability for ISAT as the company has high operating leverage.
Key points from the report:
· Upgrade to OPF (from UPF): improving outlook + favorable valuation after 16% share price correction post tender offer last month.
· No change in our earnings forecast.
· Easing competition pressure + end of price war potentially boost ISAT’s earnings and cash flow due to high operating leverage.
· The expected industry consolidation and lack of capex capability by #3 Excelcomindo and some smaller operators mean market will return closer to duopoly structure.
· Debt and capex capability: Net debt to EBITDA still manageable at 1.7x v.s. 3.5x of EXCL. Bond holders have agreed to raise debt covenant from 1.7x debt/equity to 2.5x. Still room for capex.
· Target price raised from Rp4,500 to Rp5,300 implying target valuation of 15x PER 09CL.
· Our 2009CL earnings forecast is based on reasonably conservative assumption with net add expectation of only 6m (half of last year), 11% decline in Arpu, and lower margins.
Holcim Indonesia
Significant revenues and earnings growthNet sales increased 28% to Rp 4.8 trillion in 2008 driven by buoyant domestic market conditions and successful marketing. Holcim Indonesia has gained considerably in independent market surveys on recognition, customer satisfaction and received a number of brand awards. Net profit improved 67% to Rp 282 billion reflecting superior profitability in operations and despite higher translation costs on foreign currency denominated debt, as the US Dollar appreciated strongly against the Rupiah and other regional currencies. National market share remained stable at over 14%.
Financial management
Holcim Indonesia has capitalized on a much improved operating performance, strong cash flow and effective balance sheet management. Early in 2008, shareholders approved the refinancing of existing foreign currency loan facilities, known as Tranche A. This transaction eliminated standing covenants, reduced financing costs and exposure to exchange rate fluctuations - through a conversion of US$60 million debt into a revolving Rupiah loan. Working capital has been tightly controlled, new acquisitions funded and debt repayments met, with a 25% increase in free cash to Rp 853 billion at the close of the year. The debt to equity ratio has improved and interest charges trimmed by 9%. Translation costs have increased in the wake of US Dollar appreciation against all regional currencies, however arrangements to further reduce exposure to US Dollar denominated debt are being currently assessed.
Adding value
Commenting upon the results, Tim Mackay, President Director noted, “This was a balanced performance and sets us on the right path for the challenges ahead. Innovative marketing and brand management helped drive top line sales growth. Behind the scenes, manufacturing and logistics operations made valuable production and efficiency gains. Such teamwork will be even more important to sustain us during the current year as local markets react to the global economic downturn.” He continued, “We made excellent progress in other directions; these included acquiring more production capacity, contributing to the debate on megacity urban planning and sustainable development, pursuing our passions for safety, people development and environmental management and maintaining our community care programmes.”
Behind top line growth, Holcim Indonesia responded to unprecedented coal and oil price increases in 2008 by completing a string of improvement projects. The Company generated energy savings, reduced fossil fuel use and achieved a lower clinker factor, a measure of efficiency, for the fifth successive year. A biomass alternative fuel programme gained formal accreditation under the UNFCCC Clean Development Mechanism in 2008. This is the largest of its kind worldwide under the CDM and the carbon credits generated will enhance future earnings. Biomass co-processed as fuel increased 32% by volume.
Strategic acquisitions
Enhancing reach across its primary market of Java, Holcim Indonesia completed two acquisitions during the year. Ownership of a new cement grinding mill at Ciwandan has shortened supply lines to West Java and South Sumatra providing additional capacity of 600,000 tonnes annually. Investment in a well-established ready-mixed concrete business and aggregates quarry in East Java, adds considerable momentum to progress in this market. Both entities, in combination with the plants at Narogong and Cilacap, represent ample capacity for medium term market development. In the current volatile and uncertain economic conditions, the decision was taken to freeze the Tuban expansion, having completed a full evaluation of the project, including environmental impact. Commented Mr. Mackay, “The project will not come back into consideration until we see the impact of the global financial crisis more clearly, but, in the meantime, our community relations activities in the area will continue.” more...
Crude palm oil futures hit 6 month high
March 27, 2009 2:30 GMT+8 Crude palm oil(CPO) futures prices on Bursa Malaysia Derivatives ended sharply higher yesterday, hitting its highest level in nearly six months on lower stocks and stronger crude oil prices, dealers said.“The market has rebounded after two consecutives days of losses as investors re-entered the market on improved sentiment,” a dealer said.
He said the firmer soyaoil prices had also helped boost buying interest in the local CPO market.
“Sentiment is positive and thus likely to sustain prices above the RM2,000 level in the near future,” the dealer added.
At close, the CPO futures for both April 2009 and May 2009 contracts surged RM68 each to settle at RM2,130 and RM2,070 per tonne respectively.
The contract month for June 2009 climbed RM63 to RM2,035 per tonne and July 2009 went up RM71 to RM2,019 per tonne.
A total turnover of 15,507 lots were transacted today, up from Wednesday’s 11,164 lots while open interests fell to 90,801 contracts from 91,579 contracts previously.
On the physical market, April South was traded higher at RM2,150 per tonne compared with RM2,110 per tonne on Wednesday.
Associated Press Crude closes above $54 for first time this year
NEW YORK (AP) -- Oil prices hit a new high for the year Thursday and retail gasoline rose above $2 per gallon for the first time since November as investors wagered that there would be a new run on crude stocks.Benchmark crude for May delivery rose $1.57 to settle at $54.34 a barrel on the New York Mercantile Exchange.
In London, Brent prices rose $1.71 to settle at $53.46 a barrel on the ICE Futures exchange.
Gas prices rose 2.3 cents a gallon overnight to a new national average of $2.009 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Pump prices are 10.9 cents higher than a month ago, but $1.252 lower than the same period last year.
Gas prices last hit $2 on Nov. 20.
Analysts have struggled to explain the recent surge in energy prices, especially as reports continue to pour out from the federal government showing that the U.S. economy is shrinking and its oil inventories are bloated with surplus crude. more...
Associated Press Dow hits 6-week high on relief over earnings
NEW YORK (AP) -- This time, it was the consumer who had Wall Street rallying.Better-than-expected earnings from big consumer brands Best Buy, ConAgra Foods Inc. and Dr Pepper Snapple Group Inc. sent the Dow Jones industrial average up 174 points Thursday to its highest level in six weeks. It has surged 21 percent since hitting a nearly 12-year low on March 9. And the technology-dominated Nasdaq composite index is now up 0.63 percent for 2009.
Strong demand for government debt at the Treasury Department's latest auction also lifted stocks by helping investors set aside recent nervousness about the government's ability to fund its economic stimulus and financial bailout programs.
Nearly every day over the past three weeks has seemed to bring morsels of good news -- first from the stricken banking sector and then in the form of stronger-than-expected economic data. But Thursday, solid reports from companies selling to the consumer came as a relief to investors anxious about first-quarter earnings, which start pouring in next month.
The advance technically put the Dow in bull market territory; a bull market is defined as a 20 percent rise from a low point. But analysts are still hesitant to call the end of the bear market -- there is a phenomenon known as a bear market rally that can quickly collapse in an uncertain economic environment. more...
Kamis, 26 Maret 2009
MegaCapital LSIP Valuasi yang Lebih Murah
FY2008 Result masih Sejalan dengan Ekspektasi
LSIP membukukan kenaikan pendapatan FY2008 sebesar 33% menjadi Rp. 3,84 trilliun. Kenaikan pendapatan lebih banyak ditopang oleh kenaikan harga jual CPO pada 2008 sementara volume penjualan hanya tumbuh 6,3% YoY. Volume penjualan karet LSIP pada 2008 mengalami penurunan 27% menjadi sebesar 22,8K ton. Kontribusi pendapatan dari ekspor CPO pada tahun 2008 naik menjadi 41,79% dari total penjualan CPO. Nilai ekspor CPO LSIP mengalami kenaikan 88,19% YoY. Melemahnya nilai tukar Rupiah terhadap
Dollar AS menyebabkan pendapatan dari ekspor CPO meningkat.
Biaya produksi naik 10% sejalan dengan naiknya penjualan. Kenaikan biaya produksi tersebut masih dibawah ekspektasi kami sebesar Rp. 2,51 triliun. LSIP membukukan kenaikan gross profit 2008 sebesar 71% menjadi sebesar Rp. 1,86 triliun dan kenaikan operating profit sebesar 33% menjadi sebesar Rp. 1,3 triliun. Sementara itu, laba bersih LSIP FY2008 mengalami kenaikan 64% YoY menjadi sebesar Rp. 927,5 miliar. Laba bersih FY2008 LSIP tersebut 6% lebih tinggi diatas proyeksi kami dan 2% lebih tinggi dari konsensus.
Valuasi
Dari analisis sensitifitas yang kami lakukan, setiap kenaikan harga CPO sebesar US$ 50/ MT terjadi perubahan EPS antara 6‐7,89%. Kami masih menggunakan asumsi harga jual rata‐rata CPO di tahun 2009 sebesar US$ 500/MT dan telah memasukan kontrak penjualan dimuka sebesar 12 ribu ton di tahun 2009 ke dalam perhitungan pendapatan.
Kami memperoleh proyeksi laba bersih LSIP ditahun 2009 sebesar Rp. 498,5 miliar turun
46,2% dari tahun 2008.
Kami masih mempertahankan rekomendasi HOLD terhadap LSIP dengan target harga 12 bulan sebesar Rp. 3500/lembar yang mencerminkan PE FY09 sebesar 9,54x . Kami belum
melihat adanya katalis positif baru terhadap saham LSIP. Dengan harga pada saat ini LSIP relatif lebih murah dibandingkan dengan AALI. Saat ini, LSIP diperdagangkan pada P/E FY09 sebesar 9,54x diskon 34% terhadap P/E FY09 AALI.
LSIP membukukan kenaikan pendapatan FY2008 sebesar 33% menjadi Rp. 3,84 trilliun. Kenaikan pendapatan lebih banyak ditopang oleh kenaikan harga jual CPO pada 2008 sementara volume penjualan hanya tumbuh 6,3% YoY. Volume penjualan karet LSIP pada 2008 mengalami penurunan 27% menjadi sebesar 22,8K ton. Kontribusi pendapatan dari ekspor CPO pada tahun 2008 naik menjadi 41,79% dari total penjualan CPO. Nilai ekspor CPO LSIP mengalami kenaikan 88,19% YoY. Melemahnya nilai tukar Rupiah terhadap
Dollar AS menyebabkan pendapatan dari ekspor CPO meningkat.
Biaya produksi naik 10% sejalan dengan naiknya penjualan. Kenaikan biaya produksi tersebut masih dibawah ekspektasi kami sebesar Rp. 2,51 triliun. LSIP membukukan kenaikan gross profit 2008 sebesar 71% menjadi sebesar Rp. 1,86 triliun dan kenaikan operating profit sebesar 33% menjadi sebesar Rp. 1,3 triliun. Sementara itu, laba bersih LSIP FY2008 mengalami kenaikan 64% YoY menjadi sebesar Rp. 927,5 miliar. Laba bersih FY2008 LSIP tersebut 6% lebih tinggi diatas proyeksi kami dan 2% lebih tinggi dari konsensus.
Valuasi
Dari analisis sensitifitas yang kami lakukan, setiap kenaikan harga CPO sebesar US$ 50/ MT terjadi perubahan EPS antara 6‐7,89%. Kami masih menggunakan asumsi harga jual rata‐rata CPO di tahun 2009 sebesar US$ 500/MT dan telah memasukan kontrak penjualan dimuka sebesar 12 ribu ton di tahun 2009 ke dalam perhitungan pendapatan.
Kami memperoleh proyeksi laba bersih LSIP ditahun 2009 sebesar Rp. 498,5 miliar turun
46,2% dari tahun 2008.
Kami masih mempertahankan rekomendasi HOLD terhadap LSIP dengan target harga 12 bulan sebesar Rp. 3500/lembar yang mencerminkan PE FY09 sebesar 9,54x . Kami belum
melihat adanya katalis positif baru terhadap saham LSIP. Dengan harga pada saat ini LSIP relatif lebih murah dibandingkan dengan AALI. Saat ini, LSIP diperdagangkan pada P/E FY09 sebesar 9,54x diskon 34% terhadap P/E FY09 AALI.
Reuters Fed's Lockhart: Better data does not signal recovery
PARIS (Reuters) - One month of improved data does not constitute an economic recovery and recession in the United States will last for at least a few more months, Atlanta Federal Reserve President Dennis Lockhart said on Thursday.
New orders for long-lasting U.S.-made goods rose in February for the first time in seven months and new home sales rebounded, government data showed on Wednesday.
"I would always caution that one month does not make a recovery so we have to be careful not to react too strongly to one month," Lockhart told Reuters on the sidelines of a food conference in Paris.
He said he had seen very few signs of a U.S. recovery.
"Most of the data that we follow appears to signal a continuing recession, at least a few more months," he said.
Asked whether the outlook had improved since the Fed's last policy meeting, he said: "I think it's premature to say that." more...
New orders for long-lasting U.S.-made goods rose in February for the first time in seven months and new home sales rebounded, government data showed on Wednesday.
"I would always caution that one month does not make a recovery so we have to be careful not to react too strongly to one month," Lockhart told Reuters on the sidelines of a food conference in Paris.
He said he had seen very few signs of a U.S. recovery.
"Most of the data that we follow appears to signal a continuing recession, at least a few more months," he said.
Asked whether the outlook had improved since the Fed's last policy meeting, he said: "I think it's premature to say that." more...
LondonCommodity Anglo American says coal prices have stabilized
Anglo American PLC may need to shut more coal mines in Australia if prices continue to fall, the head of its Anglo Coal Australia unit said on Tuesday, though the group thinks prices have now stabilised.
"Spot thermal coal prices have already come off significantly from their peak last year. We believe prices have stabilised at current levels," Seamus French, Chief Executive Officer of Anglo Coal Australia, told Reuters in an interview.
French said the firm was assessing the profitability of each of its mines every month and would not rule out closing more mines should coal prices head further south.
Earlier in March, Anglo said it was cutting more than 10 percent of its workforce at its coal mines in Australia and had mothballed its Aquila and Dawson North coking coal mines amid a sharp global slowdown in steel-making.
Anglo Coal hopes to double its annual production of coking and thermal coal in Australia to 56 million tonnes over the next 10 years, French said.
Source: Reuters
"Spot thermal coal prices have already come off significantly from their peak last year. We believe prices have stabilised at current levels," Seamus French, Chief Executive Officer of Anglo Coal Australia, told Reuters in an interview.
French said the firm was assessing the profitability of each of its mines every month and would not rule out closing more mines should coal prices head further south.
Earlier in March, Anglo said it was cutting more than 10 percent of its workforce at its coal mines in Australia and had mothballed its Aquila and Dawson North coking coal mines amid a sharp global slowdown in steel-making.
Anglo Coal hopes to double its annual production of coking and thermal coal in Australia to 56 million tonnes over the next 10 years, French said.
Source: Reuters
LondonCommodity PLN demand for coal to soar next year as power output rises
State electricity company PT PLN will need more coal next year as it seeks to generate more power through new plants operated by its subsidiary PT Indonesia Power, an official said Tuesday.
Indonesia Power president director Tony Agung said the increase - from 13 million tons of coal this year to 19 million next year - was due to the running of the three newly constructed geothermal power plants located at Labuan, Pelabuhan Ratu, and Suralaya, all in West Java, as part of PLN's 10,000-megawatt (MW) power program to meet the electricity demand in Java and Bali.
Tony said the company would continue boosting the utilization of the alternative energy. "It needs about 3 million tons of coal for every 1,000 MW of additional power capacity," he said on the sidelines of a seminar on national energy policy.
Besides the three plants, Indonesia Power, one of the largest electricity power generating companies in the country, operates five other power plants - at Tanjung Priok in Jakarta, at Kamojang and Saguling in West Java, Mrica and Semarang in Central Java, Perak in East Java, and Bali, with a total capacity of 8,888 MW.
Data from the Energy and Mineral Resources Ministry shows Indonesia has total reserves of coal of 104.7 million tons. The country's geothermal capacity is 27,510 MW, or about 40 percent of the world's geothermal capacity.
However, the great potential is nowhere near fully utilized domestically, while 70 percent of the country's coal is earmarked for export.
Young Entrepreneurs' Association (Hipmi) chairman Eric Aksa urged the government to speed up coal production for domestic use, saying it would help the private sector survive during the global economic crisis, because coal had "competitive advantages".
"The authorities should change their paradigm concerning the use of coal as a revenue booster. We should now treat it as a factor to boost the national economy," he said.
He added countries like China and India had taken the approach of prioritizing domestic demand.
Indonesia Power president director Tony Agung said the increase - from 13 million tons of coal this year to 19 million next year - was due to the running of the three newly constructed geothermal power plants located at Labuan, Pelabuhan Ratu, and Suralaya, all in West Java, as part of PLN's 10,000-megawatt (MW) power program to meet the electricity demand in Java and Bali.
Tony said the company would continue boosting the utilization of the alternative energy. "It needs about 3 million tons of coal for every 1,000 MW of additional power capacity," he said on the sidelines of a seminar on national energy policy.
Besides the three plants, Indonesia Power, one of the largest electricity power generating companies in the country, operates five other power plants - at Tanjung Priok in Jakarta, at Kamojang and Saguling in West Java, Mrica and Semarang in Central Java, Perak in East Java, and Bali, with a total capacity of 8,888 MW.
Data from the Energy and Mineral Resources Ministry shows Indonesia has total reserves of coal of 104.7 million tons. The country's geothermal capacity is 27,510 MW, or about 40 percent of the world's geothermal capacity.
However, the great potential is nowhere near fully utilized domestically, while 70 percent of the country's coal is earmarked for export.
Young Entrepreneurs' Association (Hipmi) chairman Eric Aksa urged the government to speed up coal production for domestic use, saying it would help the private sector survive during the global economic crisis, because coal had "competitive advantages".
"The authorities should change their paradigm concerning the use of coal as a revenue booster. We should now treat it as a factor to boost the national economy," he said.
He added countries like China and India had taken the approach of prioritizing domestic demand.
India’s Adani Wilmar to double palm oil imports by 2012
Adani Wilmar Ltd, India’s leading branded edible oils firm, is planning to double imports of palm oil products to about 100,000 tonnes a month by 2012, its managing director said on Wednesday.The imports would mostly go into the company’s newly launched brands including Raag Gold, targetted at rural segment, Pranav Adani, told reporters on the sidelines of a press conference to launch new edible oil brands.
“We are targetting the price conscious rural masses with branded refined palmolein. This will require us to import more palm oil,” Adani said.
The firm, a joint venture between Gujarat-based Adani Group and Wilmar International Ltd, currently imports less than 50,000 tonnes of crude palm oil a month.
It also imports crude soyoil and sunflower oil and crushes locally produced oilseeds like rapeseed and soybean, Adani said.
The rise in imports is in-line with the company’s plans to double its overall capacity to about 2.5 million tonnes a year at an estimated investment of 6.5 billion rupees.
“By this year end we plan to raise imports of palm products to about 60,000-65,000 tonnes,” Adani said.
The company has oilseed crushing units in Madhya Pradesh and Rajasthan.
Procuring soybean for its crushing units was difficult this year as prices remained high and many farmers continued to hold on to the produce for a longer span hoping for a better price, Adani said.
The higher oilseed prices and a fall in refined edible oil prices have put some pressure on the margins of the edible oil firms, Adani said.
Bloomberg China’s Zhou Says Economy Recovers on Decisive Action
March 26 (Bloomberg) -- People’s Bank of China Governor Zhou Xiaochuan said the world’s third-largest economy is recovering and contrasted his government’s “decisive” action with delays in other countries.
“Leading indicators are pointing to recovery of economic growth,” Zhou said in an article on the central bank’s Web site today. The government “has taken prompt, decisive and effective policy measures, demonstrating its superior system advantage when it comes to making vital policy decisions,” he said.
Zhou called this week for the creation of a new international reserve currency, signaling concern at the dollar’s weakness and China’s ambitions for a leadership role at next week’s Group of 20 summit. Finance Minister Xie Xuren urged world leaders today to step up economic stimulus to restore market confidence and to fend off trade protectionism.
“China has clearly been moving ahead of the rest of the G- 20 in terms of thought leadership and laying the groundwork for what will be discussed,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “China responded extremely quickly and with great vigor to the slowdown.”
China’s urban fixed-asset investment jumped 26.5 percent in the first two months from a year earlier, new lending quadrupled in February and vehicle sales rose 25 percent as the government implements a 4 trillion yuan ($585 billion) stimulus package. The Shanghai Composite Index has jumped 30 percent this year. more...
“Leading indicators are pointing to recovery of economic growth,” Zhou said in an article on the central bank’s Web site today. The government “has taken prompt, decisive and effective policy measures, demonstrating its superior system advantage when it comes to making vital policy decisions,” he said.
Zhou called this week for the creation of a new international reserve currency, signaling concern at the dollar’s weakness and China’s ambitions for a leadership role at next week’s Group of 20 summit. Finance Minister Xie Xuren urged world leaders today to step up economic stimulus to restore market confidence and to fend off trade protectionism.
“China has clearly been moving ahead of the rest of the G- 20 in terms of thought leadership and laying the groundwork for what will be discussed,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “China responded extremely quickly and with great vigor to the slowdown.”
China’s urban fixed-asset investment jumped 26.5 percent in the first two months from a year earlier, new lending quadrupled in February and vehicle sales rose 25 percent as the government implements a 4 trillion yuan ($585 billion) stimulus package. The Shanghai Composite Index has jumped 30 percent this year. more...
Bloomberg Holcim Indonesia Plans to Buy Affiliate Cement Maker in Asia
PT Holcim Indonesia, the country’s third-largest cement maker, said it plans to buy an affiliate in the region to support exports amid stagnating domestic sales.
The company, a unit of Switzerland-based Holcim Ltd., plans to “acquire a company within Holcim regional group,” it said in a statement in Investor Daily Indonesia newspaper. It didn’t give details.
Holcim Indonesia, the first Indonesian company to sell shares in 1977, joins larger rival PT Semen Gresik in considering acquisitions after asset values dropped. The cement maker had 853 billion rupiah ($71 million) in cash and cash equivalents at the end of 2008, its earnings report said.
The Indonesian unit said in a March 10 earnings statement that it postponed expansion at its Tuban plant because of the global financial crisis. The company last year bought a cement grinding mill at Ciwandan in West Java and a quarry in East Java, the statement said.
The Indonesia Cement Association in February estimated that sales of the building material will be little changed this year. Holcim, previously known as PT Semen Cibinong, had a 14 percent share in the country’s cement market, compared with Gresik’s 44 percent. Exports accounted for 12 percent of the company’s 4.8 trillion rupiah sales in 2008.
The company, a unit of Switzerland-based Holcim Ltd., plans to “acquire a company within Holcim regional group,” it said in a statement in Investor Daily Indonesia newspaper. It didn’t give details.
Holcim Indonesia, the first Indonesian company to sell shares in 1977, joins larger rival PT Semen Gresik in considering acquisitions after asset values dropped. The cement maker had 853 billion rupiah ($71 million) in cash and cash equivalents at the end of 2008, its earnings report said.
The Indonesian unit said in a March 10 earnings statement that it postponed expansion at its Tuban plant because of the global financial crisis. The company last year bought a cement grinding mill at Ciwandan in West Java and a quarry in East Java, the statement said.
The Indonesia Cement Association in February estimated that sales of the building material will be little changed this year. Holcim, previously known as PT Semen Cibinong, had a 14 percent share in the country’s cement market, compared with Gresik’s 44 percent. Exports accounted for 12 percent of the company’s 4.8 trillion rupiah sales in 2008.
JP Morgan - Enforcing our positive stance on MSCI China
Recent developments enforce our positive stance on MSCI China: Data show the improving trend of domestic demand continuing, with property, auto sales and consumer demand at strong levels with sequential improvement. FAI is holding up well, supported by the government stimuli. More infrastructure projects have started and more are in the immediate pipeline. March NBS-PMI may go above 50 for the first time since Jul-08, indicating that manufacturing is now in an expansion phase. Loan/credit expansion stayed robust. We expect this year’s total newly made loans to exceed Rmb7 trillion, or more than a 20%Y/Y loan growth. There are signs that China’s domestic demand recovery has started to positively effect economies such as Taiwan and Korea. Chinese officials have recently indicated that from March, exports demand have shown initial signs of stability.
We had pointed out three major risks to China’s economic recovery:
1. deflation expectation;
2. worsening of external demand/exports;
3. policy complacency.
It seems these risks have reduced somewhat recently. The Fed’s quantitative monetary easing has weakened the dollar and sent commodities/resources prices higher. Such developments should help to cut the risk of deflation expectation in China, which should further boost property sales and consumer spending. On policies, PM Wen and other senior Chinese officials recently indicated that they are worried about the risk of a continued global turmoil and worsening global outlook, and that Chinese authorities have “stored enough ammunition”. They promised that more policy stimulus, especially for consumption and housing demand, could be pushed out “at any time”.
Positives: We were encouraged by the continued, and sharpened focus on market-oriented reform by China. The latest gasoline/diesel price increase following the bounce in crude oil confirmed our view that the new “cost+margin” model for refined product prices will be strictly followed. We believe residential electricity prices would be raised to offset the impact of negative CPI, if authorities want to prevent deflation expectation. They made it clear that resource price reform would be speeded up to correct miss/under-pricing in energy/resources.
In our portfolio, we raise exposure to domestic consumption names and high beta/growth stocks, and cut weights in defensive stocks. We believe A-shares’ strong performance YTD is consistent with the above stated fundamentals.
We had pointed out three major risks to China’s economic recovery:
1. deflation expectation;
2. worsening of external demand/exports;
3. policy complacency.
It seems these risks have reduced somewhat recently. The Fed’s quantitative monetary easing has weakened the dollar and sent commodities/resources prices higher. Such developments should help to cut the risk of deflation expectation in China, which should further boost property sales and consumer spending. On policies, PM Wen and other senior Chinese officials recently indicated that they are worried about the risk of a continued global turmoil and worsening global outlook, and that Chinese authorities have “stored enough ammunition”. They promised that more policy stimulus, especially for consumption and housing demand, could be pushed out “at any time”.
Positives: We were encouraged by the continued, and sharpened focus on market-oriented reform by China. The latest gasoline/diesel price increase following the bounce in crude oil confirmed our view that the new “cost+margin” model for refined product prices will be strictly followed. We believe residential electricity prices would be raised to offset the impact of negative CPI, if authorities want to prevent deflation expectation. They made it clear that resource price reform would be speeded up to correct miss/under-pricing in energy/resources.
In our portfolio, we raise exposure to domestic consumption names and high beta/growth stocks, and cut weights in defensive stocks. We believe A-shares’ strong performance YTD is consistent with the above stated fundamentals.
Credit Suisse ITMG, What if coal price stays lower for longer?
PT Indo Tambangraya Megah (ITMG.JK, Rp9,800, O, TP Rp17,000) - What if coal price stays lower for longer?
Paworamon (Poom) Suvarnatemee, CFA / Research Analyst / 662 614 6210 / paworamon.suvarnatemee@credit-suisse.com
We have evaluated the downside risks to ITMG’s earnings and valuation, in case coal prices continue to stay low or fall even lower than the US$75/tonne price in FY10.
Risks to our FY09 forecast are low, as 70% of ITMG’s volumes have already been priced. Risks are higher in FY10, as the volumes are yet to be priced. We see 51% earnings downside from our forecast, if benchmark prices fall to US$75/tonne in FY10 (from the current assumption of US$100/tonne). At US$50/tonne benchmark, ITMG would be making loss, unless costs are cut by 10%.
We doubt that benchmark price would fall as low as US$50/tonne, given that major Indonesian players would lose money. Cash cost of Russian producers are also believed to be in the range of US$60/tonne.
We maintain our OUTPERFORM rating. Even with the flat coal price at around US$75/tonne in FY10, its P/E is still undemanding at 7x and free cash flow remains positive. We see its net cash position, and willingness to pay dividend, as a cushion to share price. Our forecast is revised down slightly, reflecting small change in price assumptions.
Paworamon (Poom) Suvarnatemee, CFA / Research Analyst / 662 614 6210 / paworamon.suvarnatemee@credit-suisse.com
We have evaluated the downside risks to ITMG’s earnings and valuation, in case coal prices continue to stay low or fall even lower than the US$75/tonne price in FY10.
Risks to our FY09 forecast are low, as 70% of ITMG’s volumes have already been priced. Risks are higher in FY10, as the volumes are yet to be priced. We see 51% earnings downside from our forecast, if benchmark prices fall to US$75/tonne in FY10 (from the current assumption of US$100/tonne). At US$50/tonne benchmark, ITMG would be making loss, unless costs are cut by 10%.
We doubt that benchmark price would fall as low as US$50/tonne, given that major Indonesian players would lose money. Cash cost of Russian producers are also believed to be in the range of US$60/tonne.
We maintain our OUTPERFORM rating. Even with the flat coal price at around US$75/tonne in FY10, its P/E is still undemanding at 7x and free cash flow remains positive. We see its net cash position, and willingness to pay dividend, as a cushion to share price. Our forecast is revised down slightly, reflecting small change in price assumptions.
Credit Suisse Indocement FY08 results were better than expected due to better pricing power
Indocement (INTP.JK, Rp4,275, O, TP Rp5,650) - FY08 results were better than expected due to better pricing power; net gearing only 2.5%
Arief Wana / Research Analyst / 62 21 2553 7977 / arief.wana@credit-suisse.com
Indocement's 2008 bottom line beat our forecasts by 15% due to better-than-expected pricing, especially in 4Q08, and its leveraged impact towards pricing. Net profit soared 77% YoY to Rp1.75 tn.
Despite a slowdown in demand (-7% YoY) and rising costs (+18% YoY), the 4Q08 margins still improved thanks to the strong increase in prices of 55% YoY although partly due to lower exports.
The energy-related costs still posted high YoY increase, but started to show a decline on a QoQ basis in line with the decline in oil prices both internationally and domestically. Should this trend continue, we foresee the possibility of a little ASP softening to keep margins unchanged. We maintain our forecasts at this moment.
The company's financial strength continued to improve in spite of booking a forex loss due to its unhedged USD-debt position of only around US$49 mn. Net gearing is only 2.5% and coverage is 34x, and coupled with an utilisation rate of 76%, Indocement's positive cash flow should be positive for its dividends upsides.
Our target price of Rp5,650 implies a 32% upside. We maintain our OUTPERFORM rating.
Arief Wana / Research Analyst / 62 21 2553 7977 / arief.wana@credit-suisse.com
Indocement's 2008 bottom line beat our forecasts by 15% due to better-than-expected pricing, especially in 4Q08, and its leveraged impact towards pricing. Net profit soared 77% YoY to Rp1.75 tn.
Despite a slowdown in demand (-7% YoY) and rising costs (+18% YoY), the 4Q08 margins still improved thanks to the strong increase in prices of 55% YoY although partly due to lower exports.
The energy-related costs still posted high YoY increase, but started to show a decline on a QoQ basis in line with the decline in oil prices both internationally and domestically. Should this trend continue, we foresee the possibility of a little ASP softening to keep margins unchanged. We maintain our forecasts at this moment.
The company's financial strength continued to improve in spite of booking a forex loss due to its unhedged USD-debt position of only around US$49 mn. Net gearing is only 2.5% and coverage is 34x, and coupled with an utilisation rate of 76%, Indocement's positive cash flow should be positive for its dividends upsides.
Our target price of Rp5,650 implies a 32% upside. We maintain our OUTPERFORM rating.
Bloomberg Crude Oil Rises on Indications U.S. Fuel Demand Slump May End
March 26 (Bloomberg) -- Crude oil rose on signs that fuel demand in the U.S., the world’s largest energy consumer, may be coming out of a slump.
U.S. fuel consumption rose 2.2 percent to 19.2 million barrels a day last week, and gasoline demand gained 1.6 percent to 9.1 million barrels a day, according to the Energy Department. U.S. durable goods orders increased 3.4 percent last month, a Commerce Department report showed yesterday.
“Sentiment in the oil market has improved considerably in recent weeks, with the rise above $50 confirmation a bottom has been found,” said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. “Durable goods data was better than expected, giving some hope about the future economy and a recovery of oil demand.”
Crude oil for May delivery gained as much as 97 cents, or 1.8 percent, to $53.74 a barrel on the New York Mercantile Exchange. It was at $53.66 a barrel at 11:41 a.m. London time.
Prices are up 20 percent this year on expectations that supply cuts by the Organization of Petroleum Exporting Countries would drain the crude glut created as the economic slump slashed demand. Monetary and fiscal policy to revive economic growth in the U.S. and other oil consumers may also add to demand.
Still, stockpiles in the U.S. continue to rise. Crude supplies rose 3.3 million barrels to 356.6 million last week, the Energy Department said yesterday. Inventories were forecast to increase by 1.1 million barrels, according to a Bloomberg News survey. Total daily fuel demand averaged over the past four weeks was 19.1 million barrels, down 3.2 percent from a year earlier. more...
U.S. fuel consumption rose 2.2 percent to 19.2 million barrels a day last week, and gasoline demand gained 1.6 percent to 9.1 million barrels a day, according to the Energy Department. U.S. durable goods orders increased 3.4 percent last month, a Commerce Department report showed yesterday.
“Sentiment in the oil market has improved considerably in recent weeks, with the rise above $50 confirmation a bottom has been found,” said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. “Durable goods data was better than expected, giving some hope about the future economy and a recovery of oil demand.”
Crude oil for May delivery gained as much as 97 cents, or 1.8 percent, to $53.74 a barrel on the New York Mercantile Exchange. It was at $53.66 a barrel at 11:41 a.m. London time.
Prices are up 20 percent this year on expectations that supply cuts by the Organization of Petroleum Exporting Countries would drain the crude glut created as the economic slump slashed demand. Monetary and fiscal policy to revive economic growth in the U.S. and other oil consumers may also add to demand.
Still, stockpiles in the U.S. continue to rise. Crude supplies rose 3.3 million barrels to 356.6 million last week, the Energy Department said yesterday. Inventories were forecast to increase by 1.1 million barrels, according to a Bloomberg News survey. Total daily fuel demand averaged over the past four weeks was 19.1 million barrels, down 3.2 percent from a year earlier. more...
KimEng Adaro Energy: Company visit
Adaro Energy: Company visit
We met with Cameron Tough, Head iof Investor Relation at Adaro Energy today.
Sales volume in FY08 is around 40m tons, of which 1.3m came from third party coal.
Adaro expects production in FY09 between 42-45m tons, compared to 38.5m tons in FY08.
The management remains optimistic that demand on its envirocoal in particular to remain strong in 2009. Sales price in FY09 is likely to come between US$52 and 65 per ton. Of FY09 production, about 75% has been contracted at pricing towards US$65 per ton. At present, the company is in negotiation for the remaining 25%. In FY08, average selling price was around US$40/ton.
A recent coal transaction between Japanese buyer and Xtrata was settled at price of US$70-72/ton.
Cash cost in FY09 is expected to be flat around US$30/ton, mostly due to increase in contractor cost. The company still has carry-over contract on oil from last year, hence current decline on oil price will not be fully enjoyed by the company. Increase in stripping ratio is expected to put pressure on cash cost as well.
Adaro indicates that FY08 revenue to come between Rp16-18t, while EBITDA is around US$400m or above consensus estimate.
For FY09, management expects EBITDA to come between US$700m and US$1b.
The company has withdrew Rp240b from investment in Recapital Asset Management recently. As of February 2009, Adaro still has around US$76m in Recapital.
FY08 result will be published on next Monday 30 March 2009
We met with Cameron Tough, Head iof Investor Relation at Adaro Energy today.
Sales volume in FY08 is around 40m tons, of which 1.3m came from third party coal.
Adaro expects production in FY09 between 42-45m tons, compared to 38.5m tons in FY08.
The management remains optimistic that demand on its envirocoal in particular to remain strong in 2009. Sales price in FY09 is likely to come between US$52 and 65 per ton. Of FY09 production, about 75% has been contracted at pricing towards US$65 per ton. At present, the company is in negotiation for the remaining 25%. In FY08, average selling price was around US$40/ton.
A recent coal transaction between Japanese buyer and Xtrata was settled at price of US$70-72/ton.
Cash cost in FY09 is expected to be flat around US$30/ton, mostly due to increase in contractor cost. The company still has carry-over contract on oil from last year, hence current decline on oil price will not be fully enjoyed by the company. Increase in stripping ratio is expected to put pressure on cash cost as well.
Adaro indicates that FY08 revenue to come between Rp16-18t, while EBITDA is around US$400m or above consensus estimate.
For FY09, management expects EBITDA to come between US$700m and US$1b.
The company has withdrew Rp240b from investment in Recapital Asset Management recently. As of February 2009, Adaro still has around US$76m in Recapital.
FY08 result will be published on next Monday 30 March 2009
JPM Indonesia Equity Strategy _ Currency + commodities = reviving domestic interest
Improving currency and commodities outlook reviving domestic interest:
We believe that lower currency risk along with an apparently improving commodities outlook (commodity funds saw their secondlargest monthly inflow in February) are bringing domestic investors back to Indonesian equities. Volumes traded by domestic brokers (about 70% of total volumes) have surged almost 50% in recent days. Domestic interest had thinned since October, and we flag this as positive for market volumes and demand for equities.
Our top three picks are PGAS, UNTR, and BRI: Improving domestic interest and the prospect of lower currency risk point to potential upside from Indonesian equities, especially if sentiment on commodities continues to improve. We recommend PGAS & UNTR, which we believe are low-risk ways to play recovering energy prices, with upside surprise possibilities on FY09E earnings. Our top pick among the banks is BRI, which we see outpacing industry loan growth. For investors looking for direct commodities exposure, our picks are ITMG and PTBA. Politics is a risk with elections around the corner, but recent surveys suggest a positive outcome favoring president SBY.
We believe that lower currency risk along with an apparently improving commodities outlook (commodity funds saw their secondlargest monthly inflow in February) are bringing domestic investors back to Indonesian equities. Volumes traded by domestic brokers (about 70% of total volumes) have surged almost 50% in recent days. Domestic interest had thinned since October, and we flag this as positive for market volumes and demand for equities.
Our top three picks are PGAS, UNTR, and BRI: Improving domestic interest and the prospect of lower currency risk point to potential upside from Indonesian equities, especially if sentiment on commodities continues to improve. We recommend PGAS & UNTR, which we believe are low-risk ways to play recovering energy prices, with upside surprise possibilities on FY09E earnings. Our top pick among the banks is BRI, which we see outpacing industry loan growth. For investors looking for direct commodities exposure, our picks are ITMG and PTBA. Politics is a risk with elections around the corner, but recent surveys suggest a positive outcome favoring president SBY.
CIMB Sampoerna Agro Narrowing Discount
Quick takes - Narrowing discount - by Liliana Bambang
(SGRO IJ / SGRO.JK, OUTPERFORM - Upgraded, Rp1,240 - Tgt. Rp1,400, Plantations)
The company's unaudited CY08 revenue is below ours and consensus, due to ASP at large discount to peers in 4Q08, coinciding with period of depressed export market. But that has changed with discounts narrowing to 2-5% in recent months. A less volatile CPO price should also support margins given its 50% exposure to plasma farmers. That and its net cash cash position are reasons we view its significant discounts in EV/Ha, at 63% and 28% to AALI and LSIP respectively, unwarranted. We upgrade our recommendation to OUTPERFORM from Trading Sell with unchanged target price of Rp1,400, based on 8x CY10 earnings.
(SGRO IJ / SGRO.JK, OUTPERFORM - Upgraded, Rp1,240 - Tgt. Rp1,400, Plantations)
The company's unaudited CY08 revenue is below ours and consensus, due to ASP at large discount to peers in 4Q08, coinciding with period of depressed export market. But that has changed with discounts narrowing to 2-5% in recent months. A less volatile CPO price should also support margins given its 50% exposure to plasma farmers. That and its net cash cash position are reasons we view its significant discounts in EV/Ha, at 63% and 28% to AALI and LSIP respectively, unwarranted. We upgrade our recommendation to OUTPERFORM from Trading Sell with unchanged target price of Rp1,400, based on 8x CY10 earnings.
CLSA Indocement (INTP IJ), change in the wind?
Nick Cashmore wrote a report on Indocement (INTP IJ). Financial difficulties by one of Heidelberger main shareholders mean higher dividends and corporate action should be expected. We raise our TP for INTP to Rp5,700 (from Rp4,100) and maintain our OPF call.
a great asset. It has a strong brand and distribution channels in greater Jakarta and West Java (cement is not pure commodity in Indonesia, brand loyalty is a very important factor). INTP had 54% market share in greater Jakarta and West Java, arguably amongst the most important market for cement in Indonesia. The company has total capacity of 17.1mn tonnes with 85% utilization, so there is still some spare capacity.
cautious outlook for cement demand in 2009, assuming a 10% decline in volume and 10% decline in prices. From datapoint standpoint, domestic cement sales volume in Feb 09 was down by 2.4% YoY in Feb09, bringing the year to date volume to 5.6m tonnes, down 3% YoY. But this is only a pause in an attractive long term story, in our view.
Key points from the report:
* banner 2008, expect moderation in 2009
* moderation is only a pause in an extremely attractive long term story.
* Balance sheet is defensive, will be in strong net cash position this year.
* room for higher dividend payments, although we have only currently assume 15% payout.
* Corporate action in the wind? Further upside if M&A angle crystallize.
* Valuation: at US$90 EV/tonne, the stock is trading at below replacement cost of around US$140/tonne. Stock is at 10x historical earnings and 15x our extremely cautious forecasts.
* raise our TP for INTP to Rp5,700 (from Rp4,100) and maintain our OPF call.
a great asset. It has a strong brand and distribution channels in greater Jakarta and West Java (cement is not pure commodity in Indonesia, brand loyalty is a very important factor). INTP had 54% market share in greater Jakarta and West Java, arguably amongst the most important market for cement in Indonesia. The company has total capacity of 17.1mn tonnes with 85% utilization, so there is still some spare capacity.
cautious outlook for cement demand in 2009, assuming a 10% decline in volume and 10% decline in prices. From datapoint standpoint, domestic cement sales volume in Feb 09 was down by 2.4% YoY in Feb09, bringing the year to date volume to 5.6m tonnes, down 3% YoY. But this is only a pause in an attractive long term story, in our view.
Key points from the report:
* banner 2008, expect moderation in 2009
* moderation is only a pause in an extremely attractive long term story.
* Balance sheet is defensive, will be in strong net cash position this year.
* room for higher dividend payments, although we have only currently assume 15% payout.
* Corporate action in the wind? Further upside if M&A angle crystallize.
* Valuation: at US$90 EV/tonne, the stock is trading at below replacement cost of around US$140/tonne. Stock is at 10x historical earnings and 15x our extremely cautious forecasts.
* raise our TP for INTP to Rp5,700 (from Rp4,100) and maintain our OPF call.
Associated Press Oil rises on positive US data, stock gains
Oil prices rose above $53 a barrel Thursday as encouraging U.S. data on durable goods orders and home sales spurred hopes for a recovery in crude demand.
Benchmark crude for May delivery was up 73 cents to $53.50 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange.
In London, Brent prices rose 96 cents to $52.71 a barrel on the ICE Futures exchange.
Gains in global stock markets also supported oil prices, and the uptick in sentiment appeared to be enough to temper concerns over sharply accumulating inventories in the U.S., although analysts warned this may not last.
"Without the continued support of equities, crude oil should have more difficulties to move above the $55-a-barrel mark as the fundamentals are not yet providing enough evidence of a tightening market," said Olivier Jakob of Petromatrix in Switzerland.
"We could see today the rally go slightly higher from here on yesterday's figures," said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore. "You have a little modest rally in Asia on the back of that, and that's sort of helping crude a bit."
In other Nymex trading, gasoline for April delivery gained 0.95 cent to $1.5045 a gallon, while heating oil rose 1.19 cents to $1.4766. Natural gas for April delivery advanced 0.7 cent to $4.336 per 1,000 cubic feet.
Associated Press writer Tomoko A. Hosaka in Tokyo contributed to this report. more...
Benchmark crude for May delivery was up 73 cents to $53.50 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange.
In London, Brent prices rose 96 cents to $52.71 a barrel on the ICE Futures exchange.
Gains in global stock markets also supported oil prices, and the uptick in sentiment appeared to be enough to temper concerns over sharply accumulating inventories in the U.S., although analysts warned this may not last.
"Without the continued support of equities, crude oil should have more difficulties to move above the $55-a-barrel mark as the fundamentals are not yet providing enough evidence of a tightening market," said Olivier Jakob of Petromatrix in Switzerland.
"We could see today the rally go slightly higher from here on yesterday's figures," said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore. "You have a little modest rally in Asia on the back of that, and that's sort of helping crude a bit."
In other Nymex trading, gasoline for April delivery gained 0.95 cent to $1.5045 a gallon, while heating oil rose 1.19 cents to $1.4766. Natural gas for April delivery advanced 0.7 cent to $4.336 per 1,000 cubic feet.
Associated Press writer Tomoko A. Hosaka in Tokyo contributed to this report. more...
Reuters European shares mixed; Wall Street set to gain
LONDON (AP) -- European markets lacked direction Thursday as investors waited for the open on Wall Street, where stocks are expected to rise ahead of readings on U.S. economic output and weekly unemployment claims.
By noon in mainland Europe, Britain's FTSE 100 was up 0.2 percent to 3,906.52, Germany's DAX rose 0.6 percent to 4,248.69, and France's CAC 40 slipped 0.1 percent to 2,889.47.
Asian markets gained, after Wednesday's better-than-forecast U.S. economic data on new homes sales and durable goods orders buoyed hopes that government stimulus measures are starting to heal the global economy.
Reports are due from the U.S. Thursday on gross domestic product for the final three months of 2008 and on the number of workers seeking unemployment benefits last week.
Ahead of the reports, Dow Jones industrial average futures climbed 1.1 percent to 7,759, Standard & Poor's 500 index futures rose 1.2 percent, and Nasdaq 100 index futures added 1.4 percent.
Hong Kong's market led Asia higher, with the Hang Seng vaulting 486.87 points, or 3.6 percent, to 14,108.98. Japan's Nikkei 225 stock average rose 156.34 points, or 1.8 percent, to 8,636.33, and South Korea's Kospi climbed 1.2 percent to 1,243.80.
Elsewhere, Shanghai's index jumped 3.1 percent, Australia's benchmark added 1 percent and Singapore's key stock measure advanced 4 percent. India's Sensex rose 3.5 percent to 10,003.10. more...
By noon in mainland Europe, Britain's FTSE 100 was up 0.2 percent to 3,906.52, Germany's DAX rose 0.6 percent to 4,248.69, and France's CAC 40 slipped 0.1 percent to 2,889.47.
Asian markets gained, after Wednesday's better-than-forecast U.S. economic data on new homes sales and durable goods orders buoyed hopes that government stimulus measures are starting to heal the global economy.
Reports are due from the U.S. Thursday on gross domestic product for the final three months of 2008 and on the number of workers seeking unemployment benefits last week.
Ahead of the reports, Dow Jones industrial average futures climbed 1.1 percent to 7,759, Standard & Poor's 500 index futures rose 1.2 percent, and Nasdaq 100 index futures added 1.4 percent.
Hong Kong's market led Asia higher, with the Hang Seng vaulting 486.87 points, or 3.6 percent, to 14,108.98. Japan's Nikkei 225 stock average rose 156.34 points, or 1.8 percent, to 8,636.33, and South Korea's Kospi climbed 1.2 percent to 1,243.80.
Elsewhere, Shanghai's index jumped 3.1 percent, Australia's benchmark added 1 percent and Singapore's key stock measure advanced 4 percent. India's Sensex rose 3.5 percent to 10,003.10. more...
ReutersWall St. rallies late as data offsets bond sale gloom
NEW YORK (Reuters) - Stocks rose in a late rally on Wednesday as unexpectedly strong housing and durable goods data fueled hopes the economy is finally on the mend, offsetting concerns the United States may struggle to fund plans to pull the economy out of recession.
Trading was volatile as poor demand in a U.S. Treasury auction poured cold water on an early rally sparked by the reassuring economic data. But by the end of the session much of that disappointment had worn off, traders said, as investors bet the economy was improving and stocks would continue rising from recent 12-year lows.
Homebuilder shares .DJUSHB rose 2.2 percent after new home sales rose at their fastest pace in 10 months in February, adding to recent data showing signs of hope in the battered housing sector. Consumer stocks also rose, with McDonald's Corp (MCD.N) gaining 2.9 percent.
Big manufacturers like Boeing Co (BA.N) advanced after U.S. orders for long-lasting manufactured goods unexpectedly rebounded in the same month.
"A lot of people want to think we've seen the bottom of the economic cycle," said Cleveland Rueckert, market analyst at Birinyi Associates Inc in Stamford, Connecticut, "but they are still skittish," he added in reference to the day's volatility. more...
Trading was volatile as poor demand in a U.S. Treasury auction poured cold water on an early rally sparked by the reassuring economic data. But by the end of the session much of that disappointment had worn off, traders said, as investors bet the economy was improving and stocks would continue rising from recent 12-year lows.
Homebuilder shares .DJUSHB rose 2.2 percent after new home sales rose at their fastest pace in 10 months in February, adding to recent data showing signs of hope in the battered housing sector. Consumer stocks also rose, with McDonald's Corp (MCD.N) gaining 2.9 percent.
Big manufacturers like Boeing Co (BA.N) advanced after U.S. orders for long-lasting manufactured goods unexpectedly rebounded in the same month.
"A lot of people want to think we've seen the bottom of the economic cycle," said Cleveland Rueckert, market analyst at Birinyi Associates Inc in Stamford, Connecticut, "but they are still skittish," he added in reference to the day's volatility. more...
Rabu, 25 Maret 2009
Commodity markets show signs of rebound
Petaling JayaCommodity markets are beginning to show signs of a turnaround but it is too early to tell if the current uptrend is sustainable, analysts said.
Commodity indices have been showing signs of life in the past week on the back of a rally in global equities in recent days, with crude oil trading above US$53 per barrel and crude palm oil (CPO) closing above RM2,000 per tonne on Monday.
“The CRB is beginning to develop a more convincing bottom and commodities are stronger in the short to medium term, but it is still too early to tell if it (the rally) is sustainable,” said Lee Cheng Hooi, Maybank Investment Bank Bhd head of retail research, referring to the Reuters/Jefferies CRB Index, which tracks 19 commodities.
Commodities took a breather yesterday, with the benchmark June CPO futures ending the day below RM2,000 per tonne, down RM50 or 2.46% to RM1,980 per tonne.
At press time, the Nymex 1-month crude oil future also eased slightly, down 0.86% to US$53.34 per barrel while spot gold was little changed, inching down US$4.66 or 0.5% to US$934.84 per tonne.
Analysts attribute the gain in commodity prices mainly to the weakening of the US dollar due to effects from economic stimulus measures in the world’s biggest economy.
Lee said with the greenback losing value, commodities were gaining as most were quoted in US dollars.
“With the US$300bil plan to buy US bonds, the theme is dollar negative. The commodities market is definitely experiencing a little bit of a rally,” he said. “The inverse relationship is still holding.”
International investors could also be using commodities as a hedge against inflation and a falling dollar.
Bloomberg reported that the greenback fell on Monday for the ninth time in 10 sessions against a basket of six major currencies, enhancing the appeal of raw materials to investors.
The US Federal Reserve (Fed) pledged last Wednesday to buy as much as US$300bil in treasuries, up to US$750bil of bonds backed by government-controlled mortgage companies and US$100bil in debt from other government agencies to loosen credit and bolster the housing market.
The following day, the CRB Index jumped the most this year as the greenback fell on news of the Fed’s announcement.
Tom Hartmann, a commodity analyst at AltaVest Worldwide Trading Inc in Mission Viejo, California, was quoted by Bloomberg as saying the Fed was printing money to buy government debt which would stoke fears of inflation.
Associated Press Shares of some top coal companies were down at the close
Shares of some top coal companies were down at the close of trading:
Arch Coal fell $.27 or 1.7 percent, to $15.20.
Consol Energy fell $.94 or 3.0 percent, to $30.11.
Massey Energy fell $.25 or 2.0 percent, to $12.23.
Peabody Energy fell $.22 or .8 percent, to $28.66.
Arch Coal fell $.27 or 1.7 percent, to $15.20.
Consol Energy fell $.94 or 3.0 percent, to $30.11.
Massey Energy fell $.25 or 2.0 percent, to $12.23.
Peabody Energy fell $.22 or .8 percent, to $28.66.
CPO futures rise on farmers’ strike
Petaling Jayaby Loong Tse Min
Crude palm oil (CPO) futures pushed past RM2,000 per tonne yesterday as a farmers’ strike in Argentina threatens soybean exports and on a delay by India to implement a previously announced removal of a 20% import duty on crude soybean oil.
CPO futures for the benchmark June delivery ended the day up RM45 to RM2,030 per tonne, closing above RM2,000 per tonne for the first time since September last year.
Bloomberg reported that a weaker US dollar was also driving international investors back into commodities, including CPO and soybean oil.
However, Kuala Lumpur-based Interband Group palm oil trader Jim Teh said CPO gains in the past few days were likely due to speculative play, pointing out that the gains had been accompanied by low volumes.
“Above RM2,000 today (Monday) is speculative play in tandem with crude oil,” he said.
In the event that the duty cut on soyoil in India goes through, Teh expects this to put a dent in demand for CPO from India.
“Demand for India may be down next month or not sustain beyond the second half of this year,” he said, forecasting CPO to trade between RM1,800 to RM1,900 next month.
On Friday, Bloomberg reported that the Indian government had yet to give notification on the removal of the 20% import duty on crude soybean oil.
India authoritiees had also declined to say when changes in the tax would be made, according to the report.
Last Thursday, India trade secretary G. K. Pillai was reported as saying that the import tax on crude soybean oil would be scrapped, causing CPO prices to pare gains that day.
A report from a foreign brokerage with offices in Kuala Lumpur said India’s move to scrap the duty on soybean oil would “put all edible oil imports into India on an equal footing”. However, the report said the impact would be minimal on CPO, pointing out that sunflower oil would take a bigger hit as its price was about the same as soybean oil.
“While the scrapping of the import duty on crude soybean oil removes a pricing anomaly relative to CPO, we note that even without an import duty, CPO still trades at a 15% discount to crude soybean oil.
“As a result, we do not expect a significant shift in demand between the two oils,” the report said.
Reuters Indonesia's KPC agrees first major China coal deal
SINGAPORE, March 24 (Reuters) - Indonesian miner PT Kaltim Prima Coal last week agreed its first major long-term deal to sell thermal coal to China, with 1 million tonnes to be shipped in the first year, a top company official said on Tuesday."It is a long-term deal for supplying coal up to five years. In the first year we'll be supplying 1 million tonnes, in the second year it will rise to 2 million tonnes and will go up to 5 million tonnes," Evan Ball, director of KPC, told Reuters on the sidelines of a mining conference in Singapore.
He did not give any details on prices, saying they were in line with current spot market prices.
KPC is a unit of the country's biggest miner, PT Bumi Resources Tbk (BUMI.JK). It produced nearly 40 million tonnes in 2007, about a fifth of Indonesia's total output.
Indonesia's coal exports have surged over the past few years, making it the world's biggest seller of thermal coal and forcing miners to seek new markets including China, the world's biggest consumer and producer of coal, which is on the cusp of becoming a permament importer of the power plant fuel as well.
China imported over 11.5 million tonnes of Indonesian coal last year, accounting for more than a quarter of its total.
Imports in February rose to their highest in 22 months as a deadlock over domestic price details drove power plants to buy from abroad, where prices have fallen sharply. Benchmark Australian prices slumped last week to a 21-month low of $60, less than one-third their record high last year. (Reporting by Sambit Mohanty; Writing by Jonathan Leff; Editing by Ben Tan)
Bloomberg Oil Rises on Speculation Report Will Show Fuel-Supply Drop
March 24 (Bloomberg) -- Crude oil rose to the highest in four months on speculation that a government report will show that U.S. supplies of gasoline and distillate fuel declined.
Gasoline stockpiles dropped 650,000 barrels last week, according to the median of 14 responses in a Bloomberg News survey before an Energy Department report tomorrow. Inventories of distillate fuel, a category that includes heating oil and diesel, probably fell 100,000 barrels. Prices were down most of the day because of lower stock prices and the rising dollar.
“The product markets are providing some support for crude,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “There really aren’t many crude oil headlines today.”
Crude oil for May delivery rose 18 cents, or 0.3 percent, to $53.98 a barrel at 2:43 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 28. Prices are up 21 percent this year.
Contango
The price of oil on the Nymex for delivery in June is $1.65 a barrel higher than for May, down from a $1.93 premium yesterday. December futures are up $7.70 from the front month, down from $8.28.
This structure, in which the future month’s price is higher than the one before it, is known as contango and allows buyers to profit from hoarding oil. A narrowing spread reduces the incentive to stockpile crude oil.
The Energy Department is scheduled to release its weekly supply report tomorrow at 10:30 a.m. in Washington.
Crude oil stockpiles rose 4.58 million barrels to 354.5 million in the week ended March 20, a report by the industry- funded American Petroleum Institute showed. The API inventory report was released today at 4:30 p.m. in Washington. more...
Gasoline stockpiles dropped 650,000 barrels last week, according to the median of 14 responses in a Bloomberg News survey before an Energy Department report tomorrow. Inventories of distillate fuel, a category that includes heating oil and diesel, probably fell 100,000 barrels. Prices were down most of the day because of lower stock prices and the rising dollar.
“The product markets are providing some support for crude,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “There really aren’t many crude oil headlines today.”
Crude oil for May delivery rose 18 cents, or 0.3 percent, to $53.98 a barrel at 2:43 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 28. Prices are up 21 percent this year.
Contango
The price of oil on the Nymex for delivery in June is $1.65 a barrel higher than for May, down from a $1.93 premium yesterday. December futures are up $7.70 from the front month, down from $8.28.
This structure, in which the future month’s price is higher than the one before it, is known as contango and allows buyers to profit from hoarding oil. A narrowing spread reduces the incentive to stockpile crude oil.
The Energy Department is scheduled to release its weekly supply report tomorrow at 10:30 a.m. in Washington.
Crude oil stockpiles rose 4.58 million barrels to 354.5 million in the week ended March 20, a report by the industry- funded American Petroleum Institute showed. The API inventory report was released today at 4:30 p.m. in Washington. more...
Reuters Wall St. slides as investors reassess government bank plan
NEW YORK (Reuters) - Stocks slid on Tuesday as investors paused to reassess the likely success of the government's latest plans to clean up bank balance sheets and revive the financial system, a day after initial euphoria over the plan drove huge gains.
Bank stocks, which posted their best day in at least 16 years on Monday, dragged Wall Street lower as investors booked profits amid questions whether the U.S. government's plan to spend up to $1 trillion to buy up toxic bank assets would work.
The S&P financial index .GSPF fell 6.5 percent. Bank of America (BAC.N) lost 8.3 percent to $7.15, JPMorgan Chase & Co lost 9.2 percent to $26.22, while Goldman Sachs (GS.N) shed 1.4 percent $110.33.
"There is a fair amount of debate about what has been proposed ... and whether this is actually going to solve the problem or not," said Paul Nolte, director of investments at Hinsdale Associates in Hinsdale Illinois. more...
Bank stocks, which posted their best day in at least 16 years on Monday, dragged Wall Street lower as investors booked profits amid questions whether the U.S. government's plan to spend up to $1 trillion to buy up toxic bank assets would work.
The S&P financial index .GSPF fell 6.5 percent. Bank of America (BAC.N) lost 8.3 percent to $7.15, JPMorgan Chase & Co lost 9.2 percent to $26.22, while Goldman Sachs (GS.N) shed 1.4 percent $110.33.
"There is a fair amount of debate about what has been proposed ... and whether this is actually going to solve the problem or not," said Paul Nolte, director of investments at Hinsdale Associates in Hinsdale Illinois. more...
Indopremier PTBA – FY08 Performances
Current concern on PTBA is the on-going weakening of coal price that will affect unsold volume or even those already binded in a contract. The weakening coal prices were due to global economic crisis as indicated by clear weakening of US import
activities in 4Q08 (stock note 17/03/2009).
Most of mining companies under our coverage, however, locked in sales in the early 2009 and did not experience slowing volume of thermal coal demand. In our view, this is due to their customers are of better quality profile as compared to the average customers in the coal thermal market.
To this point, global recession may negatively affect mining companies under our coverage through on-going weakening coal price instead of quantity sold. As such we cut our ASP for the year 2009 by 12% for domestic sales to Rp608.688/ton and 11% for export sales to US$58.5/ton.
Apart from the price factor, we view PTBA (and other mining companies under our coverage) to be fundamentaly worth to invest in. Current DCF calculation, with WACC of 16.3% and LTG 2%, still calls for the share price to be valued at Rp8.858 per share, significantly higher compared to yesterday’s closing of Rp6.800 per share. BUY
activities in 4Q08 (stock note 17/03/2009).
Most of mining companies under our coverage, however, locked in sales in the early 2009 and did not experience slowing volume of thermal coal demand. In our view, this is due to their customers are of better quality profile as compared to the average customers in the coal thermal market.
To this point, global recession may negatively affect mining companies under our coverage through on-going weakening coal price instead of quantity sold. As such we cut our ASP for the year 2009 by 12% for domestic sales to Rp608.688/ton and 11% for export sales to US$58.5/ton.
Apart from the price factor, we view PTBA (and other mining companies under our coverage) to be fundamentaly worth to invest in. Current DCF calculation, with WACC of 16.3% and LTG 2%, still calls for the share price to be valued at Rp8.858 per share, significantly higher compared to yesterday’s closing of Rp6.800 per share. BUY
Crude palm oil futures fall on profit taking
Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives ended lower yesterday on profit-taking activities after Monday’s run-up, dealers said.
They said the market, which had been on the upward trend, failed to sustain its momentum ahead of the release of the export figures.
The cargo surveyors are scheduled to release their latest reports today.
At close, April 2009 fell RM48 to settle at RM2,072 per tonne, May 2009 went down RM72 to RM2,012 per tonne, June 2009 decreased RM50 to RM1,980 per tonne and July 2009 was RM30 lower at 1,950 per tonne.
Turnover for the day dropped to 12,465 lots from 17,506 lots recorded on Monday and open interests declined to 92,694 contracts from 93,132 contracts previously.
On the physical market, April South was traded slightly lower at RM2,120 per tonne compared to RM2,130 per tonne on Monday.
They said the market, which had been on the upward trend, failed to sustain its momentum ahead of the release of the export figures.
The cargo surveyors are scheduled to release their latest reports today.
At close, April 2009 fell RM48 to settle at RM2,072 per tonne, May 2009 went down RM72 to RM2,012 per tonne, June 2009 decreased RM50 to RM1,980 per tonne and July 2009 was RM30 lower at 1,950 per tonne.
Turnover for the day dropped to 12,465 lots from 17,506 lots recorded on Monday and open interests declined to 92,694 contracts from 93,132 contracts previously.
On the physical market, April South was traded slightly lower at RM2,120 per tonne compared to RM2,130 per tonne on Monday.
Selasa, 24 Maret 2009
CIMB Berlian Laju Tanker – Rupiah depreciation savage earnings
FY08 Results – Berlian Laju Tanker – Rupiah depreciation savage earnings
Full year core net profit was 76-80% below estimate and consensus due to the exchange loss from the rupiah depreciation, and associate losses. Excluding these items, EBIT was only 5.7% below. BLTA consolidated its Chembulk acquisition for a full year, resulting in an approximately doubling of revenue and EBIT. Maintain OUTPERFORM, but reduce earnings and SOP target to Rp680 (from Rp900) because of lower-than-expected cash balances. We also revise our assumption to zero dividends from 2008 onwards, from Rp50/share. Our positive rating is based on BLTA’s cheap valuations, although there is no near-term catalyst as freight rates fall. We think BLTA will have to raise around US$100m within the next 12 months to meet the CB redemption, and we have factored this assumption into our model. Should BLTA fail to do so, its financial position could become perilous, but this is not our base case scenario.
Full year core net profit was 76-80% below estimate and consensus due to the exchange loss from the rupiah depreciation, and associate losses. Excluding these items, EBIT was only 5.7% below. BLTA consolidated its Chembulk acquisition for a full year, resulting in an approximately doubling of revenue and EBIT. Maintain OUTPERFORM, but reduce earnings and SOP target to Rp680 (from Rp900) because of lower-than-expected cash balances. We also revise our assumption to zero dividends from 2008 onwards, from Rp50/share. Our positive rating is based on BLTA’s cheap valuations, although there is no near-term catalyst as freight rates fall. We think BLTA will have to raise around US$100m within the next 12 months to meet the CB redemption, and we have factored this assumption into our model. Should BLTA fail to do so, its financial position could become perilous, but this is not our base case scenario.
Bloomberg Indonesia’s rupiah advanced
March 24 (Bloomberg) -- Indonesia’s rupiah advanced for a fourth day as overseas investors bought more of the nation’s stocks, adding to signs that investor appetite for risk is improving.
The currency is up almost 5 percent in March, set to snap a two-month loss, as the country’s Jakarta Composite index of shares extended a rally. Inflows into emerging-market equities climbed for a second week, totaling a net $350 million in the period to March 18, according to EPFR Global, a research company based in Cambridge, Massachusetts.
“The positive sentiment across Asia would benefit the currency,” said Euben Paracuelles, an economist in Singapore at Royal Bank of Scotland Plc. “Equity markets are rallying. That’s going to benefit the Jakarta index and it’s positive for the rupiah, with foreigners coming in and supporting stocks.”
The rupiah strengthened 1 percent to 11,450 per dollar as of
9:54 a.m. in Jakarta, according to data compiled by Bloomberg.
The currency reached 11,365, the highest level since Feb. 2.
The rupiah is the second-biggest gainer this month among Asia’s 10 most-active currencies outside of Japan as overseas investors bought more Indonesian stocks then they sold on 11 out of the last 12 trading days.
The MSCI Asia-Pacific Index of shares rose for a second day, climbing 1.8 percent, after the U.S. Treasury unveiled a plan to remove $1 trillion of bad assets from the financial system and restore lending. The Jakarta Composite index gained 1.2 percent, a fifth day of gains, the longest stretch since November.
Non-deliverable forwards contracts show traders have pared bets on how far the rupiah will depreciate in one month, predicting a decline of 0.2 percent to 11,473 a dollar compared with expectations at the start of March for a rate of 12,588.
Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date.
For Related News and Information:
Stories on Asian currencies: TNI ASIA FRX BN Most read Indonesian stories: MNI INDO Currency Forecasts: FXFC IDR Economic data: ECST ID *T
--Editors: Simon Harvey, Sam Nagarajan
The currency is up almost 5 percent in March, set to snap a two-month loss, as the country’s Jakarta Composite index of shares extended a rally. Inflows into emerging-market equities climbed for a second week, totaling a net $350 million in the period to March 18, according to EPFR Global, a research company based in Cambridge, Massachusetts.
“The positive sentiment across Asia would benefit the currency,” said Euben Paracuelles, an economist in Singapore at Royal Bank of Scotland Plc. “Equity markets are rallying. That’s going to benefit the Jakarta index and it’s positive for the rupiah, with foreigners coming in and supporting stocks.”
The rupiah strengthened 1 percent to 11,450 per dollar as of
9:54 a.m. in Jakarta, according to data compiled by Bloomberg.
The currency reached 11,365, the highest level since Feb. 2.
The rupiah is the second-biggest gainer this month among Asia’s 10 most-active currencies outside of Japan as overseas investors bought more Indonesian stocks then they sold on 11 out of the last 12 trading days.
The MSCI Asia-Pacific Index of shares rose for a second day, climbing 1.8 percent, after the U.S. Treasury unveiled a plan to remove $1 trillion of bad assets from the financial system and restore lending. The Jakarta Composite index gained 1.2 percent, a fifth day of gains, the longest stretch since November.
Non-deliverable forwards contracts show traders have pared bets on how far the rupiah will depreciate in one month, predicting a decline of 0.2 percent to 11,473 a dollar compared with expectations at the start of March for a rate of 12,588.
Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date.
For Related News and Information:
Stories on Asian currencies: TNI ASIA FRX BN
--Editors: Simon Harvey, Sam Nagarajan
MacQ Indo market: valuation screen
Indo market: valuation screen
Following the strong market move yesterday, the Indo market is now trading on 12.5x and 11.5x P/E for 2009 and 2010, backed by 4.7% and 5.1% dividend yield for 2009 and 2010. From the Jakarta sales desk perspective, value outliers may be found on:
1. Indosat – 10.1x P/E and 4.1x EV/EBITDA for 2009; trading at a significant discount to slower growth peer PT Telkom.
2. Bank Danamon – 7.6x P/E and 1.3x P/Book for 2009
3. Perusahaan Gas Negara – 8.0x P/E for 2009 with a 23% EPS growth for 2010 (P/E falling to 6.5x).
4. Ciputra Development – 0.6x PBR for 2009 with subsidiary companies trading below cash backings.
5. Bank Panin – 1.0x P/Book for 2009. The ceveat is the sub-standard RoE of 9.6%, or 11.4x P.E for 2009. But we see 31% EPS growth in 2010.
6. Bumi Resources – 3.0x P/E, 0.7x P/Book, 10% dividend yield for 2009. The ceveat is corporate governance.
Following the strong market move yesterday, the Indo market is now trading on 12.5x and 11.5x P/E for 2009 and 2010, backed by 4.7% and 5.1% dividend yield for 2009 and 2010. From the Jakarta sales desk perspective, value outliers may be found on:
1. Indosat – 10.1x P/E and 4.1x EV/EBITDA for 2009; trading at a significant discount to slower growth peer PT Telkom.
2. Bank Danamon – 7.6x P/E and 1.3x P/Book for 2009
3. Perusahaan Gas Negara – 8.0x P/E for 2009 with a 23% EPS growth for 2010 (P/E falling to 6.5x).
4. Ciputra Development – 0.6x PBR for 2009 with subsidiary companies trading below cash backings.
5. Bank Panin – 1.0x P/Book for 2009. The ceveat is the sub-standard RoE of 9.6%, or 11.4x P.E for 2009. But we see 31% EPS growth in 2010.
6. Bumi Resources – 3.0x P/E, 0.7x P/Book, 10% dividend yield for 2009. The ceveat is corporate governance.
MacQ Bumi Resources: a catch-up with the management
Bumi Resources: a catch-up with the managementAdam Worthington met with Bumi’s senior management yesterday. Key points:
1. No new purchase transactions in the next 12-months (a positive) – The focus will be on making the recent acquisitions work and on existing operations.
2. Unlocking the upside in Darmahenwa (a positive) – Bumi is restructuring this operation with numerous managers being made redundant and the company looking to order a new fleet of high quality equipment (Caterpillar/Komatsu etc).
3. Unlocking the upside in Herald Resources (a positive) – Bumi looks to improve cost structure through renegotiation of contracts, while at the same time working on the boundary approval.
4. Catching-up with coal price settlements (a negative) – Bumi has only locked in 30% of its production into price and given our negative outlook for spot prices we see risk to consensus earnings.
5. Bakrie & Brothers debt problems (a negative) – Adam Worthington remains unconvinced that a resolution whereby Northstar acting as a white knight will materialize anytime soon.
Coal: Newcastle coal price for March settlement was up by US$0.35 to US$61.65 with the future curves also massively rallying in the range of US$1-4/t. The 2010 average settlement price is now trading at US$70.6 vs. our forecast of US$65/t. This is mainly driven by the gain in oil price, which was up by US$1.73 to US$53.8/bbl.
Associated Press Coal companies shares up at noon
Shares of some top coal companies were up at the close of trading:
Arch Coal rose $1.06 or 7.4 percent, to $15.47.
Consol Energy rose $2.30 or 8.0 percent, to $31.05.
Massey Energy rose $1.11 or 9.8 percent, to $12.48.
Peabody Energy rose $2.07 or 7.7 percent, to $28.88.
Arch Coal rose $1.06 or 7.4 percent, to $15.47.
Consol Energy rose $2.30 or 8.0 percent, to $31.05.
Massey Energy rose $1.11 or 9.8 percent, to $12.48.
Peabody Energy rose $2.07 or 7.7 percent, to $28.88.
Bloomberg Indonesia’s Jakarta Composite index added 3.4 percent
March 23 (Bloomberg) -- Indonesia’s Jakarta Composite index added 3.4 percent to 1,406.65 at the close, its biggest advance since Jan. 5. The benchmark index has climbed for four straight days, the longest-winning streak since the period ended Nov. 28.
Bank, phone stocks: Indonesian telecommunications and bank stocks are among those that Templeton Asset Management Ltd. favors, Mark Mobius said in an interview with Bloomberg Television today. These include PT Bank Central Asia (BBCA IJ), said Mobius, who helps oversee about $20 billion of emerging- market assets at the San Mateo, California-based asset manager.
PT Telekomunikasi Indonesia (TLKM IJ), the nation’s largest telephone company, climbed 3.5 percent to 7,350 rupiah, its highest close since Sept. 10. It was the biggest contributor to gains on the benchmark index. Bank Central Asia, the nation’s largest financial services company by market value, added 3.4 percent to 3,050 rupiah. PT Bank Mandiri (BMRI IJ) surged 11 percent to 2,150 rupiah, its largest gain since Dec. 15.
Palm-oil producers: Indonesia may raise overseas shipments of palm oil by 17 percent this month compared with February on higher demand from China and India, according to Susanto, marketing head of the Indonesian Palm Oil Producers’ Association. Meanwhile, palm oil prices rose as much as 3.3 percent to 2,051 ringgit ($563) in Malaysia today.
PT Astra Agro Lestari (AALI IJ), Indonesia’s biggest agricultural company by value, gained 4.5 percent to 12,900 rupiah, halting a two-day slide. PT Sampoerna Agro (SGRO IJ), the Indonesian palm oil producer owned by billionaire Putera Sampoerna, climbed 2.5 percent to 1,210 rupiah, its highest close in a month.
PT Aneka Tambang (ANTM IJ), Indonesia’s second-largest nickel producer, climbed 1.8 percent to 1,140 rupiah, its highest close in more than two weeks. Aneka Tambang plans to spend $37 million to buy coal mines and explore for the fuel in its existing concessions, Investor Daily Indonesia reported, citing Corporate Secretary Bimo Budi Satriyo. The funds would be part of 2.55 trillion rupiah ($217 million) of capital spending this year, the report said.
PT Astra International (ASII IJ), Indonesia’s biggest auto retailer, rallied 8.8 percent to 14,900 rupiah, its highest close since Oct. 7. Astra had its share-price estimate raised 18 percent to 16,750 rupiah at Bank of America Corp., which said in a March 20 report that motorcycle and car sales will decline less than earlier estimated.
PT Bank Danamon Indonesia (BDMN IJ), the lender backed by Temasek Holdings Pte and Deutsche Bank AG, surged 11 percent to 2,925 rupiah, the largest gain since Nov. 27, on speculation that shareholders will approve today its 4 trillion rupiah ($343 million) rights offer plan.
“People expect the rights offer will be approved by shareholders,” said Poltak Hotradero, head of research at PT Recapital Securities in Jakarta. “Non-performing loans may rise this year, so if Danamon wants to grow its lending at a time when provisions increase, it must boost capital.”
PT Bumi Resources (BUMI IJ), Asia’s largest exporter of power-station coal, climbed 2.7 percent to 770 rupiah. About 242.7 billion rupiah of Bumi shares changed hands, making it the most actively traded stock by value.
Bumi may pay 30 percent of last year’s net income in dividends, Kontan newspaper reported, citing Dileep Srivastava, the company’s head of investor relations. The company’s 2008 profit excluding one-time gains may have doubled from $317 million in 2007, the report said.
PT Indocement Tunggal Prakarsa (INTP IJ), Indonesia’s second-largest cement maker, rallied 4.1 percent to 4,450 rupiah, the highest close since Feb. 13. Indocement had its rating raised to “buy” from “hold” by PT Samuel Sekuritas after the company posted higher-than-expected profit last year. Indocement reported on March 20 a record net profit of 1.74 trillion rupiah ($150 million) for last year.
To contact the reporter on this story: Chen Shiyin in Jakarta at schen37@bloomberg.net
Last Updated: March 23, 2009 05:53 EDT
Bank, phone stocks: Indonesian telecommunications and bank stocks are among those that Templeton Asset Management Ltd. favors, Mark Mobius said in an interview with Bloomberg Television today. These include PT Bank Central Asia (BBCA IJ), said Mobius, who helps oversee about $20 billion of emerging- market assets at the San Mateo, California-based asset manager.
PT Telekomunikasi Indonesia (TLKM IJ), the nation’s largest telephone company, climbed 3.5 percent to 7,350 rupiah, its highest close since Sept. 10. It was the biggest contributor to gains on the benchmark index. Bank Central Asia, the nation’s largest financial services company by market value, added 3.4 percent to 3,050 rupiah. PT Bank Mandiri (BMRI IJ) surged 11 percent to 2,150 rupiah, its largest gain since Dec. 15.
Palm-oil producers: Indonesia may raise overseas shipments of palm oil by 17 percent this month compared with February on higher demand from China and India, according to Susanto, marketing head of the Indonesian Palm Oil Producers’ Association. Meanwhile, palm oil prices rose as much as 3.3 percent to 2,051 ringgit ($563) in Malaysia today.
PT Astra Agro Lestari (AALI IJ), Indonesia’s biggest agricultural company by value, gained 4.5 percent to 12,900 rupiah, halting a two-day slide. PT Sampoerna Agro (SGRO IJ), the Indonesian palm oil producer owned by billionaire Putera Sampoerna, climbed 2.5 percent to 1,210 rupiah, its highest close in a month.
PT Aneka Tambang (ANTM IJ), Indonesia’s second-largest nickel producer, climbed 1.8 percent to 1,140 rupiah, its highest close in more than two weeks. Aneka Tambang plans to spend $37 million to buy coal mines and explore for the fuel in its existing concessions, Investor Daily Indonesia reported, citing Corporate Secretary Bimo Budi Satriyo. The funds would be part of 2.55 trillion rupiah ($217 million) of capital spending this year, the report said.
PT Astra International (ASII IJ), Indonesia’s biggest auto retailer, rallied 8.8 percent to 14,900 rupiah, its highest close since Oct. 7. Astra had its share-price estimate raised 18 percent to 16,750 rupiah at Bank of America Corp., which said in a March 20 report that motorcycle and car sales will decline less than earlier estimated.
PT Bank Danamon Indonesia (BDMN IJ), the lender backed by Temasek Holdings Pte and Deutsche Bank AG, surged 11 percent to 2,925 rupiah, the largest gain since Nov. 27, on speculation that shareholders will approve today its 4 trillion rupiah ($343 million) rights offer plan.
“People expect the rights offer will be approved by shareholders,” said Poltak Hotradero, head of research at PT Recapital Securities in Jakarta. “Non-performing loans may rise this year, so if Danamon wants to grow its lending at a time when provisions increase, it must boost capital.”
PT Bumi Resources (BUMI IJ), Asia’s largest exporter of power-station coal, climbed 2.7 percent to 770 rupiah. About 242.7 billion rupiah of Bumi shares changed hands, making it the most actively traded stock by value.
Bumi may pay 30 percent of last year’s net income in dividends, Kontan newspaper reported, citing Dileep Srivastava, the company’s head of investor relations. The company’s 2008 profit excluding one-time gains may have doubled from $317 million in 2007, the report said.
PT Indocement Tunggal Prakarsa (INTP IJ), Indonesia’s second-largest cement maker, rallied 4.1 percent to 4,450 rupiah, the highest close since Feb. 13. Indocement had its rating raised to “buy” from “hold” by PT Samuel Sekuritas after the company posted higher-than-expected profit last year. Indocement reported on March 20 a record net profit of 1.74 trillion rupiah ($150 million) for last year.
To contact the reporter on this story: Chen Shiyin in Jakarta at schen37@bloomberg.net
Last Updated: March 23, 2009 05:53 EDT
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