Bloomberg Crude Oil Set for Rally to $68, Banks Say: Technical Analysis

April 3 (Bloomberg) -- Crude oil’s rally may carry on to $68 a barrel, technical analysts at Credit Suisse Group AG and BNP Paribas SA said.

Oil futures in New York formed a “base” between $40 and $50 a barrel in the first quarter from which prices can rally further, David Sneddon, head of technical analysis at Credit Suisse in London, and Andrew Chaveriat, a BNP analyst in New York, said separately.

Having broken out of the range set by the rally from Dec. 19’s four-year low of $32.40 to the high of $50.47 on Jan. 6, prices are poised to move higher. Oil may repeat the $18.07 a barrel gain of that December-to-January advance, giving a target of about $68.50 a barrel, the analysts said.

“You wouldn’t give up on the rally yet, it still has legs,” Sneddon, said yesterday at a London presentation hosted by Bloomberg LP, the parent company of Bloomberg News.

Futures on the New York Mercantile Exchange, 19 percent higher this year, traded at $53.07 a barrel today.

Crude will first be drawn to $59.50, a price target shown on a so-called Fibonacci chart as a 23.6 percent recovery of last year’s crash from July’s record of $147.27 down to $32.40. Prices may then peak near $68.50, Sneddon said.

The ratios used in Fibonacci analysis are based on the sequence identified by Italian mathematician Leonardo Fibonacci in the 13th century and used to predict support and resistance levels for prices.

In contrast to Seddon, BNP’s Chaveriat said crude may surpass the target near $68 and rise above $70 a barrel in the next three months. The contract will be drawn towards its next Fibonacci level of $76.28, a 38.2 percent retracement of last year’s decline, Chaveriat said.

“It would not be unreasonable to see $71 or $72 later this summer,” Chaveriat added. “The best barometer showing the path of least resistance is upwards in the medium term is the big base we built back in December, January.”

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

Reuters U.S. jobless rate hits 25-year high

WASHINGTON (Reuters) - The U.S. unemployment rate soared to 8.5 percent last month, a 25-year high, as employers slashed jobs and cut workers' hours to the lowest level on record, the government said on Friday.

In a report underscoring the economy's distress, the Labor Department said employers slashed 663,000 jobs in March and revised prior data to show job losses of 741,000 in January, the biggest decline since October 1949. February's drop in non-farm payrolls was unrevised at 651,000.

But coming in the wake of recent economic data that has surprised on the upside, the report did little to alter perceptions that the economy's downward momentum is slowing, as unemployment tends to peak well after a recession ends.

The economy, now in its 16th month of recession, remained on track to recover in the second half of this year and the intense phase of job losses is likely over, economists said.

"I don't think the recovery for the end of this year is derailed by this jobs report. These are lagging indicators. Job losses are down significantly from January, which may very well be the peak," said Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, New Jersey.

U.S. stocks initially fell on the data but reversed course to end higher, cheered by solid earnings from BlackBerry maker Research in Motion and comments from Federal Reserve Chairman Ben Bernanke on efforts to stabilize banks. The Dow Jones industrial ended up 39.51 points at 8,017.59.

Government bond prices fell sharply, as some traders had braced for an even weaker jobs report.

Economists had expected non-farm payrolls to fall by a slightly less severe 650,000 jobs in March, but had anticipated the jump in the jobless rate from February's 8.1 percent.

The March unemployment rate was the highest since November 1983, when the economy was recovering from the back-to-back recessions of 1980 and 1981, the latter lasting 16 months. more...

Reuters Dow ends above 8,000 in best 4-week run since 1933

NEW YORK (Reuters) - Stocks rose on Friday, with the Dow marking its best four-week winning streak since 1933, lifted by robust results from Research in Motion and comments by Fed Chairman Ben Bernanke, who said the central bank will do everything it can to stabilize banks.

Growing conviction that the worst is over for the economy helped Wall Street shrug off dour jobs data showing the highest unemployment rate since 1983.

The Nasdaq outperformed other indexes, helped by a 21 percent jump in the U.S.-listed stock of Research in Motion (RIM.TO)(RIMM.O) after the BlackBerry maker, a Canadian company, posted surprisingly strong results on brisk retail demand and gave a rosy outlook after Thursday's closing bell.

"The move into technology reflects investors rotating funds into groups likely to benefit from an economic recovery, even though a turnaround in corporate profits in that sector might still be a few quarters away," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

The Dow Jones industrial average .DJI climbed 39.51 points, or 0.50 percent, to 8,017.59. The Standard & Poor's 500 Index .SPX rose 8.12 points, or 0.97 percent, to 842.50. The Nasdaq Composite Index .IXIC gained 19.24 points, or 1.20 percent, to 1,621.87.

For the week, the Dow rose 3.1 percent, while the S&P 500 advanced 3.3 percent and the Nasdaq jumped 5 percent. more...

GlobalCoal Newcastle Coal Index

Weekly NEWC Coal Index
06-Mar-09 61.70
13-Mar-09 62.10
20-Mar-09 60.30
27-Mar-09 61.39
03-Apr-09 60.79

Monthly NEWC Coal Index
Dec-2008 78.18
Jan-2009 82.69
Feb-2009 75.03
Mar-2009 61.37

China Reality Research Coal CLSA Asia-Pacific Markets Qinhuangdao spot prices

Average daily coal shipments from Qinhuangdao were 668,000 tonnes between March 27 and April 2, up 4% WoW and 3% higher than the average during 1H08.
On average, 6,009 wagons arrived daily at the port between March 27 and April 2, down 15% WoW and 34% on 1H08.
Port inventory fell 15% WoW to 4.6m tonnes.
Having been flat for four weeks, spot prices of higher-quality coal (5,800kcal/kg and 5,500kcal/kg) rose slightly, up 1.4% WoW and 0.4% WoW, respectively. Meanwhile, inferior coal (5,000kcal/kg) continued rising, up 2.1% WoW.
According to traders we talk to in the port, inventory pressure among the big suppliers is easing and, as a result, they are planning price hikes. For example, in April Shenhua (1088 HK) is asking for Rmb10/t more for 5,500kcal/kg coal, and China Coal (1898 HK) will increase its selling price by Rmb5/t. Datong Group is expected to follow suit soon.

Domestic media today are reporting that the government has stepped in to help settle the 2009 price negotiations; settlement has been elusive up till now due to the sharp
divergence between producers and IPPs. The president of Huaneng (902 HK) has told the media that his company’s bottom line is that the new price should not exceed last
year’s price. However, CRR expects that the recent increase in prices at the port is likely to strengthen the coal producers’ hand in the negotiations.

JPM - China: NBS manufacturing PMI suggests expanding industrial activities

China’s two separate manufacturing PMI series drifted in different directions in March. The CLSA-PMI edged down 0.3pt, largely stable from the February level, while the NBS-PMI advanced solidly last month by 3.4pt to 52.4, coming above the 50 expansionary threshold for the first time in six months. The NBS-PMI is sending a clear signal that industrial activities, reflecting the balance of goods demand—from exports, inventory accumulation, consumption, and fixed investment—are expanding again. While the global demand has remained subdued, domestic demand is getting a powerful lift from the government’s aggressive fiscal and monetary stimulus.

Going forward, we expect continued improvement in industrial growth momentum, as the government’s aggressive stimulus on both fiscal and monetary fronts kicks into the economy powerfully in the current quarter, and the external environment improves gradually. It is encouraging that the inventory of steel products, especially long products, which are mostly used in construction projects, started to fall since last week, likely suggesting that the end demand is gathering momentum. Passenger vehicle sales have been strong since early this year, and the impressive recovery in property transaction volume has been sustained, and has been country-wide. On the monetary front, we estimate that strong loan growth continued in March, with new loan creation easily to be over Rmb1 trillion again last month, compared with Rmb1.6 trillion in January and Rmb1.06 trillion in February. We believe the credit expansion has further room to go and the market should not be surprised if total new loans in 2009 could be as high as Rmb7-8 trillion, compared with Rmb4.9 trillion in 2008. This is set to provide a very powerful stimulus for domestic demand.

Against the backdrop of heightened concerns on China’s unemployment and the risk on social unrest, it is encouraging to see that the employment component in the PMI series also picked up modestly to 48.6 from the all-time low of 43.0 in January.

Exane BNP - Bear Market Rally

Yesterday's rally was driven mainly by: a) The G20 plan to provide an additional US1,100bn in emergency aid, a USD750bn reinforcement of the IMF's resources and USD250bnof trade finance. According to the G20, the proposed plan should boost global output by 4% by end 2010 (for information, USD1,1trn is equivalent to about 2% of global GDP). b) The FASB's partial suspension of Mark to market rules re. toxic assets on banks' balance sheets. This was enough to extend the current bear market rally, also supported by the Fed and Geithner plans announced earlier in March.

Comments:
The USD1.1trn plan is mainly aimed at smaller countries and emerging economies and does not address the core of the problems remaining in the financial sector re. toxic assets.
The change in FASB rules allows banks to value toxic assets based on what they would be worth in an 'orderly sale' as opposed to a forced distressed sale. Different valuation methods used by different banks could lead to even more opacity, hardly a positive for investor confidence, in our view.
As we mentioned in our comment of 23 March, the announce measures would provide support to equities, at least in the short term. We also mentioned that a typical bear market rally by historical standards would bring the DJ Stoxx 600 to around 190. The index closed yesterday at 188, which implies limited upside from here.
For those who want to play the rebound further, we reiterate what we said on 23 March: On a sector level, we are comfortable with our Overweight stance on Oil & Gas. The sector has a rock solid balance sheet and should benefit from a change in market perceptions from deflation to reflation/inflation.
Basic Resources are a more geared play and our Overweight stance in Steel proves to be a useful hedge against bear market rallies such as the current one. Mining should also continue to be supported by the reflation theme.
We remain suspicious of Banks, given the dire economic outlook, rising default rates and uncertainties regarding implementation of the Geithner plan.

CLSA Telkom Indonesia (TLKM I) from OPF to BUY and raises the TP from Rp8,000 to Rp9,000

Wilianto upgrades Telkom Indonesia (TLKM I) from OPF to BUY and raises the TP from Rp8,000 to Rp9,000.

Maybe it is helpful to learn from the past:
HISTORY: in 1996-2002, Telkomsel spent large capex and aggressively built its network while competitors Indosat (ISAT IJ) and Excelcomindo (EXCL IJ) were busy with debt restructuring.
Result: Telkomsel gained market share from 33% in 1996 to 53% in 2002 + take over #1 position from ISAT
NOW: Telkom capex 3x its closest competitors in 2009 (US$1.8-2bn). It will widen its lead against competitors. Meantime, competitors are cutting down on capex, reducing their ability to compete and to expand coverage.

Is history repeating itself?
Early indication suggests this will be the case. Telkomsel added 3.8m subs in 2m09, with net add share of 65%. Even if we assume 80% capex absorption of US$1.5bn, TLKM capex will still be more than twice of ISAT and EXCL.

We also want to add that despite the improving environment, the stock may continue to underperform in the short term as investors are focusing on higher beta names. However, we’d like to point out that the news flow, after 2 years of mobile price war and negative news flow, has already seen marked improvement and is likely to continue. After playing defensive, Telkomsel is now turning the table and playing the aggressor.

Key points from the report:
Upgrade TLKM from OPF to a BUY as competition pressure eases.
Upside potential: to our earnings if tariff and Arpu stabilise as expected (we have not build it in our forecast).
Competitors are cutting down on capex, reducing their competitiveness.
Telkom has strong balance sheet + cash flow to sustain its capex (triple of its closest competitors).
This will allows Telkom to tap into new frontier and to strengthen its position in areas of presence through better network coverage, quality, and capacity.
A 10% incremental revenues/ Arpu in Telkomsel will boost Telkom’s consolidated earnings by 15%.
Our assumption currently called for an 8% decline in Arpu, 13% subscriber growth (8.2m net add in 2009 vs 14.9m net add in 2008), and 2% decline in Ebit margin of Telkomsel.
No change in earnings forecast.
Valuation: remains undemanding at 12.5x PER 09CL and 5x EV/Ebitda 09CL (adjusted for 30% minority), which is slightly below its regional peers.

Danareksa Bakrie Telecom (BTEL IJ, Rp51 BUY) Mass market appeal

Bakrie Telecom Mass market appeal

Pursuing a consistent strategy
Bakrie Telecom (BTEL) is performing well in Indonesia’s highly competitive telecommunications industry. With the big three players involved in a price war, BTEL has adopted a successful strategy in terms of product positioning and pricing. As a result, BTEL has become well known among consumers for its “value for money” products. This has enabled BTEL to build up its subscriber base and record excellent operating performance in FY08.

Tower sales to be completed soon
The sale of the company’s towers will be completed soon. In this regard, three potential buyers have been shortlisted although no names have been mentioned yet. Initially the plan was to sell 543 towers to raise around Rp380bn. However, we believe there is upside to this figure. The plans will allow the company to reduce its assets and free up cash. Proceeds from the sale of the towers will be used to help finance capex of an estimated US$200mn this year.

Concerns on the short term investments
As of Dec 08, BTEL’s cash and equivalent stood at Rp1.6tr, comprising cash holdings of Rp500bn (placed at a number of banks including Standard Chartered and Deutsche Bank) and nearly Rp1.1tr of short term investments which were mostly invested through Recapital Asset Management and Samuel Sekuritas. In regard to the short term investments we believe there are some risks due to a lack of transparency in how the funds have been invested and whether there are losses as a result of the turmoil on the capital markets. If this is the case - and the company has to delay capex - then BTEL could potentially lose a window of opportunity to further penetrate the telecoms market. In this business, timing is everything: there is little left for latecomers.

Attractive valuation
BTEL has a proven business model. Hence, the company is performing well and it has good operating cash flow. The downside, as already mentioned, relates to the lack of transparency in regard to its short term investments. This overhanging issue may dampen sentiment on the stock in the short term (especially as there is news that the holding company is having trouble honoring its repurchase agreements), but from a longer term perspective it offers a buying opportunity. Valuation wise, the stock is attractive. Our TP is Rp114. This translates into EV/EBITDA FY09 of 3.9x and core PER FY09 of 11.4x. BUY recommendation maintained.

CIMB Telekomunikasi Indonesia

Company update - Robust growth but largely priced in - by Kelvin Goh CFA
(TLKM IJ / TLKM.JK, NEUTRAL - Downgraded, Rp7,300 - Tgt. Rp8,500, Telecommunications)

We downgrade Telkom Indonesia to NEUTRAL from Outperform after a recent surge in its share price and recommend investors to switch into cyclicals. The stock has outpaced the JCI by 44% since our upgrade to Outperform in Aug 08. We remain positive on Telkom given: 1) its stronger net adds in Jan-Feb 09; 2) potential benefits from a revamp in spectrum fees; and 3) easing competition. However, our key concern is that usage in commodity-driven areas has softened. Our forecasts remain unchanged but we are raising our DCF-based target price from Rp7,300 to Rp8,500 after lowering our WACC assumption to 12.3% from 13.1% on lower competitive risks and the possibility of a new spectrum fee regime. Telkom's forward P/E has surged from a sharp 25% discount to a 10% premium over the JCI, and near its previous peak of 20%, suggesting that further outperformance prospects are diminishing.

CIMB Enseval Putera Megatrading

Result note - Amazingly attractive - by Erwan Teguh
(EPMT IJ / EPMT.JK, OUTPERFORM - Maintained, Rp435 - Tgt. Rp715, Healthcare)

Enseval's FY08 net profit was Rp267bn, up 15% yoy on 16% sales growth, with core profit of Rp254.4bn forming 106% of our forecast on higher-than-expected margins. Net cash more than doubled to Rp306bn or Rp134/share, or over 30% of its share price, courtesy of better working-capital management and strong operating cash flow. We increase our earnings estimates by 12% on 50bp higher EBIT margin assumptions. Maintain Outperform with a higher target price of Rp715, up from Rp600, applying a 40% discount to our P/E target for Kalbe, which implies 4.6x CY10 earnings. Maintain Outperform.

CIMB KLBF Result note - Restoring confidence

Result note - Restoring confidence - by Erwan Teguh
(KLBF IJ / KLBF.JK, OUTPERFORM - Maintained, Rp630 - Tgt. Rp825, Healthcare)

Kalbe's FY08 net profit of Rp707bn on 12.5% sales growth and core profit of Rp672bn were in line with our forecasts and consensus. Aside from the embattled energy drinks business, key businesses grew 12-21%. Cash grew to Rp1.45tr (+12% yoy) on better working-capital management. An aggressive share buyback, which has used up Rp350bn, resulted in 5.7% of outstanding shares bought back by end-2008. We have raised our earnings estimates by 4-10% on higher sales growth estimates and upgraded our DCF-based target price to Rp825 from Rp650. Maintain Outperform.

Mandiri Sekuritas BUMI Higher market tolerance

Higher market tolerance

On valuation metrics, Bumi is the cheapest among its Indonesian peers in EV/reserves, and PE. However, there is a concern on so called ‘corporate governance’. We define ‘corporate governance’ as market tolerance toward perceived unfair treatment. We think this will improve as time passes, and BUMI exercises ‘damage control’ PR campaigns. On DCF basis, applying WACC of 16.7% and cost-of-equity at 20.2% plus its acquisitions priced at NPV of purchase value and using cost of equity as discount rate, we arrived at a fair price of Rp1,056/share. At this price, BUMI is trading at 4.2x 2009F PE and 3.3x 2009F EV/EBITDA, still a steep discount to current 2009F market PE of 9.1x. We’re reinstating our recommendation with a Buy.

Our 2009 forecast vs BUMI’s guidance: lower than company estimates. BUMI expects 2009 coal price at mid-to-late US$60/ton with production cost expected to fall 10% from US$33/ton, a 50% margin. Production and sales volumes are expected to rise by 10%. Meanwhile, we expect 2009 volume sales to increase 6.0% to 54.6mn tons from 51.5mn tons in 2008, with average price of US$58.6/tons, and production cost of US$26.5/tons, or 48.5% margin.

Our 2009 net income: US$433mn, on pretax of US$880mn, with potential upside from lower tax. According to Bloomberg consensus for 2009, Bumi’s pre-tax profit is expected to be US$975mn, with net income of US$429mn. Potential upside surprise lies in a potential reduction of income tax. Currently our esti mates assume 51% income tax, vs. consensus of 56%. The government has reduced corporate tax level from 30% to 28%, and also applied another 5% reduction for listed companies with 40% public ownership. Therefore, we see other potential upside to our estimates if tax rate applied is lower than ours and consensus.

Reinstating recommendation with Buy at Rp1,050/share target price. Our previous ‘Not rated’ recommendation was based on doubt of valuation effectiveness if market is still nervous on perceived unfair treatment to minority shareholders. However, unless other surprises arise, we see signs of stabilization and acceptance. Discount over peers still has to be applied. Our target price of Rp1,050/share, implies a 2009F PE of 4.2x, a 25% discount to its 4 peers (Indotambang, Bukit Asam, Adaro, and Indika) average 2009F PE of 5.6x.

Bloomberg U.S. Stocks Gain, Extend Global Rally; Treasuries, Dollar Fall

April 2 (Bloomberg) -- U.S. stocks rallied, extending a global advance, as world leaders agreed on measures to fight the recession and accounting regulators approved a rule change that may boost bank profits. Oil rose the most in three weeks, while the dollar and Treasuries fell.

Caterpillar Inc., Walt Disney Co. and DuPont Co. climbed more than 7.5 percent amid growing speculation the world economy is stabilizing. Wells Fargo & Co. increased 5.9 percent and Goldman Sachs Group Inc. gained 3.6 percent after the Financial Accounting Standards Board voted to relax so-called fair-value rules. Benchmark indexes jumped even as new claims for unemployment insurance benefits swelled to a 26-year high.

The Standard & Poor’s 500 Index rose 2.9 percent to 834.38. The Dow Jones Industrial Average added 216.48 points, or 2.8 percent, to 7,978.08. Both closed at their highest levels since the second week of February. Europe’s Dow Jones Stoxx 600 rose 4.9 percent. The MSCI Asia Pacific Index soared 4.8 percent.

“Right or wrong, the belief is we may have seen the worst of the economic side of things,” said William Stone, the chief investment strategist in the wealth management unit of PNC Financial Services Group Inc., which oversees $110 billion in Philadelphia.

G-20 Meeting

The Group of 20 policy makers, meeting in London, pledged more than $1 trillion in aid to revive the global economy. They boosted the resources of the International Monetary Fund and offered cash to revive trade, while sidestepping the question of whether to deliver more stimulus in their own economies. The G- 20 also called for stricter limits on hedge funds, executive pay, credit-rating companies and risk-taking by banks.

The U.S. needs to borrow $3.25 trillion for the fiscal year ending Sept. 30, including sales to replace maturing securities, according to Goldman.

The MSCI Emerging Markets Index rose 5.9 percent to an almost six-month high on speculation more countries may follow Mexico in taking advantage of new loan conditions from the International Monetary Fund. more...

Reuters Oil jumps nearly 9 percent as G20 deal boosts markets

NEW YORK (Reuters) - Oil rose nearly 9 percent to top $52 a barrel on Thursday, in line with a broad rally in global markets on hopes actions agreed at the G20 summit in London would restore global growth.

World leaders agreed a trillion-dollar deal to combat the deepest economic downturn since the Great Depression, and signed off on plans to commission blacklists of tax havens and tighter rules for hedge funds.

U.S. stock markets jumped after the deal and on changes in bank accounting rules.

U.S. crude settled at $52.64, up $4.25, or 8.78 percent. London Brent crude gained $4.31, or 8.9 percent, to settle at $52.75 a barrel.

"The current crude oil market rally is associated with some optimism and expectations emerging from the G20 meeting in London," said Kyle Cooper, director of research at IAF Advisors in Houston.

"However, rising oil prices right now are not based on fundamentals as worldwide demand is still poor while inventories are high."

The economic crisis has battered global oil demand, pushing prices off record highs over $147 a barrel hit in July and sending inventories in top consumer the United States to a 16-year high.

The head of the International Energy Agency said the energy advisor to 28 developed nations is likely to cut its global oil demand forecasts in light of more bleak economic data.

"We now have data from not only the IMF, but also the OECD. They all look gloomy," Nobuo Tanaka, the agency's executive director, told Reuters in an interview on the sidelines of a Paris conference.

"Inevitably, the possible downward revision could be significant, but I cannot say how big."

OPEC kingpin Saudi Arabia expects demand from developed countries to decline further, but global demand may revive this year if the economy improves, an oil official said.

"This pattern of decline within industrialized economies is expected to continue even after the global economic crisis is over," said Ibrahim Muhanna, adviser to Saudi Arabia's petroleum and mineral resources ministry.

OPEC Secretary General Abdullah al-Attiyah said the cartel may be able to live with oil prices around $50 a barrel in 2009, another sign the group has limited its price aspirations for now.

U.S. Labor Department data showed the number of U.S. workers filing new claims for jobless benefits unexpectedly rose to its highest level in over 26 years last week and so-called continued claims jumped to a record high in March.

(Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons in New York, Christopher Johnson and Alex Lawler in London and Osamu Tsukimori in Tokyo; Editing by David Gregorio)

ABC News Dalrymple Bay coal shipments spike

The month of March saw a jump in the amount of coal being shipped out of one of Australia's largest coal terminals.

But Babcock and Brown Infrastructure says the increase is not necessarily a sign that the industry is bouncing back.

Spokesman Greg Smith says in the past month 3.4 million tonnes of coal was loaded onto ships at Dalrymple Bay, south of Mackay in north Queensland.

That is up almost a million tonnes from previous monthly totals.

"I think this is a demand spike because we're not seeing the same number of vessels allocated or proposed for April - so there is a bit of a drop off in April," Mr Smith said.

"So this would seem to be more of a pattern of a demand spike every eight weeks or so based on replenishment of steel mill inventories."

In addition, Mr Smith says says extreme weather affected the amount of coal being loaded at Dalrymple Bay.

He says the figure would have been much higher if Cyclone Hamish had not hit last month.

"All of the ships at the anchorage sailed to more peaceful waters and although the effects of the cyclone were quite minimal in terms of weather, it did take a few days for the ships to sail away and then return," he said.

"So there were limited opportunities within those days to be able to load ships."

Source: ABC

The Star CPO, tin and rubber may rebound in Q2

CPO, tin and rubber may rebound in Q2 by Hanim Adnan Petaling Jaya

Crude palm oil (CPO), tin and rubber prices may experience minor rebounds in the second quarter this year but could find it difficult to secure a stronger footing on shrinking demand, given the global economic crisis.

Analysts are projecting CPO prices in this quarter to range from RM1,500 to RM2,100 per tonne, easily over 50% lower from RM3,400 to RM3,600 a year ago.

Tin, which has fallen 56% to US$10,527 per tonne on the KL Tin Market (KLTM) on March 31 from its record at US$24,040, is expected to trade above US$11,000 this quarter on tight supply and declining stocks in London Metal Exchange (LME) warehouses.

Malaysia’s SMR 20 and latex-in-bulk prices are expected to stabilise above RM5 and RM3 per kg following the move by world rubber producers – Indonesia, Thailand and Malaysia – to cut exports by up to 20% this year to support the commodity’s price.

Macquarie, in its Asean plantation report, said the next price direction of edible oils, including CPO, would depend on the extent of demand recovery as well as weather conditions during the planting season for its competitor, soybean, in the United States.

The latest positive news is that the US Department of Agriculture (USDA) indicated that the 2009 planting prospects are at 76 million acres, lower than street estimates of 79.2 million acres.

USDA also reported lower soybean stocks of 1.3 billion bushels as at March 1, slightly lower than street expectations of 1.32 billion bushels.

HwangDBS Vickers Research expects CPO to average RM1,900 per tonne in 2009, supported by slower soybean output supply growth, while the La Nina’s effects in South America could offset the anticipated jump in soybean output in the US.

During the first quarter, CPO managed to hold its fort well, especially in March, with prices trading at RM1,900 to RM2,000 per tonne from RM1,700 to RM1,850 in January.

This is attributed to the declining Malaysian Palm Oil Board palm oil stocks at 1.56 million tonnes as at end-February, better exports and active replanting activities.

As for rubber, its first-quarter prices were mainly supported by the prospects that the three major rubber-producing nations, which account for 70% of world output, would possibly remove 1.35 million tonnes from the world market this year.

There are also plans to set a fixed floor price of US$1.35 per kg for rubber soon to help shore up prices affected by the ailing global motor vehicle sector and weak crude oil prices.

Another major development is China’s move to stockpile natural rubber (NR) and the possibility of the Chinese government lowering import tariffs on NR.

Meanwhile, the weak tin price on KLTM in the first quarter was within market expectations, averaging at US$10,931 per tonne.

However, analysts expect tin fundamentals to remain strong on tight supply and a possible deficit this year.

Demand may be slowing in the US but many opine the low tin prices on LME will rebound before year-end.

LME warehouse inventories for tin have fallen to the lowest level since July 2005 by 500 tonnes to 4,080 tonnes.

Output from Indonesia, the world’s leading tin producer, is falling drastically due to the clamping down on illegal miners while the world’s second-largest tin producer, China, is tightening its exports.

Crude palm oil futures at 6-month top on surging oil

Malaysian crude palm oil futures soared 5.1 per cent to a fresh 6-month peak yesterday, boosted by rising oil prices and fears of a supply squeeze, traders said.

The benchmark June contract rose as much as RM105 to RM2,175 per tonne before the close, a level unseen since September 29, 2008, before settling at RM2,159, up 4.3 per cent.

“The palm oil market is on a ball as all commodity complexes are looking at the G-20 meeting, taking a cue from the big jump in crude oil prices,” said a trader with a local commodities brokerage.

Oil rose more than US$2.50 per barrel to above US$50 yesterday as rising equities markets bolstered sentiment before a meeting of G20 global leaders which investors hope will deliver measures to restore global growth.

Traders said a recovery in Malaysian palm oil shipments could see domestic inventories in the world’s second-largest producer
fall sharply. Cargo surveyor Societe Generale de Surveillance reported a 5.4 per cent increase to 1,223,716 tonnes in March.

Indopremier SMGR (BUY - TP Rp 4.420)

FY08 result was relatively higher compared to IPS estimate and consensus
Amid global financial crisis, Semen Gresik managed to book gleaming FY08 financial performance which was boosted by strong cement demand in domestic market by 11.4% YoY and better average cement selling price (ASP). We noted that SMGR performance was relatively higher compare to our estimate and consensus by 14.1% - 30.4% and 6.0% - 11.2%, respectively.

Profitability tended to increase
During year 2008, SMGR profitability remained sound and tend to improve which was fuelled by higher ASP in 3Q08 and 4Q08 to offset production cost hike which rose 5.6% QoQ (3Q08) and 3.2% QoQ (4Q08), reaching to Rp 399 thousand/tone and Rp 412 thousand/tone, respectively. It made the company’s gross margin grew by 45% in 3Q08 and 45.8% in 4Q08, after contracted in 2Q08 which was caused by higher production cost (mainly for energy and transportation cost) due to commodities price hike during 1H08.

Cement sector’s growth is projected to slowdown
This year, cement sector is projected to slowdown due to global financial crisis. SMGR management said that domestic cement demand will grow by 0% YoY – 3% YoY attaining to 38.01 million tons – 39.3 million tones and there is no ASP hike. Despite of gloomy in cement outlook, the company plans to raise export volume in FY09 account to 1.5 million tones through acquire foreign cement plant in South-East Asia, i.e.: Malaysia and Vietnam to offset domestic market decline. In addition, we expect that The Government stimulus in infrastructure sector worth of Rp 12.2 trillion would be a catalyst to prop up domestic purchasing power.

FY09 sales only grow by 2.4% YoY
Respond to the FY08 result and SMGR guideline, we evaluate assumptions in SMGR financial performance. For year 2009, we forecast the company’s domestic cement volume will only grow by 0.6% YoY reaching to 16.8 million tones, drop by 0.8% from previously forecast. Meanwhile, export sale is projected to grow 49.4% YoY reaching 1.5 million tones. By Assuming there is no ASP hike in FY09, revenue and EBITDA are estimated to rise by 2.4% YoY and 5.7% YoY coming at Rp 12.5 trillion and Rp 4.1 trillion, respectively.

Improving efficiency through cost management
To maintain its profitability in FY09, SMGR is keen to improve operating efficiency, especially for energy consumption and imported materials through cost management, i.e.:
1. reduce oil consumption to less than 0.5% of total energy usage and coal index consumption;
2. reduce electricity consumption;
3. alternative fuel consumption such as : biomass development.

Valuation
Based on 15.23% WACC assumption in DCF model calculation, we derive new target price at Rp 4,420 per share from previous TP Rp 4,580 per share which reflects 19% upside potential and 10.43x – 2.58x PE-PBV valuation for FY09E. Currently, the counter was traded by valuation PE-PBV09 8.79x – 2.18x. By considering healthy financial condition and net cash, we still maintain BUY recommendation.

CIMB Bank Negara Indonesia Result Rapid cost recovery

Above expectations. FY08 results were above consensus and our expectations, on better-than-expected operating expenses. Net and core profits were 119% and 120% of our forecasts, respectively.

Rapid cost recovery. BNI’s cost recovery was faster than we expected. The bank managed to slash its FY08 operating expenses by 5% yoy by streamlining its operations and organisation. Cost-to-income ratio rapidly dropped to 54% from 66% in FY07.

In-line provisioning. The bank booked Rp4.4tr of provisioning expenses, in line with our expectations. It wrote off Rp4.2tr of NPLs in the year, vs. Rp0.8tr in FY07, bringing down its NPL ratio to 5.0% from 8.5%. Coverage was maintained at 102%. Management explained that most of the write-offs were related to loans originated before 2004, and further write-offs in 2009 are possible. We have factored in Rp4.4tr of provisioning expenses in 2009, in anticipation.

Operating performance continued to improve. Loans grew 26% yoy, led by corporate loans, followed by the small and medium segments. Deposits grew slower, at 12% yoy, lifting the loan-deposit ratio to 69% from 61%. Low-cost deposit ratio was maintained at 58%.

Upgrade to Outperform from Neutral. We have adjusted our cost assumptions following BNI’s rapid improvement, raising our FY09-10 EPS estimates by 1-27%. We also introduce FY11 numbers. Our target price has been raised to Rp930 from Rp870, still using DDM with a discount rate of 16.4%. We upgrade the stock to Outperform as we expect it to perform better on the back of the better-thanexpected results. BNI has been performing in line with the market since our last downgrade to Neutral, but underperforming peers by 4-19%. Its valuation gap with Mandiri has widened. An improved risk appetite among investors should also widen their reach to stocks with higher risk profiles like BNI.

Goldman Sachs Bank Rakyat Indonesia Above expectation on lower provision NIM contraction a concern

What surprised us
BRI reported its FY08 net earning of Rp 5.96 tn, 6% higher than our/Reuterbased consensus forecast.

On the positive side: (1) Improved liquidity, LDR 80% (90% if including government re-cap bonds), thanks to its strong deposit growth (15% qoq); (2) FY08 provision expense was Rp 2.8 tn, down from our forecast of Rp 3.7tn; NPL ratio at 2.8%. However, NPL coverage ratio slightly dropped to 177% (from 198% in 3Q08).

On the negative side: (1) NIM declined 43bps to reach 10.2% FY08 due to higher deposit cost; BRI aims to keep its NIM at 9%-10% in 2009; (2) CAR dropped to 13.2%, tier 1 ratio 11.8%; BRI stated it is in talks with its key shareholder (e.g., government) to potentially cut the dividend payout to preserve more capital in-house; (3) NPL in corporate / commercial loan slightly rose, in line with industry trend, echoing our cautious view on potential asset quality deterioration in the wholesale banking sector.

What to do with the stock
We maintain Buy and 12-m Camelot-based target price of Rp 5,500 (2.7X ‘09E BVPS), as we still prefer its domestic, micro/retail-focused business model. Downside risk is severe NIM contraction from low loan pricing.

AAA SEMEN GRESIK Manage to live with a Flat Growth

Stable Revenue Growth
New Capacity expansion
Efficiency Initiative to manage profitability
Maintain Buy

At the end of 2008, SMGR achived revenue growth as 27% yoy or Rp. 12,2 tr. This number was slightly above our expectation at Rp. 10, 6 tr. The growing of company's revenue was backed by the increasing of volume sales as 3% yoy to 17,6 mn ton and also the increasing of average selling price as 23% yoy to Rp 691 th /ton.

Compare to national cement volume consumption growth in 2008 as 11,5% yoy, SMGR volume sales growth by 4,2% yoy shown below average industry. In our opinion, the lower volume growth compare to industry, was caused by SMGR limited capacity. Recently SMGR operate in full capacity in term of utilization rate as 98,1%. This would limit SMGR ability to fullfil the national consumption growth. Thats why, increase capacity by building a new cement factory was an important thing for the company to growth in a sustainable way.

SMGR also have an initiative efficiency program to manage its cost structure. The efficiency program consist of decreasing coal index consumption, start using alternative energy, decrease electricity consumption index, substitution of raw material with a lower price, improve maintanance system to manage cost, including packaging cost etc. With all of these consideration, company hope that the cogs/ton
would growth more or less as much as inflation rate around 7%-8% at the end of 2009.

Preasure of constant negative news in capital market for several month ago, impact on SMGR relative valuation reflected in trailing PER. In a normal situation SMGR usually trading at 18X compare to recently SMGR PE around 8X. When the global economic worsening fade out in the end of 2009 and going to be recovery expected in 2010, we hope that equity market start to be in a normal ralative valuation next year. With this considaration we keep to recomend Buy for this stock with TP at Rp. 7,100 for long term investment horizon.

Lautandhana from Daily Update

Data Penjualan rumah dan Peraturan Perbankan Baru Menjadi Driver Penguatan Indeks. Bursa AS kembali melanjutkan penguatannya pada perdagangan tadi malam merespon baiknya data penjualan rumah dan spekulasi akan adanya perubahan peraturan pada peraturan akuntansi mark-to-market pada sector perbankan untuk menilai asset bermasalah mereka. Indeks Dow Jones menguat 152,68 poin atau 2%. Saham-saham perbankan memimpin penguatan indeks, American Express naik 5,9%, Citigroup dan JP Morgan menguat lebih dari 5,8%.

Bursa Eropa ditutup menguat merespon baiknya data-data ekonomi AS. Saham-saham perbankan memimpin menguatan seperti ING Naik 8,4%, Barclays naik 6,1%, Credit Suisse naik 5,9%. Penguatan juga ditopang oleh Vodavone yang meingkat 4,4%.

Bursa Asia pagi ini bergerak positif terimbas sentiment positif bursa AS. Nikkei terpantau menguat 3%, Kospi naik 2,2%, St Times naik 2,4%, dan KLCI naik 0,9%.

Bursa Indonesia hari ini diperkirakan akan dapat melanjutkan penguatan terimbas baiknya laporan keuangan emiten 2008. saham sector batubara masih dapat dikoleksi terkait baiknya kinerja seperti BUMI, PTBA, sementara saham sector CPO yang relative murah adalah UNSP dan TBLA yang dapat mulai dikoleksi.


Dividen Bakrie Plantations (UNSP) 30%
PT Bakrie Sumatera Plantations Tbk akan mengalokasikan dividen sebesar 30% dari perolehan laba bersih 2008 yang sebesar Rp173, 56 miliar. Besaran dividen yang akan dibagikan relatif tidak berubah dibandingkan dengan tahun sebelumnya.

Antam (ANTM) jajaki beli Newmont
PT Aneka Tambang Tbk jajaki pembelian 17% saham PT Newmont Nusa Tenggara, menyusul kemenangan pemerintah Indonesia dalam pengadilan arbitrase sengketa divestasi saham perusahaan itu. Direktur Utama Antam Alwin Syah Loebis menuturkan perseroan akan masuk menjadi pembeli saham Newmont apabila harganya sesuai.

Trading Counter: ADRO, BUMI, PTBA, UNSP, TBLA

CIMB Quick Takes – Energi Mega

Quick Takes – Energi Mega – Affected by low oil prices & high interest costs
Energi's FY08 core profit of Rp46.74bn was 83% below our expectation due to lower-than-expected sales and gross margins, and higher interest expenses. FY08 sales were up 63% yoy, while EBITDA was up 174% yoy. However, net profit was hit by a jump in interest expense. Energi's FY09 earnings should continue to be affected by low oil prices and high interest costs. We are ceasing coverage of the stock with immediate effect due to a lack of institutional interest, and consensus estimates. Our current forecasts do not incorporate this latest set of results. Our last rating for the stock was Neutral with a target price of Rp150, based on DCF valuation (discount rate of 14.0%).

Bloomberg Toyota’s U.S. Sales Decline Less Than Forecast; Shares Surge

April 2 (Bloomberg) -- Toyota Motor Corp.’s U.S. sales fell less than analysts predicted last month as the world’s largest carmaker offered near-record incentives to spur demand. The stock rose to the highest in almost five months.

Toyota’s U.S. sales dropped 39 percent in March compared with the 41 percent decline expected by analysts in a Bloomberg survey. The carmaker’s incentives per vehicle jumped 88 percent to $1,600 from a year ago, according to Edmunds.com.

U.S. industrywide sales fell 37 percent from a year earlier, though they rose from February’s 27-year low on higher incentive spending, pent-up demand and signs the U.S. government will move to stimulate auto purchases. Honda Motor Co. and Nissan Motor Co.’s stocks also gained as they beat analysts’ expectations and took market share from U.S. rivals.

“The sales rate wasn’t as bad as we expected, and it may be we’ve finally hit the bottom,” said Wes Brown, a market researcher at Iceology, a consulting firm in Thousand Oaks, California. “People are sitting on the sidelines, waiting for a
reason to get back in and buy.”

New autos sold at an annual rate of 9.86 million units, according to sales tracker Autodata Corp. of Woodcliff Lake, New Jersey. That beat the average estimate of 8.8 million of 8 analysts in a Bloomberg survey and was an improvement from February’s 9.1 million rate.

Honda’s sales fell 36 percent and Nissan posted a 38 percent decline. Hyundai Motor Co. had a 4.8 percent decrease. Toyota rose to 3,450 yen, up 180 yen, at 9:51 a.m. in Tokyo Stock Exchange trading. Honda’s shares rose 6.7 percent to 2,635 yen and Nissan gained 9 percent to 420 yen in Tokyo.

CITI Flash: Bumi Resources (BUMI.JK): Sell: A Seemingly Good 4Q08 But Look Closer 4Q08 operating profit disappoints

Flash: Bumi Resources (BUMI.JK): Sell: A Seemingly Good 4Q08 But Look Closer 4Q08 operating profit disappoints - cost ↓, but volume missed - Bumi's 2008 net profit of US$645mn came in 23% above our estimates but largely helped by lower-than-forecast tax (9% eff. rate vs. our forecast of 30%). Operating profit (US$1.1bn), a better gauge on performance, was 9% below our estimates, largely reflecting the lower-than-expected 4Q08 sales volume. On a more positive note, production cost improved reflecting the drop in oil price.
Balance sheet conundrum - Net debt stood at US$1.34bn at end of 2008 (vs. our est. of US$1.6bn). While this is seemingly positive, the difference was due to the unexercised share-buyback plan and should have resulted in an even lower gearing, in our estimates. We expect net debt to further rise in 2009 as Bumi completes the third acquisition (Pendopo).
'09-11E outlook: lower oil helps… - Softer oil price outlook (vs. 2008) and lower gearing will help support earnings; factoring in Citi's latest oil price forecast sees our Bumi 09E estimates up by 73% and DCF-based TP up to Rp580 (from Rp470 previously).
…but coal price still the key earnings risk - Despite recent settlement between Xstrata and Chubu at US$70/t (in-line with Citi's forecast), outlook on coal price remains uncertain, hence posing a key earnings risk - we estimate earnings to fall 3-4% for 1% drop in coal price from our base-case assumption.
Maintaining Sell - Despite the positive earnings adjustments, balance sheet risk remains, warrants a discount - at 4.9x PE Bumi trades in-line with peers.

Adira Finance Bagi Dividen Rp 510

Jakarta - Pemegang saham PT Adira Dinamika Multi Finance Tbk (ADMF) telah menyetujui agenda pembagian dividen tahun 2008 sebesar Rp 510 per saham. Jadwal pembagian dividen direncanakan Mei 2009.

"Pemegang saham telah menyetujui agenda pembagian dividen sebesar Rp 510 per saham," ujar Presiden Direktur ADMF, Stanley Setiaatmadja usai RUPS Tahunan di Hotel Nikko, Jakarta, Rabu (1/4/2009).

Stanley menjelaskan, tahun 2008 perseroan membukukan laba bersih sebesar Rp 1,02 triliun atau laba per sahamnya sebesar Rp 1.020.

"Dividen yang akan dibagikan sebesar 50% dari laba bersih. Rencananya jadwal pembagian dividen akan dilakukan pada Mei 2009," ujar Stanley. more...

Reuters Wall Street rallies on manufacturing and homes data

NEW YORK (Reuters) - Stocks climbed on Wednesday as factory and home sales data raised hopes the economic downturn is moderating, sparking a broad advance.

Big manufacturers and their suppliers, such as Caterpillar Inc (CAT.N) and US Steel Corp (X.N), rose sharply after data showed factory activity in March fell at a slower rate than the month before, while pending home sales rose more than expected in February.

The data was enough to counter a report that showed U.S. private-sector job losses accelerated in March to 742,000, heightening concerns ahead of the government's monthly payroll numbers on Friday.

The housing and factory data pointed to "an economy that fell off a cliff (and) that may have found a bottom," said Linda Duessel, market strategist at Federated Investors in Pittsburgh.

"Because we fell off a cliff, you need to get a lot of diverse areas telling us it's not as bad this month as it was last month and that's what's happening."

The Dow Jones industrial average .DJI gained 152.68 points, or 2.01 percent, to 7,761.60. The Standard & Poor's 500 Index .SPX added 13.21 points, or 1.66 percent, to 811.08. The Nasdaq Composite Index .IXIC climbed 23.01 points, or 1.51 percent, to 1,551.60. more...

Business Times North Americans consuming more palm oil

Malaysian palm oil exporters are benefiting from the US recession, as cost-conscious Americans buy more ready-to-eat meals that are mainly cooked in palm oil and margarine.

Demand for palm oil is also rising when more authorities in the US ban artificial trans fats after medical tests linked it to heart ailments, Malaysian Palm Oil Council (MPOC) deputy chief executive Dr K. Sundram said.

“Artificial trans fat is proven to increase the risk of heart attacks and strokes. Many food companies in the US and Canada are voluntarily switching to natural palm oil and bakery fats that are trans fat free,” he said.

Sundram said many food companies choose palm oil because in its natural form, it can straight away be made into bakery fats. Palm stearin formulations, which can withstand high heat of 200°C, have good baking characteristics.

New York City started the ball rolling, and now California has also declared that by January 2010, all 88,000 restaurants in the state will be prohibited from using partially-hydrogenated soft oils that contain artificial trans fats.

“In view of California’s compliance deadline, we’re hopeful of more demand for palm oil and fats in the second half of this year. We should be able to export 1.1 million tonnes of palm oil to the US this year, 10 per cent more than last year,” Sundram added.

In a separate interview, IOI Group’s Loders Croklaan vice-president of research and development and marketing Dr Gerald McNiell confirmed that its operations in Chicago and Toronto are benefiting from these trends.

He said North American consumers are dining less often at restaurants, choosing instead to save costs by cooking at home. They buy more ready-to-eat meals, which are mostly cooked in palm oil and shortening.

Loders Croklaan’s non-hydrogenated, trans-free SansTrans brand was launched in 2003, and by 2006 more than 30 new products based on palm oil had been developed for the US market.

Last year, the company sold 250,000 tonnes of SansTrans in North America. McNiell hopes to increase sales by 10 per cent to 275,000 tonnes this year.

Since New York City’s ban on trans fat last year, Loders Croklaan has sold more SansTrans shortenings there to bakeries and restaurateurs for use in cakes, pastry, cookies, biscuits, candies, icing cream, pie crust, and pizza dough.

McNiell said these achievements were not easy, as palm oil in general had to overcome decades of negative perception and propaganda before it won over North America’s baking and confectionery community, and its customers.

CIMB Bank Negara Indonesia Result note - Rapid cost recovery

Bank Negara Indonesia
Result note - Rapid cost recovery - by Mulya Chandra CFA
(BBNI IJ / BBNI.JK, OUTPERFORM - Upgraded, Rp720 - Tgt. Rp930, Financial Services)

BNI's FY08 results beat consensus and our expectations, on a rapid cost recovery. The bank managed to slash its cost-income ratio to 54% from 66% in FY07. Provisioning expenses were in line and we have factored in Rp4.4tr for 2009 in anticipation of more write-offs. We raise our FY09-10 EPS estimates by 1-27% on a faster cost recovery, which raises our DDM-based target price to Rp930 from Rp870. We upgrade the stock to Outperform from Neutral as its valuation gap with Mandiri has widened, offering the prospect of BNI tracking Mandiri's recent good share-price performance.

UBS Investment Research - PGN 2008 results announcement delayed

2008 results announcement delayed

PGAS to seek FX loss capitalisation
PGAS’ management has announced a delay in the 2008 results announcement, as the company is waiting for approval from the Indonesian Financial Accounting Standard Board (IFASB) to capitalise part of its 2008 FX loss. According to management, the IFASB allows translation loss to be capitalised in periods of extraordinary currency fluctuations.

Timing of announcement and amount to be capitalised are unclear
Several things remain uncertain such as: 1) the length of the delay. Our conversations with management suggest PGAS may announce the results one week after the original schedule of 31 March, but there is scope for further delays. 2) How much of the FX loss will the IFASB allow PGAS to capitalise? We forecast a 2008 post-tax FX loss of Rp1.7trn (54% of core profit).

Positive on dividends, but initial market reaction may be negative
Assuming PGAS’ 2008 FX loss is fully capitalised and a payout ratio of 51% of reported profit as well (historical average), our dividend yield forecast for 2008 earnings would rise from 1.3% to 3.0%. Despite being positive on the dividend outlook, initial market reaction to the news may be negative due to the uncertainties mentioned above.

Valuation: Rp2,500 12-month DCF-based price target for PGAS The share price is 19% below our price target. Our DCF approach uses explicit forecasts up to 2014, with a long-term growth rate of 5% afterwards and a WACC of 15.2%.

Mandiri Sekuritas SGRO Best growth profile

Sampoerna Agro (SGRO)’s FY08 net profit was below consensus estimate but in line with ours. During 2008, SGRO achieved better yield and extraction rate, translating into an 8.0% increase in CPO production to 265k tons. In FY09F, we expect SGRO to have the highest CPO production growth among its peers (7.2% vs average peers of 5.9%). Additionally, SGRO managed to reach bett er gross margin (FY08: 33.8%, FY07: 30.9%) despite sharp increase in fertilizer prices due to support from the plasma component. We reiterate our Buy call with TP upgraded at Rp1,600/share. The stock currently trades at PER09F of 8.7x.

FY08’s earnings in line with ours, but below consensus. With CPO production volume peaking in 4Q08, total production volume in FY08 increased by 8.0% yoy to 265k tons. CPO sales volume surged even higher to 287k tons (+31.0% yoy) which resulted in 43.1% revenue growth to Rp2.3tn in FY08. Bottom-line wise, the company reported FY08 earnings of Rp440bn (+104.3% yoy), 4Q dropped by 37.0% qoq as expected earlier due to lower CPO prices. FY08 net income was in line with our expectations, but 9.4% belo w consensus estimates.

Production cost increase came in below local peers. As of FY08, cost per kg CPO was up by 23.9% to Rp4,800/kg, while its local peers experienced larger increase of 43.5% on average. In spite of high fertilizer cost during 2008, SGRO’s earnings were more resilient to changes in CPO price given support from the plasma component. The cost of fruit purchased from plasma plantations declined with lower CPO prices. Consequently, the company managed to report better gross margin of 33.8% in FY08, up from 30.9% the previous year.

New palm plantings of around 8k ha. Despite its net cash position of Rp426bn (net gearing -27.4%), the company still chose to conserve cash due to current tight liquidity in the financial market. Hence, SGRO indicated only around 8k ha new palm plantings for FY09F, but could be increased to more than 10k ha should market conditions improve. Assuming conservative new plantings of 8k ha, we expect SGRO’s CPO production to reach 285k tons (+7.2% yoy) in FY09F. This CPO production growth figure is higher than its average peers of 5.9%.

Retain Buy rating. We like the stock for its potential CPO production growth and less exposure to foreign denominated debt. We have revised up our earnings estimates by 4.4% and 3.5% in FY09F-10F due to weaker exchange rate assumption (exhibit 2). Maintain Buy at TP upgraded to Rp1,600/share (DCF, WACC: 13.6%, TG: 5.0%).

CIMB Adaro Energy Result note - Superior results

Adaro Energy Result note - Superior results - by Rania Rahmundita
(ADRO IJ / ADRO.JK, OUTPERFORM - Maintained, Rp890 - Tgt. Rp1,030, Basic Resources)

Adaro's FY08 net income surged 10-fold to Rp887.2bn, while core net profit rose 768% yoy to Rp1.69tr, exceeding market and our expectations. Revenue was stronger than expected, cost control was superb and therefore operating profit was superior. Net gearing also dropped considerably. This is a good set of results, which we expect would soften risk perception for investors. We maintain our DCF-based target price of Rp1,030 (WACC 15-21%, LTG 0%) and forecasts pending a conference call with the company on Thursday.

Trimegah AKR Corporindo FY08 Net Profit Hit by Forex

AKR Corporindo (BUY –Rp540) - FY08 Net Profit Hit by Forex

AKRA reported strong FY08 performance triggered by strong performance across all divisions. FY08 revenue increased by 60.7% YoY to Rp9.5tr from Rp5.9tr in FY07. Petroleum sales rose by 93.3% YoY to Rp5.1tr from Rp2.6tr in FY07. Petroleum sales volume grew by 28.6% YoY to 671,752kl. Despite a fall in volume, FY08 basic chemical sales was reported increased by 36.6% YoY to Rp2.1tr on the back of higher margin realization. Sales volume of chemical was down by 2.5% to 883,281 MT in FY08 (vs 906,018 MT in FY07). Manufacturing business also posted strong performance with 64.8% YoY increase in sales, which reached Rp2.1bn. Logistic business increased by 28.2% YoY to Rp291.3bn (vs Rp227.3bn).
FY08 gross profit was up by 40.2% YoY to Rp1.0tr, translating into gross margin of 11.0% (vs 12.6% in FY07). Strong gross performance led to a 57.6% jump in operating profit to Rp619.8bn in FY08 from Rp393.3bn in FY07.
Fluctuation in IDR during 4Q08 has resulted in a Rp149.3bn forex loss. However, AKRA still managed to book 9.8%YoY growth in FY08 net profit to Rp210.0bn from Rp191.2bn a year earlier.

CIMB Bank Rakyat Indonesia Result note - Growth champion

Bank Rakyat Indonesia Result note - Growth champion - by Mulya Chandra CFA
(BBRI IJ / BBRI.JK, OUTPERFORM - Maintained, Rp4,150 - Tgt. Rp5,600, Financial Services)

BRI's FY08 results were slightly above consensus and our expectations, on higher-than-expected other income. Loan growth was 41% yoy, far stronger than the industry's +31%. Quarterly NIM, however, eased to 9.7% from 11.0% in 3Q08 on higher cost of funds. We have raised FY09-10 EPS forecasts by 7% on lower tax rate assumptions, which lifts our DDM target price to Rp5,600 (from Rp5,250). Maintain Outperform, as we expect investors to return to a search for growth after an expected round of NPL hiccups in 1H09.

JP Morgan - Bank Central Asia (BCA) FY08 results Lower tax rate drives earnings surprise

FY08 PAT surprises at 12% higher than our estimate: BCA reported FY08 net profit of Rp5.8T, 12% higher than our forecast and 10% higher than consensus. PPOP was 8.5% higher than our forecast, while PBT was 4% higher than our and consensus estimates.

FY08 tax rate revised to 25% in 4Q, expected to be lower in FY09: 60% of the FY08 net profit variance from our forecast was on account of income tax. BCA provided for a 25% tax rate in FY08 (previously 30%), based on new regulations issued late last year, which allow a 5% rebate for firms satisfying certain conditions, principally that free float be over 40%. BCA is the first company under our coverage to utilize this provision, and management expects the FY09 tax rate to be 23%.

Adequate capacity, no capital-raising seen: BCA raised its loan loss cover to 408% by Dec FY08. Management said it was comfortable that the current 15.6% CAR would leave ample capacity to grow credit in FY09 after considering expected FY09 performance and dividends, and it did not foresee any fresh capital issuance needs.

We believe forecasts need to be revised higher: We expect that both our and consensus forecasts need to be raised on the back of these results to reflect both the healthy operating performance (FY08 interest income 5% higher than forecast), more prudent provisioning, and lower tax rates.

Upside limited by valuation: BCA’s liquid balance sheet and prudent management make it a relatively safe port in the current turmoil, in our view, supporting our OW rating. However, at 3.1x FY09E PBV, BCA’s lofty valuations pose a risk and mayt upside. We raise our Dec FY09 DDM-based price target slightly to Rp3,250 (from Rp3,100), to reflect lower effective tax rates. Our PT is based on a 13% risk-free rate, and an 18.3% cost of equity, translating into a fair FY09E 3.3x P/BV.

JP Morgan - Unilever Indonesia Tbk 4Q08 net income declined by 7.3%

FY08 income in line: Unilever Indonesia reported FY08 net income of Rp2,502B, up 22.5% Y/Y from Rp1,965B in FY07, and in line with both J.P. Morgan’s (96.2%) and consensus’ (98.1%) estimates of Rp2,502B and Rp2,454B, respectively. Most of the gh, however, is generated in 9M08.

Weak 4Q08: Subtracting 9M08 income, 4Q08 net income of Rp360B is down 7.3% Y/Y and 46.9% Q/Q. The reasons for this are: (1) Margin compression as a result of high input cost as oil and commodity prices peaked in 3Q08. (2) Significant increase in SGA expenses, where research expense increased by 54.6%Y/Y from Rp249.9B to Rp386.3B. These caused operating margin to decrease by 406bp Y/Y and 891bp Q/Q.

Concerned about FY09: As mentioned in our report “We see signs of a retail slowdown; downgrade to UW”, 26 March 2009, we are concerned about the potential slowdown in FY09 due to weak consumer purchasing power. During an economic downturnilever Indonesia historically has not been immune as evidenced by slower profit growth. Based on that we think that there is a potential of FY09 being a challenging year for Unilever Indonesia .

Maintain UW and Dec-09 PT of Rp7,000: We maintain our UW rating on UNVR and our DCF-based Dec-09 PT of Rp7,000. Our DCF method is derived using a risk free rate of 13.0%, equity risk premium of 5.5% and terminal growth rate of 7.0%. Risks to our PT: (1) Better-than-expected reported earnings. (2) Defensive trade – bear market continues.

JP Morgan - Bakrieland Development: Forex gain boosts net income

FY08 net income above expectation: Bakrieland reported FY08 net income of Rp272.1B, up 102.8%Y/Y from Rp134.2B in FY07. The reported income was above both J.P. Morgan (128.0%) and consensus (146.6%) estimates of Rp212.5B and Rp185.6B, respectively. Stripping out the forex gain of Rp109.8B, the core net income of Rp187.4B was below our (91.6%) estimate of Rp204.6B, but better than the consensus estimate of Rp175.1B (107.0%).

4Q08 disappoints: Subtracting 9M08 results, 4Q08 core net income of Rp42.1B was down by 6.8% Y/Y from Rp45.1B in 4Q07. The operating profit of Rp58.3B was down by 15.4% from Rp68.9B in 4Q07. This was because of the recent project expansion and upfront build-up, and the immediate recognition in SGA expenses as marketing sales are yet to be recorded as an accounting revenue.

We expect a recovery: With the reduction in interest rates, we expect that marketing sales should start to recover starting 2H09. This should bode well for reported net income 6-12 months down the road. With this, we believe that marketing sales analysis will be more important than accounting sales.

We maintain OW and our Dec-09 PT of Rp250: Due to the recovery in marketing sales driven by lower interest rates, we maintain OW and our Dec-09 PT of Rp250. The operating assets are valued using the DCF method with a WACC of 18.0%. The DCF method is derived using a risk free rate of 14.5%, equity risk premium of 5.5% and terminal growth rate of 8.25%. The NAV method for the landed estate is based on the expected net salable land multiplied by the expected selling price. In addition, we applied a 40% to the NAV to derive our PT to reflect the risk of the recent default of ELTY's parent: Bakrie & Brothers. Risks to our price target are: (1) ELTY using its cash holding to rescue its parent; and (2) a delay in interest rate cut by Bank Indonesia .

UBS UBS Investment Research - Indonesia Market Strategy

Second consecutive month of earnings upgrade

Consecutive earnings upgrade in Feb and March by UBS We upgraded our EPS forecast by 2% and 1% for 2009 and 2010 consecutively in February and March mostly in plantation, auto, telecommunication and property companies. Q4 08 results just out seen stronger than expected operating profits for the banks and consumer companies. Our recent gas -supply chain visit also confirmed strong gas volume sales in the first two months of the year promising further earnings momentum.

Rating change: Bank Rakyat and Indotambang
We have a Sell rating on Bank Rakyat (BBRI) now as we think the bank is one with the highest risk of cash call and earnings disappointment in its sector. We have a Buy rating on Indo Tambangraya now despite the near-term bearish view on coal price as we have high visibility of its earnings in 2009 (87% of sales contracted), net cash balance sheet, good governance and high dividend yield.

Key recommendations: Telkom and PGAS remain our top picks
We saw proofs of more rational competition among cellular operator and cuts in capex plans of its competitor, benefiting Telkom. We took ASII and Danamon off our top pick given their recent strong share price performance. We would like to highlight two mid-cap ideas: Indotambang and Aneka Kimia (AKRA). Three reasons why AKR is attractive: multi-year growth opportunities at its fuel distribution and logistics (currently 45% of EBIT in 08E, 36% EPS growth in 2010E, 17.5% RoE trading at 1.1x PBV).

CLSA Bumi Resources – FY08 results not looking great

Bumi Resources – FY08 results not looking great, accumulating debt (from Olie)

The company posted net profit US$645m in FY08, doubled previous year’s core profit. Reported earning in FY08 was down by 18% YoY due to one-off gain posted in FY07.
FY08 net profit came in 10% below our forecast, though in line with consensus estimates. Operating performance does not look solid, with revenue and operating profit in during the year were 5% and 10% below our and consensus forecasts. The company also posted higher than assumed interest and amortization expenses. Details are not available as yet.
What is more concerning to us is the sustained trend of debt added to the balance sheet, as total debt jumped to US$1.7bn in Dec08, or up by US$600m in 4Q08 alone following US$660m addition in 3Q08.
We think most of the debt addition has gone to investment in Bumi non-core assets, as investment in non-core assets amounting to US$580m in 4Q08. This includes increases investments in oil and gas assets, explorations spending in non-coal business, and higher goodwill.
We retain SELL rating.

CLSA Bank Rakyat (BBRI IJ): not so inspiring

Bank Rakyat (BBRI IJ): not so inspiring …, from Nico Oentung

Our bank analyst Nico Oentung looked at Bank Rakyat (BBRI IJ) FY08 results. Nico lowers his 09-10 earnings by 4-5%, assuming more conservative NIM, slower growth environment, and higher NPL risks. Nico still maintains OPF call and TP Rp4,500.

BBRI booked Rp5.9tn net profit for FY08, which is at first glance in line with our expectations.

HOWEVER …
Results include several one-off items.
There was Rp729bn forex gain due to windfall from wide rupiah/US$ bid-ask spread.
Plus, there was Rp442bn non operating income (accounting adjustment)

Excluding the above one-off, FY08 earnings would be flat YoY and 10% below our estimates. Even comparing against peers such as BCA and Mandiri, BRI's core earnings were also the weakest (pls see the chart below). Is BBRI dressing up earnings to meet consensus (Rp5.7tn)?

Other key takeaways from the report:
Sharp margin contraction a surprise.
NIM declined by 110bp in 4Q08 to 9.1%, the lowest level since 2003.
Funding cost rose sharply, +160bps to 5.8%, while asset yields up by only 30bps.

While interest rates are now trending down, BBRI is now focusing on lower margin loans to state-owned companies and KUR program.

CLSA Adaro Energy (ADRO IJ): good results, but

Adaro Energy (ADRO IJ): good results, but …., from Olie

Given risks associated with BUMI, there is search for a coal stock that is both big and liquid enough. ADRO, Indo’s second largest coal company by production vol, is a natural choice. Liquidity should improve post divestment of stocks by the financial investors, who control 25% stakes in the company and whose lock up period expired in mid March.

ADRO posted strong FY08 results, profit up 10 folds. But, the recent plan to acquire related-party raised a CG issue. Valuation, unfortunately, is not compelling. Stock is at 20% premium (PE and EV/EBITDA) to domestic peers. Maintain UPF rating and TP of Rp750.

Key points from the report:
ADRO posted strong FY08 results, with profit up by ten folds to Rp887bn driven by better than expected coal ASP and volumes.
We keep our forecast for 2009. Adaro starts this year with lower inventory level hence little upside surprise on volume while the company has also contracted 75% of volume this year, which is good, but also suggest there is minimal upside. Impact from coal trading, if any, should be negligible given thin margin.
We think Adaro is an interesting prospect given its size, long-term growth potential, and potential M&A angle.
However, the recent plan to acquire related-party companies up to US$100mn raised corporate governance issue, particularly as question on investment in a related-party asset management firm lingers.
Valuation: does not look cheap, trading at 20% premium relative to PE and EV/Ebitda of its domestic peers. Underperform.

Macquarie Adaro Energy - Time to take profit

We downgrade Adaro from Outperform to Neutral and cut our price target from Rp940 to Rp890. This is to reflect the recent 30% share price rally, oversupplied coal outlook, increased pricing risk, stretched 2010 valuation, poor 2008 FCFE generation, and unproven governance.

Impact
Cautious coal outlook in 2009/10. We believe the coal market will be significantly oversupplied in 2009 and see the potential for supply cuts to be delayed as producers benefit from 2008 high-priced legacy contracts.
Adaro's prices could come under pressure in a loosening market given its relatively low calorific value coal. We highlight that two-tiered market forming with the Japanese paying premiums for Australian high-quality coal, but other negotiations (eg, Korea) being settled below these benchmark levels.
Valuation appears stretched in 2010E, as evidenced by a 13x PER (clean), 2.8% dividend yield and 1% FCFE yield, a 30% premium to the Indonesian average.
Poor FCFE generation in 2008 leading to net debt being US$300m higher than expected. This is due to higher working capital but also a tax liability arising from the former LBO structure valued at US$90m.
IPO skeletons emerge. In our initiation, we noted that Adaro was a good trade but an unproven investment grade company. This has been reinforced by the tax liability that new minorities will have to bear from the former LBO structure valued at US$90m. This is the second adjustment post IPO, after the company revised its intangible accounting policy.

Earnings revision
We downgrade our 2009 earnings estimates by 8%, reflecting a slightly lower realised price and higher cash production costs. The higher-than-expected net debt is the predominant cause for the change to our valuation.

Price catalyst
12-month price target: Rp890 based on a DCF methodology.
Catalyst: + Strong 2009 results; - Related party acquisition; - Spot price weakness.

Action and recommendation
We downgrade Adaro from Outperform to Neutral and cut our price target from Rp940 to Rp890. This is on the back of the expensive 2010 valuation, increased pricing risk and higher-than-expected net debt in 2008.

CIMB UNSP Result note - Dissapointing year

Bakrie Sumatra Plantation
Result note - Dissapointing year - by Liliana Bambang
(UNSP IJ / UNSP.JK, UNDERPERFORM - Maintained, Rp310 - Tgt. Rp305, Plantations)

UNSP's FY08 core earnings were significantly below our forecast and consensus by 27% and 31%, respectively, due to: 1) a higher-than-expected tax rate of 38% vs. our estimate of 30%; 2) Rp243bn of forex losses; and 3) Rp79bn of losses in subsidiary, Agri BV. Net gearing also shot up to 60% in 2008 from 28% in 2007. We are maintaining our earnings estimates pending details on the subsidiary's losses. For now, maintain UNDERPERFORM.

CIMB BUMI Result note - Quarterly improvement

Result note - Quarterly improvement - by Rania Rahmundita
(BUMI IJ / BUMI.JK, UNDERPERFORM - Maintained, Rp820 - Tgt. Rp770, Basic Resources)

Bumi's FY08 core net profit grew 96% yoy to US$644m, in line with our forecast, but ahead of consensus by 5%. 4Q08 EBIT rose 11% qoq and EBIT margins expanded to 38% from 34%, albeit negated by a higher tax. Cash also improved qoq, although net gearing climbed yoy. A 30% dividend payout is expected, implying a decent 14% yield. We are keeping our Underperform rating for now, while reviewing our DCF-based target price of Rp770 (WACC 19-24%, LTG 0%) and our forecasts. We are less bearish now as we believe the bulk of the selling pressure is over.

CLSA Bumi Resources - A closer look on Dec08 balance sheet

Total debt has been on the rise, approaching US$1.7bn as of Dec08. Total debt is now at the highest level ever. Notice the sharp increase in the last two quarters of last year. Investment on non-core assets has soared recently, especially in 4Q08 that went up by US$782m.Investment in non-core assets soared especially in the last two quarters of last year, interestingly occurred as problem at parent started to surface.

Escalating debt level has been one of our key concerns, especially as the debt has been used to finance non-core investments. Further, the acquisitions announced early this year on two coal mines and a mining contractors came as a shocker as valuations look excessive while these deals do not fit into Bumi long-term strategy. We view earnings visibility would be limited until there is more clarity on these deals. SELL.

Indopremier SGRO FY08 Financial Result below our estimates

Despite below-than-expected 2008 results, SGRO still managed to book satisfying result with 43.1% YoY sales growth reached Rp 2.28 tr and net income growth of 104.3% YoY up to Rp 439.5 Bn. Those were respectively 4% and 12% below our estimates versus 4.2% and 8.7% below consensus. While the main differentiated factors were the COGS was 2% above our estimates or rose by 37.1% YoY. Total CPO production in FY08 reached 265,468 tons or grew by 8% YoY and CPO sales volume rose by 31% YoY reached 287,164 tons

Valuation and Projection
Based on our new revised key base assumptions, using our DCF valuation model with WACC of 19.5%, We derive a fair value (TP) of Rp 1,400 per share implying an upside of 10% from last traded price of Rp 1,270. SGRO now is trading at its historical PER of 6.3x (exhibit 3). While based on our EPS 09F SGRO PER traded at 9,5x versus consensus estimate PER 09F of 9,6x above our implied JCI at 8.37x (consensus’s EPS has dropped to Rp 133 from Rp 153 inline with our estimates).

In conclusion, we view that commodity sector has come into stable level and global economic crisis is under controlled. However, current market recovery is in its early stage, susceptible and sensitive to any negative global or regional market sentiment. Hence, we remain neutral on CPO sector. We maintain our HOLD recommendation for SGRO with TP of Rp 1,400 implying PER of 10.5x

Goldman Sachs - China Portfolio Strategy Wait for better entry levels

H-share market: Protect gains as risks of a pullback rise. Following a quiet and directionless February in terms of performance, the H-share stocks broke out from its recent trading range of 6,000-8,000 during the month, surging 14.4% in March to 7,900. In our view, the unexpectedly strong rise was largely attributable to favorable policy responses from the US government and initial signs of stabilization in the US housing and consumption data, and partially attributable to market expectations of sequential improvement of activity data in China. Overall, after examining the various components in our market analytical framework, we feel the market is exposed to the risk of a near-term correction, particularly after the 14.4% rise in March and amid still-weak (albeit less fragile) economic / corporate fundamentals, rising earnings risks, fair valuations, and unsupportive technical factors.

A-share market: Negative tail risks diminish; momentum may fade. Although the annual National People’s Congress (NPC), held March 5-13, did not offer many new policy initiatives to A-share investors, the A-share market (CSI300 index) gained 17% in March spurred on by strong price actions in global equity markets and ongoing investor optimism over policy activity. The major contributors to returns were materials and financials, with the former directly benefiting from a broad-based rebound in global commodity prices and the latter surging on better-than-expected FY2008 results from a large-scale SOE bank and signs of global and China macro stabilization. Going into April, we maintain our view that a tug-of-war between policy activism and lingering global macro headwinds is likely to keep A shares rangebound. However, in light of aggressive policy stimulus (fiscal, monetary and administrative), and the abundant liquidity in the domestic economy we have broadened our expected trading range for CSI300 from 1,800-2,200 up to 2,000-2,600, mainly to accommodate the policy and liquidity factors.

Dow Jones Newswires PT Bumi Resources (BUMI.JK)

JAKARTA (Dow Jones)--PT Bumi Resources (BUMI.JK) said Wednesday net profit fell 18% on year to $645.37 million in 2008 from $789.00 million in 2007.
Indonesia's largest coal miner in terms of output attributed the decline in net to higher tax payment in 2008 which soared to $90 million from $14.65 million in 2007 and an absence of gains from selling assets.
In 2007 Bumi booked $471.61 million in net proceeds from selling a 35% stake in its coal unit PT Kaltim Prima Coal to tata Power.
Analysts said that excluding gains from selling assets in 2007, Bumi's 2008 net profit more than doubled at $645.37 million, compared with $318.39 million a year earlier.
Meanwhile, Bumi's revenue for the year rose to $3.38 billion from $2.27 million likely due to higher coal prices.

Indo Premier UNTR (BUY - TP Rp 7.884)

UNTR - BUY TP Rp 7.884

2 (two) potential upsides
Our current estimates of Rp2.32 triliun (-13%, YoY) net profit and Rp30.6trn (+10%, YoY) revenues, provide two (2) potential upsides. First, from heavy equipment units which has registered higher-than-estimated units sold in the first two months of 2009. With lending rate expected to decrease for the rest of the year possibilities that HE unit can posted higher-than-estimated unit for the rest of the months in 2009. Second, from strenghtening of global coal price that has recovered from this year’s low of US$56/ton. Higher world coal price will support DEJ contract performances (UNTR already contracted coal sales at US$82/ton) and price of the unsold portion. Given these circumstances, UNTR business model (stock note 03/02/2009), and moderate balance sheet (36% debt-to-equity ratio in 2008), reward (and risk) outlook of UNTR deserves investors’ action.

BUY Recommendation
At present, we are comfortable with our current FY2009 forecast that call for revenue of Rp30.6 triliun (+10%, YoY) and net profit of Rp2.3 triliun (-13%, YoY). We will see credit development in 1Q09 that will affect performance of CM division and development of coal price. With WACC of 16.5% and LTG of 3%, our DCF calculation calls for the share price to be valued at Rp7.884 per share. We continue to like UNTR and maintain our BUY rating for the counter.

MacQ Snippets

Snippets:
Mining – Government of Indonesia won over PT Newmont Nusa Tenggara in the International Arbitrage Court in Switzerland yesterday. Newmont must divest 17% within 180 days, otherwise the national court will take over the company’s asset.

Medco Energi (MEDC IJ, Rp2,200, NR) is seeking Rp1.36tn bank loans this year to finance 30% of the total of US$288mn Capex and refinance some of the Rp1.35tn bonds which will mature this July, according to Bisnis Indonesia. Medco’s total debt as of December 2008 was US$693mn, or 26% lower yoy, with Net profit of US$280mn vs US$6.6mn in 2007. This was largely contributed by selling proceeds from PT Apexindo divestment of US$260.5mn. Medco’s revenue grew by 19% yoy to US$1.3bn. The company ceased its Methanol Bunyu operation in February 2009 due to lack of gas supply. In 2008, the field contributed US$38.8mn to Medco’s revenue.

Ciputra Property (CTRP IJ, Rp173, NR) is budgeting Rp300bn of Capex for this year from Rp1.7tn internal cash, to finance construction of Ciputra World, mall and hotels renovation in Jakarta and Semarang. The company targets Rp170bn Net profit in 2009 vs Rp188bn in 2008. 2008 Net profit grew by 135% yoy was driven by IPO proceeds, forex gain, and interest income.

Lippo Karawaci (LPKR IJ, Rp 840, UP, TP: Rp250) booked 5% Net profit growth in 2008 to Rp371bn, driven by both property (apartment, residentials, and malls) as well as non-property (hospital, hotel) divisions.

Sorini Agro Asia (SOBI IJ, Rp 1,050, NR) booked 51% Net profit growth in 2008 to Rp142.5bn. Revenue grew strongly by 43% yoy to Rp1.49tn, resulting in Operating profit growth of 80% to Rp289bn.

MacQ Positive surprise for the plantation stocks (Sunaina Dhanuka)

USDA's planting intentions report surprised the market with soybean acreage prospects coming in about 4% below streeet estimates.While this does not change the demand-supply dynamics for 2009, it does build a bullish case for the edible oils complex for 2010, in a scenario where we can assume the global economy and the demand to recover.

This, therefore, does make a positive case for getting back into the CPO space today. However, we would not recommend investors to go long the entire sector yet, as the actual plantings might turn to be different (more clarity will likely emerge by June) and valuations of some of the companies, especially the Malaysian ones such as IOI and KL Kepong are not cheap by any means.

These names are still trading at mid-teens PER, even after assuming a CPO price of US$750-800/t.

Sunaina recommends that investors look at the cheaper Indonesian names such as Astra Agro Lestari (AALI IJ) and Indofood Agri Resources (IFAR SP), that trade at a 25-40% to the Malaysian names. In Malaysia, our trading pick would be Sime Darby, which is at a 30% valuation discount to IOI and KLK.

MacQ Indosat, unjustified lag to PT Telkom

If and when the Indonesian mobile industry turns the corner (for the better), investors would want to own Indosat as a more leveraged mobile operator compared to PT Telkom. There has been evidence of mobile tariff and capex war receding in the recent months. Mobile tariffs have stopped falling for several months now, while the second and third biggest operator Indosat and Excelcomindo have both announced a more than 40% YoY cut to their 2009 capex budgets. Biggest operator Telkomsel is the only operator boasting a flat capex budget of US$1.5bn, but there is a good chance that Telkomsel would underspend.

In reality, mobile operators do not need to spend a single dime for revenue growth that comes from higher tariffs. Post election in 2010, there is a good chance that Indonesian utility prices (electricity, gas, fixed line telephony) will be on the rise on pent-up tariff increases, such that subtle increases in mobile tariffs are not impossible.

Indosat has lagged PT Telkom by more than 30% in terms of share price since the Qatar Telecom tender offer date, mainly due to selling pressure from event based investors. There is a re-rating potential on Indosat that trades on 10.6x 09 PER and 4.3x 09 EV.EBITDA, versus PT Telkom on 12.0x 09 PER and 5.8x 09 EV.EBITDA, especially when Indosat is showing an improved free cash flow yield (around 7%) after the 2009 capex budget is clarified.

Macquarie research rates the stock a Neutral as Ken Yap (analyst) prefers to wait for turnaround evidence and clarity on management strategy. But I personally think the risk/reward profile could favour the early birds.

Laba bersih per desember 2008 Bumi Resources

Laba bersih per desember 2008 Bumi Resources turun
18,20 persen menjadi $645,36 juta dibanding periode sama tahun sebelumnya
yang meraih laba bersih $789 juta. Keterangan rabu menyebutkan pendapatan
bersih naik jadi $3,37 miliar dari $2,28 miliar dan laba usaha naik jadi
$1,10 miliar dari $405,4 juta. Namun beban lain-lain bersih diderita $74,98
juta dari pendapatan lain-lain $449,4 juta sehingga laba sebelm pajak menjadi
$1,03 miliar dari $854,94 juta. Laba bersih tergerus naiknya beban pajak
menjadi $90 juta dari $14,64 juta dan naiknya hak minoritas atas laba bersih
anak perusahaan yang menjadi $297,3 juta dari $51,29 juta.

FREN Rugi Rp 1 Triliun di 2008

Jakarta - Kinerja PT Mobile-8 Telecom Tbk (FREN) tahun 2008 terpukul tajam. Perseroan membukukan rugi bersih mencapai Rp 1,068 triliun. Demikian disampaikan dalam laporan keuangan yang dipublikasikan, Selasa (31/3/2009).

Pendapatan FREN di 2008 sebesar Rp 731,83 miliar, turun 17,07% dari tahun 2007 sebesar Rp 882,545 miliar. Beban usaha dibukukan sebesar Rp 1,134 triliun, melonjak 59,21% dari tahun 2007 sebesar Rp 712,817 miliar.

Rasio peningkatan beban usaha yang jauh lebih besar dari pertumbuhan pendapatan, menyebabkan perseroan membukukan rugi usaha sebesar Rp 403,05 miliar. Padahal, tahun 2007 perseroan masih membukukan laba usaha sebesar Rp 169,727 miliar. Pos beban lain-lain juga mengalami peningkatan tajam sebesar 586,92% menjadi Rp 775,442 miliar dari tahun 2007 sebesar Rp 112,886 miliar.

Lonjakan pos beban lain-lain terutama disebabkan adanya kerugian derivatif mencapai Rp 142,001 miliar, beban bunga sebesar Rp 367,252 miliar dan rugi kurs yang mencapai Rp 182,759 miliar. Akibatnya, perseroan mengalami rugi bersih mencapai Rp 1,068 triliun. Tahun 2007 perseroan masih membukukan laba bersih sebesar Rp 50,345 miliar.

Posisi laba per saham perseroan juga menjadi minus Rp 52,82 per saham. Tahun lalu, posisi laba per saham perseroan masih sebesar Rp 2,8 per saham.(dro/ir)

Bloomberg U.S. Markets Wrap: Stocks Complete Best Monthly Gain Since 2003

March 31 (Bloomberg) -- Stocks in the U.S. and Europe rose, extending the biggest monthly rally for global equities since 2003, on speculation banks have grown more eager to lend and as investors bought March’s best-performers.

Citigroup Inc., Bank of America Corp., HSBC Holdings Plc and Banco Santander SA gained at least 5 percent after the TED spread, the difference between what lenders and the Treasury pay to borrow for three months, fell to 0.99 percentage point. The Standard & Poor’s 500 Index has surged 18 percent since March 9, the largest 16-day increase since 1982, according to the firm’s index analyst Howard Silverblatt.

The S&P 500 climbed 1.3 percent to 797.87, paring a 2.9 percent advance after Bloomberg News reported General Motors Corp. told dealers that March sales trailed estimates. The Dow Jones Industrial Average added 86.90 points, or 1.2 percent, to 7,608.92. The MSCI World Index of 23 developed markets rose 1.6 percent, extending its gain since Feb. 27 to 7.2 percent, the most for a month in six years.

“We are seeing improvement in credit markets, which should ultimately allow monetary and fiscal stimulus to make its way through to the real economy,” said Greg Woodard, a strategist at Manning & Napier, which manages $16 billion in Fairport, New York. “Everyone knows there’s a lot of cash on the sidelines, and at some point a lot of people are going to be worried about missing the move up.” more...

Bloomberg Agriculture Wheat and Corn

March 31 (Bloomberg) -- Wheat gained the most in almost two weeks after a government report projected a decline in planting and as North Dakota floods may delay spring seeding.

U.S. farmers intend to plant the grain on 58.638 million acres this year, down 7.1 percent from 2008, the Department of Agriculture said today in a report. Rain and snow in the northern Great Plains has caused flooding and muddied fields, possibly delaying the start of spring-wheat seeding next month.

“The wheat acres were a little lower” than expected, said Jason Britt, the president of Central States Commodities Inc. “We very well could see some abandonment in North Dakota. It would not be surprising to see a little bit more of those acres shift to soybeans.”

Wheat futures for May delivery rose 20.25 cents, or 4 percent, to $5.3275 a bushel on the Chicago Board of Trade. The price still is down 13 percent this year, partly on increased global production and declining demand for U.S. grain.

Growers will plant spring wheat on 13.304 million acres, 5.9 percent less than last year, the USDA said in the report. Traders estimated 13.671 million acres would be sown with the spring variety, the average of 11 surveyed by Bloomberg News. more...

Corn prices rose to a 10-week high after a U.S. government report showed demand for the crop used in livestock feed was higher than forecast in the three months ended Feb. 28.

Stockpiles as of March 1 increased 1.5 percent to 6.958 billion bushels from a year ago, the Department of Agriculture said today in a report. Analysts surveyed by Bloomberg News forecast an average 7.012 billion. Corn, also used to make ethanol, is the biggest U.S. crop.

“The quarterly grain stocks were just a little lower than average trade guesses, showing some pretty good feed demand,” said Lawrence Kane, a market adviser at Stewart-Peterson Group in Elmwood, Illinois. “We’re producing maximum meat” from the reduced numbers of animals on feed because producers are selling hogs and cattle at higher slaughter weights, Kane said.

Corn futures for May delivery rose 18.5 cents, or 4.8 percent, to $4.0475 a bushel on the Chicago Board of Trade. Earlier, the price reached $4.06, the highest since Jan. 20. The most-active contract, which rose 13 percent in March, declined 0.6 percent in the quarter, the third straight drop.

Cold, wet weather, forecast in parts of the Midwest and South during the next 10 days, may reduce the number of corn acres, analysts said. Farmers try to finish planting by May 10 to prevent yield losses from extreme heat in July and August, when corn reproduces and fills kernels with sugars and starch. more...

Crude palm oil futures up on exports recovery

Malaysian palm oil futures climbed 1.5 per cent yesterday as exports were seen recovering, although expectations of higher US soya plantings in a report due later yesterday could weigh on global vegetable oil prices.

Prices of palm oil have risen 18 per cent in the first quarter of 2009 on higher crude oil prices and lower output, but have failed to remain above the RM2,000 level on lacklustre exports.

The benchmark June contract on the Bursa Malaysia Derivatives Exchange settled up RM30 at RM2,000 per tonne after going as high as RM2,002.

“Exports were not too bad, the market appears to be in range-bound trading but it may fall if market expectations of higher soya plantings are met when the report comes out later yesterday night,” said a trader with a foreign commodities brokerage.

Other traded months rose between RM18 and RM55. Overall volume was 9,742 lots of 25 tonnes each.

Exports of Malaysian palm oil products for March fell 0.5 per cent to 1,163,008 tonnes from 1,168,539 tonnes shipped in February, cargo surveyor Intertek Testing Services said yesterday.

But another surveyor, Societe Generale de Surveillance, reported 5.4 per cent increase to 1,223,716 tonnes in March.

In the physical market, palm oil for March and April was quoted at RM2,110 and RM2,120 per tonne in the southern region while trades were done at RM2,120.

Business Times Malaysia March palm oil exports down 0.5pc

March palm oil exports down 0.5pc

Exports of Malaysian palm oil products for March fell 0.5 per cent to 1,163,008 tonnes from 1,168,539 tonnes shipped in February, cargo surveyor Intertek Testing Services said today. - Reuters

Bloomberg Indonesia May Cut 2009 GDP Forecast; Urges Concrete G-20 Action - Sri Mulyani interview in London

March 31 (Bloomberg) -- Indonesia said it may reduce its forecast for growth this year as the world economy slows, urging leaders at the Group of 20 summit to come up with “concrete” policies to mitigate the global recession.

Indonesia may cut its 2009 economic growth forecast to 3.5 percent from 4.5 percent, Finance Minister Sri Mulyani Indrawati said in London yesterday, where she is attending the G-20 gathering. That would be the slowest expansion in eight years.
“The expectation is becoming very, very high for the leaders meeting to provide a very concrete action now,” Sri Mulyani said in an interview yesterday. “It’s very important for us to come together and use very valuable time to formulate the policy responses to minimize this severe downturn.”

Leaders of advanced and emerging economies are closing ranks behind plans for tougher rules on financial markets to prevent another collapse like the one that pushed the world into the current economic slump. When G-20 leaders last met in November, the U.S. resisted European suggestions for a single global regulator and government oversight of hedge funds. G-20 countries are also spurring accounting-standard setters to speed up the work of narrowing differences so investors can compare financial statements around the world.

The leaders may agree on the size of fiscal stimulus plans, Sri Mulyani said, without giving details. “It’s time for us not to do the political rhetoric of blaming each other,” she said. Leaders of G-20 nations including Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union, will meet in London on April 2.

For Related News and Information:
For more stories on G-20 and Indonesia
NSE INDONESIA G 20 IN WIRE: BN
Most-read Indonesian stories: MNI INDO 1W Indonesia’s economic data: ECST ID Global economic snapshot: GEW Global foreign reserves statistics: WIRA Writedowns and losses: WDCI Government relief programs: GGRP For stories on Southeast Asia: TOP SAS

--Editors: Stephanie Phang, Margo Towie

To contact the reporter on this story:
Arijit Ghosh in Jakarta at +62-21-3435-3025 or aghosh@bloomberg.net; Elliott Gotkine in London at +44-20-7673-2386 or egotkine@bloomberg.net