[BRIGHT INFO] Our Focus Telekomunikasi Indonesia Tbk PT

We consider TLKM as our sector pick based on following factors. (1) Large cap, Telkom capex US$1.8-2bn in 2009. Meantime, competitors are cutting down on capex, reducing their ability to compete and to expand coverage. (2) Highest dividend payout and yield (3) high free float (4) Stronger net adds in Jan-Feb 09 (5) Potential benefits from a revamp in spectrum fees (6) Easing competition

In FY09, we expect it to have a better subscriber growth. TSEL net add is 4mn which we believe is double than ISAT and EXCL given that in 4Q08, TSEL net adds was 4.7mn while it was only around 1mn for other two operator. 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. Mobile tariffs have stopped falling for several months now.



Our Points:
We are starting positive on Telecommunication Sector, we like TLKM which is slightly below its regional peers, with higher Capex and dividend payout rather than ISAT .
Telkom has strong balance sheet + cash flow to sustain its capex. 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.
We BUY as competition pressure eases, if tariff and Arpu stabilize as expected we believe TLKM will have 22% potential upside idr 8400, 13.0 x PER’09 followed regional peer average.









[Personal Opinion ]
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DISCLAIMER: This report is issued by [BRIGHT INFO]. Although the contents of this document may represent the opinion of [BRIGHT INFO]. We cannot guarantee its accuracy and completeness.

[BRIGHT INFO] Our Focus Pulp and Paper

Buyers report that wood pulp prices have slid to levels last seen in late 2005, triggering a surge in production cutbacks across North America as suppliers look to prop up pulp prices.





Commodity economists say that high production costs, low selling prices and a tighter credit market are squeezing the finances of many pulp suppliers, which are
reducing output in an effort to eliminate inventories in the face of slumping demand and price erosion.


Global market pulp producer stocks fell in February to 47 days of supply (measured as end-ofmonth inventory / 3-months rolling average shipments), down three days from January. The drop in inventory is explained by a moderate sequential rise in pulp shipments (+4%)


European consumer inventory plunged 73,000 tonnes in February to 856,000 tonnes, 198,000 tonnes below February 2008 and the lowest level we have on record. In days of consumption European consumer inventory remained at 23 days of consumption, 7 days below the 30 day 10-year average.

We believe for the long run Pulp and Paper Industry will improving. Pulp sales picked up from the third quarter, and the company also increased pulp exports. PPI Pulp & Paper Week reports that many industry contacts believe U.S. spot prices are approaching a bottom.

As we see pulp price on China and Europe looks stable. After we believe pulp and paper price reach the bottom we think INKP shares will interesting for medium investment. Strong IDR will give positive benefit for that share. INKP Chart (INKP:IJ)













Another Pulp and Paper Shares
(Bloomberg) -- Votorantim Celulose & Papel SA, which is taking over Aracruz Celulose SA to form the world’s biggest supplier to paper companies, was reiterated at “overweight” at Morgan Stanley on the prospect that it will reduce debt in the coming years and benefit from a recovery in pulp prices in 2010. VCP rose 5.9 percent to 14.60 reais






Pulp maker Empresas Copec SA











Clearwater Paper Corp. (CLW US) jumped a second day, climbing 6.4 percent to $8.46. The maker of pulp and paperboard was raised to “buy” from “neutral” by D.A. Davidson & Co.





[Personal Opinion ]
=====================================================================================
DISCLAIMER: This report is issued by [BRIGHT INFO]. Although the contents of this document may represent the opinion of [BRIGHT INFO]. We cannot guarantee its accuracy and completeness.

BI Akan Longgarkan Aturan Kredit Bermasalah

JAKARTA. Bank Indonesia (BI) berniat melonggarkan peraturan tentang kredit bermasalah atau non-performing loan (NPL). Tujuannya adalah mempercepat laju pertumbuhan kredit perbankan di masa krisis.

Gubernur Boediono menyatakan, ketentuan yang akan berubah adalah mengenai keharusan memasukkan kredit yang sedang dalam proses restrukturisasi ke dalam kategori kredit bermasalah. "Para bankir menilai peraturan itu tidak fair. Menurut mereka, restrukturisasi bertujuan untuk menghindari NPL, bukan justru menambah NPL," ujar Boediono seperti dikutip Bloomberg, Selasa (7/4).

Dalam peraturan yang kini berlaku, bank harus menilai kualitas kredit berdasarkan kelayakan debitur, kelancaran pembayaran utang, dan prospek bisnis. BI memperbanyak faktor penilai kualitas kredit itu setelah industri perbankan terguncang krisis pada 1997-1998 silam. Sekadar catatan, sebelum krisis, pengukuran kualitas kredit perbankan hanya berdasarkan pada kelancaran pembayaran pokok utang dan bunga saja.

Jika BI benar-benar mencabut keharusan membukukan kredit yang sedang dalam proses restrukturisasi sebagai kredit bermasalah, itu merupakan pelonggaran kedua di masa krisis. Sebelumnya, BI sudah mengubah ketentuan soal perhitungan kolektibilitas kredit yang bernilainya di bawah Rp 500 juta. Ukuran kualitas kredit yang bernilai kecil sekarang ini kembali pada kelancaran pembayaran utang pokok dan bunga, seperti sebelum krisis.

Para bankir tentu menyambut gembira rencana BI. Direktur Utama PT Bank Mandiri Tbk Agus Martowardojo menjelaskan, kelonggaran peraturan mengenai NPL membuat bank semakin leluasa melakukan restrukturisasi utang.

Para bankir menilai, dalam waktu dekat ini upaya restrukturisasi kredit pasti semakin banyak karena banyak usaha yang terpukul oleh lesunya pasar global. Jadi, perubahan peraturan itu bisa menjaga agar rasio NPL sebuah bank tak membengkak. "Kami bisa merestrukturisasi kredit yang masuk dalam kategori satu, supaya tidak menjadi kredit macet, tanpa harus menurunkan kolektibilitasnya lebih dahulu," kata Agus.

Direktur Utama PT Bank Rakyat Indonesia Tbk. Sofyan Basir juga sepakat dengan pandangan Agus. Dalam peraturan sekarang, bankir tak bisa berbuat banyak untuk mencegah memburuknya kualitas kredit.

Supaya kredit bisa mengalir lebih deras, Agus juga meminta BI melonggarkan aturan tentang Batas Maksimum Pemberian Kredit (BMPK). Pelonggaran itu bermaksud agar bank bisa membantu anak perusahaannya yang kesulitan likuiditas.

Saat ini, bank hanya boleh menyalurkan kredit ke perusahaan afiliasi maksimal sebesar 10% dari modal. Sementara kredit ke perusahaan non-afiliasi maksimal 20% dari modal bank.

Bloomberg Oil Rises More Than $2 as Equity Gains Signal Demand May Climb

April 9 (Bloomberg) -- Crude oil rose more than $2 a barrel as equities gained, signaling that some investors expect economies to stabilize, bolstering energy demand.

Oil climbed 5.8 percent after stocks advanced on better- than-estimated earnings at Wells Fargo & Co. and speculation banks will pass government stress tests. Prices were also higher after a government report showed a smaller increase in U.S. supplies than the industry indicated a day earlier.

“When equities bounce, you see oil, industrial metals and grains lift as well,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “The commodity markets are awaiting the return of global growth, and the stock market is an early signal that the economy is recovering.”

Crude oil for May delivery rose $2.86 to settle at $52.24 a barrel at 2:52 p.m. on the New York Mercantile Exchange. Prices have increased 17 percent this year.

Brent Premium

Brent is trading at a premium of $1.82 a barrel to the West Texas Intermediate contract in New York, swinging from a discount of 43 cents on March 31.

“The WTI-Brent differential does appear to us to be justified by the extreme imbalance” in inventories, Paul Horsnell, head of commodities research at Barclays Capital in London, said in a report today.

Still, Barclays is “not overly concerned about the absolute size of the crude inventory overhang,” saying cuts by OPEC will siphon off the excess.

Crude oil volume in electronic trading on the Nymex was 516,933 contracts as of 3:01 p.m. in New York. Volume totaled 727,517 contracts yesterday, the highest since March 11 and 30 percent higher than the average over the past three months. Open interest was 1.18 million contracts. more...

Reuters US STOCKS-Wall St sets 5th weekly gain on banks, Boeing off late

* Banks rise after Wells Fargo preliminary results

* Retailers gain after sales fall less than expected

* Boeing falls after the bell on profit warning

* Dow up 3.1 pct, S&P up 3.8 pct, Nasdaq up 3.9 pct

* For up-to-the-minute market news click [STXNEWS/US] (Adds Boeing's slide after the bell, weekly percentage gains in the major U.S. stock indexes and volume figures)

By Leah Schnurr

NEW YORK, April 9 (Reuters) - U.S. stocks jumped on Thursday after Wells Fargo said it expects to report a record quarterly profit, fueling a month-long rally prompted by hopes that deterioration in the financial sector was abating.

Wells Fargo (WFC.N) shares shot up 31.7 percent to $19.61 after the bank saw strength in its mortgage banking business as refinancings hit a six-year high. That helped the bank forecast a profit of $3 billion for the first quarter, topping analysts' expectations. For more, see [ID:nN09260398]

The state of the banks has been a key factor behind the stock market's sentiment and is at the heart of the global economic crisis. The current rally to two-month highs first took off in early March when several major banks said they had made money at the beginning of the year.

"This is another step in that (banks) are about to report earnings that are not a disaster and are creeping into the black," said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston.

"It's another piece of gathering evidence that banks can very likely weather and probably pass the worst operating results that they've seen."

In the latest sign that the mood of consumers is on the mend, many U.S. retailers posted smaller-than-expected sales declines for last month, signaling shoppers may be loosening their grip on their wallets. [ID:nN09540393].

The Dow Jones industrial average .DJI rose 246.27 points, or 3.14 percent, to 8,083.38. The Standard & Poor's 500 Index .SPX gained 31.40 points, or 3.81 percent, to 856.56. The Nasdaq Composite Index .IXIC climbed 61.88 points, or 3.89 percent, to 1,652.54. more...

GlobalCoal Newcastle Coal Index

Weekly NEWC Coal Index
13-Mar-09 62.10
20-Mar-09 60.30
27-Mar-09 61.39
03-Apr-09 60.79
10-Apr-09 63.24

The Star Plantation stocks higher on CPO prices

Petaling Jaya
Plantation stocks attracted buying interest today as sentiment was boosted by higher crude palm oil (CPO) prices.

Kuala Lumpur Kepong Bhd closed up 30 sen to RM11.10, IOI Corp Bhd gained 4 sen to RM4.20, Sime Darby Bhd added 5 sen to RM6.10 while United Plantations Bhd rose 10 sen to RM10.30.

At 5.15pm, CPO for June delivery rose RM98 per tonne to RM2,263, the highest in six months, in anticipation of lower inventory as of end March compared with the month before. The Malaysian Oil Palm Bhd (MPOB) is due to release the statistics tomorrow.

A bank-backed research house, in a report, said it had raised CPO price assumption for this year to RM2,500 per tonne from earlier estimate of RM2,000.

It added that the upward revision was based on higher-than-expected shortfall in palm oil supply and the anticipation of a demand recovery in the second half year.

Moreover, the possibility of a weaker US dollar was likely to prompt investors to switch to commodities like palm oil, the brokerage added.

Business Times Palm futures rally to six-month high

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives ended on a six-month high yesterday on market talk that end-March palm oil stock is going to be lower than expected, dealers said.

"The stock is expected to be lower than 1.4 million tonnes, which fuelled sentiment of a possible a squeeze in global vegetable oil supply," said one of the dealers.

Malaysia is the world's second biggest palm oil producer, after Indonesia.

The Malaysian Palm Oil Board will release palm oil stock, production and export figures tomorrow.

Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will also release their first 10 days of April export figures.

"The market is fundamentally and technically steady," the dealer said.

At close of trading today, the CPO futures contracts for April 2009 jumped RM129 to RM2,410 per tonne, May 2009 rose RM140 to RM2,370 per tonne, June 2009 went up RM104 to RM2,269 per tonne and July 2009 added RM101 to RM2,219 per tonne.

The day's volume amounted to 18,618 lots, up from yesterday's 11,886 lots, while open interests declined to 86,762 contracts from 88,461 contracts previously.

As for the physical market, the CPO for April shipments in the southern region was higher at RM2,420 per tonne compared with RM2,280 per tonne previously.

An AMResearch Bhd report said that there “is a possibility that palm oil inventory could touch a low of 1.3 million tons by the year-end,” from a record 2.27 million tons in November.

The report also said a weak U.S. dollar would support higher palm oil prices, raised its average forecast by 25 per cent to RM2,500 a ton this year, and 17 per cent to RM2,700 for 2010. Palm oil has averaged RM1,928 a ton this year.

Chin’s comment “is adding to the buoyancy,” Ben Santoso, an analyst at DBSVickers Securities, said. Malaysia’s palm oil board may announce monthly data tomorrow or on April 13.

Bloomberg Richards Bay Coal Terminal Exports Rose 5 Percent in March

Richards Bay Coal Terminal Exports Rose 5 Percent in March
April 6 (Bloomberg) -- South Africa’s Richards Bay Coal Terminal, the world’s largest coal-export facility, shipped 5 percent more coal in March than the same month a year earlier.

The terminal on South Africa’s northeast coast shipped 4.85 million metric tons of the fuel, up from 4.62 million tons, the terminal said in an e-mailed response to questions today.

Richards Bay Coal is owned by South Africa’s largest coal exporters, including Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc. While it is the world’s biggest coal-export terminal, Australia’s Newcastle port ships more of the fuel from two terminals.

The terminal received 5.19 million tons of coal by rail last month and had stocks of 3.48 million tons at the end of March. Fifty-eight ships were loaded during the month and 811 trains arrived at the facility.

Coal shipped from the terminal traded at an average of $62 a ton in the week ended April 3, according to Petersfield, England-based McCloskey Group.

Source: Bloomberg (6 Apr 2009)

GlobalCoal Coal trucked to port during Colombian rail strike

BOGOTA, April 6 (Reuters) - Coal produced in Colombian mines owned by Swiss-based Xstrata (XTA.L) is being trucked to port during a train workers' strike that has shut down the local railway, the company said on Monday.

Last month, Xstrata bought the Colombian mines of privately owned Glencore, which is also based in Switzerland. The mining operations are run under the name Prodeco.

"We are moving Prodeco coal to port by road," Xstrata spokeswoman Claire Divver told Reuters. "We have not quantified the impact that this will have on exports."

Coal from Colombian mines owned by U.S.-based Drummond has also been affected by the railway work stoppage.

Some 600 employees of the Fenoco transportation firm are striking to demand recognition of their labor union. The protest has stopped 130,000 tonnes of coal per day from being transported by rail to Caribbean ports from northern Colombian mines, union officials say.

Colombia's labor ministry has called for mediation of the dispute, Divver said. A union representative said the workers had not been informed of any government call for mediation.

Xstrata expects to produce 11 million tonnes of coal from its Prodeco operations this year while Drummond sees output of 27 million.

source: Reuters 07 April 09

Bloomberg U.S. Stocks Gain as Shares of Life Insurers, Centex Lead Rally

April 8 (Bloomberg) -- U.S. stocks gained, snapping a two- day losing streak, as life insurers jumped on prospects of a government bailout and Pulte Homes Inc. agreed to buy Centex Corp. to create the nation’s largest homebuilder and

Lincoln National Corp. rallied 33 percent and Hartford Financial Services Group Inc. added 13 percent as the Treasury said it may give Troubled Asset Relief Program funds to life insurers. Centex surged 19 percent as Pulte Homes said it will buy the company in a $1.3 billion stock deal. Bed Bath & Beyond Inc., the largest U.S. home-furnishings retailer, rose the most in nine years on better-than-estimated earnings.

“We think that a bottom is being put in place,” said David Heupel, who helps manage $60 billion at Thrivent Financial for Lutherans in Minneapolis. “The more comfort you get with earnings and the viability of financial companies, the more enthusiasm goes back into stocks and into the market.”

The Standard & Poor’s 500 Index increased 1.2 percent to 825.16. The Dow Jones Industrial Average rose 47.55 points, or 0.6 percent, to 7,837.11. Four stocks gained for each that fell on the New York Stock Exchange. The MSCI World Index of 23 developed nations added 0.5 percent.

The S&P 500 and Dow briefly turned negative in the final two hours after the minutes from the Federal Reserve’s last policy meeting said “downside risks” remained in the economy. Policy makers feared the nation might fall into a self- reinforcing cycle of rising unemployment and slumping spending, the minutes showed. more...

JPM - European Integrated Oils

* In this note, we raise our estimates to reflect our new 2009-10 oil price assumptions of $49.4/bbl for 2009 and $57.5/bbl for 2010 vs. $43.3/bbl and $55/bbl previously. This reflects our view that the oil market could tighten again by the end of this year. With all the integrateds’ strategy presentations now behind us, we thought it useful to recap the main takeaways from the strategy updates. The oil sector has outperformed the broader market by 9% YTD, as investors rotated out of the UK supermajors into another safe haven and played the rebound in crude through E&P-levered names. Going forward, we remain cautious on the sector as we do not view near-term valuations as compelling, even at our new crude price forecasts. In addition, upcoming 1Q09 results should be weak and could hit sentiment.

* Estimates increased: We raise our EPS estimates for the European oils by 11% and 4% for ‘09-10 on avg. The largest positive effects are for E&P levered names. Consensus has fallen in the past two months - our new estimates put us 9% and 5% below Bloomberg consensus for ’09-10.

* Strategy updates round-up: With all the European integrateds’ 2009 strategy updates behind us, we see the main takeaways as follows:

1) Dividends: While the supermajors will likely protect dividends in 2009, there remains uncertainty for some— which are constrained by payout policies, gearing levels or access to funding.

2) Capex should decline 7% in 2009 vs. 2008. Along with dividend cuts,we believe that sector gearing (net debt/capital employed) should remain under control and peak at 22% in 2010, up from 19% in 2008.

3) Volume targets cut: Most companies have cut their growth targets for 2012 given uncertainty over project sanctioning. We think that not all the bad news is out of the bag yet.

4) Cost reductions: The majors have unveiled ambitious upstream cost reduction targets. We see lifting costs declining 21% in 2009 vs. 2008 after a 23% annual increase over 2003-08 but do not believe costs will return to 2005 levels.

Goldman Sachs Could stress test results lead to significant capital raising?

Goldman Sachs - Could stress test results lead to significant capital raising?

* Stress test results in US, as well as capital restructuring events, remain primary focus in short term. Results expected by end April.

* Default risk at most banks low as liquidity support ongoing, but additional debt exchanges/tenders likely globally.

* Asset quality and profitability remain major concerns.

* Preferred dividend cuts and preferred/debt exchanges likely as means of improving tangible equity levels.

* Government intervention a concern for investors in intermediate term.

* Specialty finance is still under pressure - tight liquidity and viability of business model persist.

* Valuation: Short term: volatility to remain high, especially in Tier 1 securities, but cash could outperform CDS if exchanges/tenders continue. Longer term: recovery may start in 2H, especially if equity capital raises are successful. Negative basis could reverse in banks; buy new supply of non-guaranteed paper; specialty finance need to restructure funding models.

Bloomberg Indonesia Stocks: London Sumatra Indonesia, PT Inco, Ratu Prabu

April 8 (Bloomberg) -- Indonesia’s Jakarta Composite index fell 5.22 points, or 0.4 percent, to 1,485.64 as of 10:12 a.m. local time. The market will be closed tomorrow and April 10 for the parliamentary elections and a public holiday. The following stocks are among the most active in the Indonesian market.

Rubber producers: PT Perusahaan Perkebunan London Sumatra Indonesia (LSIP IJ), the nation’s second-largest plantation stock, dropped 2.1 percent to 3,525 rupiah. PT Bakrie Sumatera Plantations (UNSP IJ), the third biggest, lost 1.6 percent to 315 rupiah. Rubber for September delivery fell 1.8 percent to 171.50 yen ($1.71) a kilogram at 11:00 a.m. in Tokyo.

PT International Nickel Indonesia (INCO IJ), the nation’s biggest producer of the metal, and which is known as PT Inco, rose 1.9 percent to 2,675 rupiah. Nickel for three-month delivery added 1.4 percent to $10,905 a metric ton in London yesterday.

PT Ratu Prabu Energi (ARTI IJ), the Indonesian furniture company that has shifted its business into energy, advanced 24 percent to 560 rupiah. Ratu Prabu will buy an oil field in the province of North Sumatra and plans to spend $150 million on capital expenditure this year, Investor Daily Indonesia reported, citing Finance Director Gemilang Zaharin.

Mandiri Sekuritas Telkom: Go Defensive (TLKM, Rp7,300, Buy, TP: Rp8,200)

TLKM share price has increased by 5.8% ytd. Despite an indication by the company that earnings dropped by around 12%yoy in FY08, we have see TLKM stock price rise by 5.8% ytd. The main reason being that it’s considered a defensive play, and it had been trading at discount to regional peers.

Still a slow growth going forward, but TLKM is our sector pick. Though we stick to our view on low growth (EPS to grow by 1.4%yoy in FY09F), we flip our call on the stock from Sell to Buy, as we see “growth” is no more a distinguishing factor to chose our sector top pick. We put a Buy for the stock and now rely our call amongst others on TLKM’s highest free float (48.8% vs 20% for ISAT), and dividend yield (4.4% vs 3.5% for ISAT), its large cap (Market cap of Rp144tn vs Rp30tn for ISAT) and
overall a defensive play. We don’t like small caps – EXCL because of huge forex debt and losses, low free-float and while we have a Buy for BTEL considering its cheap valuation vise, we like to emphasize that the stock will underperform given the risk exposed to Bakrie Group.

Reverse our call from Sell to Buy. We arrive at a new TP of Rp8,200/share (+12.3% upside) after fine tuning our earnings and adjusting our WACC from 14.9% to 13.6%. Our TP implies PER09F of 14.2x, higher than regional peer average but lower than ISAT. Note that though ISAT has historically traded at premium to TLKM given its better growth, but now given that ISAT’s free float is about half of TLKM, we think TLKM should trade inline with ISAT. In order for TLKM to trade inline with ISAT, TP should be Rp9,100/share, indicating a further 10.9% upside to our TP. Currently Telkom PER09F 12.6x.

KimEng BISI International Slowing down due to fertilizer shortage

Good FY08 result , but slowing in 4Q08
The company”s net profit soared 165% YoY to Rp398.4b in FY08. The net profit was inline with our expectation. However, performance in 4Q08 was lower compared to 3Q08. Corn seed sales volume declined 39% YoY while lower selling price of vegetable seeds resulted in negative vegetable seed margin of -30%. Overall, total gross margin declined to 43% in 4Q08 from 57% in 3Q08. Management said lower corn seed sales volume was due to seasonality related to peak paddy planting in the period, and shortage of subsidized of fertilizer at end of 2008. Meanwhile, lower vegetable
seed price followed lower commodity price, especially “Kangkung Seed”.

Government still supports the industry
Industry outlook remains robust as the government still supports the industry. Government budgeted Rp1trillion subsidy in FY09 for hybrid corn seeds (8,500mt) and paddy seeds (3,750mt). In addition, the government will compensate shortage of fertilizer subsidy at YE 08 by increasing supply of fertilizer by 5% this year.

New varieties will support the company and industry growth.
The company will release three new variety products this year. One of the new products is “ BISI BIG” corn seeds. Management said BISI BIG has better margin and production yield compared to old products. The new varieties will support the company and industry growth.

Maintain BUY with lowered TP
We maintain BUY as potential growth remains robust, and the government still supports the industry. We lowered TP to Rp2,100 (from Rp2,600), however, as we anticipate fertilizer shortage will cause slower growth compared to our previous assumption. We also see that paddy seed sales volume to be lower than expected, and vegetable seeds price to be lower.

Danareksa BTEL sanggup bersaing di tengah perang tarif

BTEL sanggup bersaing di tengah perang tarif Analis: Chandra Pasaribu
TP Rp 114, BUY

Strategi harga yang konsisten dan mudah dimengerti oleh pengguna jasa telepon seluler
ARPU BTEL sanggup menyamai ARPU Indosat dan XL. Ini menunjukkan perusahaan sanggup bersaing di tengah perang tarif saat ini Total pelanggan mencapai angka 7,3 juta

EBITDA margin yang lebih kecil dari Indosat dan XL dikarenakan skala operasional BTEL yang lebih kecil. Rasio biaya penjualan terhadap penjualan kotor mencapai 15,1%
atau lebih tinggi dari Indosat yang 6,6% dan XL yang sebesar 11,1%.

Net gearing mengecil. Investasi jangka pendek yang tidak pasti dikhawatirkan akan mempengaruhi belanja modal FY09 yang mencapai $200juta dan berimbas pada penetrasi
BTEL terhadap pasar telekomunikasi.

Penjualan menara BTS masih dalam progress yang pendapatannya akan dipergunakan untuk belanja modal US$200juta tahun ini.

Cash equivalent sebesar Rp1,1tr ditempatkan di Recapital Asset Mgt dan Samuel Securities. Kemungkinan tidak ada dividend. Mempertahankan TP di Rp114, BUY.

Mandiri Sekuritas BTEL share price going up

BTEL share price have gone up 18% yesterday, due to the comment made by TLKM president director Rinaldi, that TLKM is considering buying a CDMA company.

As it's not based on fundamentals of BTEL but rather on a possible acquisition or Merger with TLKM we don't think the price rise is sustainable. This is because we don't see a near term acquisition or merger with BTEL and talks are only preliminary stage. These talks have been on since quiet sometime about BTEL possible acquisition or merger. However, if based on fundamentals we think it's a good sign as we have a Buy for BTEL (TP: 68) and its trading at Low PER09F of 7.2x as compared to TLKM 12.6x and ISAT 15.5x.

Details
We talked to Investor Relation of TLKM yesterday.
1) The announcement in the press is just in preliminary stage.

2) There are many uncertainties/hurdles regarding the same.
TLKM has to clearly separate TLKM flexi (CDMA) division from cellular (GSM). It has already doing that but still there is no clear subsidiary for Telkom Flexi.
Whether to acquire or merge with CDMA operator, though it announced only of a possible acquisition its open to both.
Which company it has to consider? There are 6 CDMA operators but TLKM has said it would look at only BTEL, mobile-8 or Indosat. ( 6 CDMA operators are Indosat, Bakrie Telkom, Mobile-8, Sampoerna Telekomunication, Telkom, Smart Telecom)
Still to calculate benefit from the consolidation. Main aim is to get the frequency/spectrum.

3) Hurdles regarding acquiring/merger with the 3 possible target companies…
Mobile-8 Coverage in same areas as Flexi and hence redundancy of assets usage. Also has lot of debt repayment obligation.
BTEL- Strong financially and market share and may not want to be acquired as still growth is sound in next 2 years. Additionally TLKM said that BTEL would like to keep the majority stake. No details from BTEL on this. So we don't see BTEL as a target of acquisition. For merger, its possible given both will complement each other ' together will operate as a monopoly in the CDMA market.
Indosat ' Starone ' Big hurdle 1) StarOne license is bundled with IDD (International Direct Dialing) license. So have to find a way how it should be separated 2) Since StarOne (CDMA) and Indosat GSM business uses the same spectrum, there maybe possibility that new operator who acquire StarOne may not use the frequency efficiently and which may impact GSM service quality of ISAT.

Despite all hurdles, and that CDMA market share is around 15% of the total wireless market share, we do see consolidation positively either in CDMA or GSM, as we believe all operators have similar pricing strategy and target market, and hence the market share gets divided with non one operator emerge as clear winner. With consolidation, one strong operator can maintain a better subscriber growth, and also modify tariffs as it would act as monopoly; therefore report better growth.
Best regards,

Surabhi Chopra Mandiri Sekuritas

Business Times Palm oil exports strong despite global slowdown

Malayasia’s palm oil exports are still strong despite the global economic slowdown, led by the good appetite of countries like China and India.

Malaysian Palm Oil Association (MPOA) chairman Datuk Azhar Abdul Hamid said so far the impact of the downturn is minimal.

"Although the export trend varies up and down from month to month, demand is still stable," Azhar told reporters in Putrajaya at the launch of the association's new book on sustainable production of palm oil.

The book was launched by Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui.

Azhar, who is also Sime Darby Plantations Sdn Bhd managing director, said despite predictions of a lower crude palm oil price, it has been firm due to a healthy demand and supply situation in the world market.

Malaysia is the world's second largest oil palm churner after Indonesia, exporting over 22 million tonnes and its value added products were worth over RM65 billion in 2008.

Meanwhile, Chin said replanting efforts have partly helped stabilise CPO price at around RM2,100 a tonne now.

The government has approved 1,228 applications from big firms and smalholders to replant a total area of 106,330ha nationwide.

This is more than half of the government's target to replant 200,000ha over the next two years. Malaysia now has 4.3 million hectares of oil palm plantations.

As incentive, the government, under the second stimulus package, has allocated RM200 million or RM1,000 per hectare for companies and RM6,000 per hectare for smallholders.

"The government will pay a total of RM106.3 million, or RM1,000 per hectare, to replant trees of 25 years and above.

Due to replanting, the national stockpile has also dipped to 1.5 million tonnes as at end-March from 2.2 million tonnes in November last year.

DBS BBCA Strong FY08 results

At a Glance
• Bank Central Asia reported FY08 net earnings of Rp5,776bn above our FY08 estimate due to the lower than expected interest expenses as well as lower corporate tax rate.
• BBCA’s c.o.f was resilient despite tight liquidity
• Expect NIM to contract due to declining interest rate
• Maintain Buy with new TP: Rp3,800

Result Highlights
Net interest revenue grew 19.6% q-o-q on the back of improvement in NIM to 6.6% in 4Q08 from 6.3% in 3Q08. The improved NIM was driven by higher average asset yield that increased 39bps to 9.8% and relatively flat cost of fund (c.o.f.).
BBCA’s strong deposit franchise was not affected by tight liquidity in the financial system.
Lower corporate tax rate to 25% from previously 30% as BBCA has qualified for tax incentive for listed companies that meet certain criteria.
Gross NPL ratio had improved to 0.6% in Dec08. With loan provision coverage of 408%, BBCA could withstand any deterioration in loan quality in the future. Low cost deposit declined slightly to 50.3% in Dec 08 from 52.7% in Sep 08 due to the rising
deposit rate as banks compete for liquidity in the market. In 4Q08, gross loan grew 6.9% q-o-q driven by mainly by the commercial & SME and consumer segments.

Recommendation
NIM may contract due to the declining asset yield due to its SBI and variable rate government bonds portfolio that comprise 25% of its earnings assets when combined. However, we believe that BBCA’s business model is relatively defensive during the current financial turmoil on the back of its high liquidity (Dec08 LDR was 53.8% and
CAR was 15.8%) and strong deposit franchise as a transaction bank. Maintain Buy. We revised up our TP to Rp3,700 at 3.6x FY09PBV (Gordon Growth DDM) as lowered ERP assumption to 6% and maintain risk free rate of 10% (ROE: 25% and retention rate:
50%).
ANALYST: Agus Pramono CFA

LondonCommodity UK Coal up, signs new coal supply deal

Shares in UK Coal gain 3.3 percent as the coal producer signs a new contract with an electricity generator to supply coal on improved and extended commercial terms, which it says will have a positive financial effect as of Jan. 1 2009.

Arbuthnot Securities lifts its rating on the stock to "buy" from "reduce".

"UK Coal has been hit hard on the back of concerns over its profitability and possible cash requirements, seeing the price halve since early February. (The contract news) demonstrates that management is working hard to improve the group's prospects and ability to attract capital," says the broker in a note.

Source: Reuters

Business Times Malaysian palm oil stocks may hit 20-month low

Hamburg

Malaysia's end-March palm oil stocks may fall to a 20-month low of between 1.30 million and 1.40 million tonnes from 1.56 million tonnes at the end of February, Hamburg-based oilseeds analysts Oil World forecast yesterday.

Official crop agency Malaysian Palm Oil Board is due to release the March palm oil exports, production and stocks data on Friday.

Palm oil prices reached a six-month high in early April, partly because of expectations sluggish Malaysian output has cut stocks in the key exporting country.

"The current lean production period is obviously leaner than is usually the case," Oil World said. "Private estimates point to a decline in Malaysian palm oil output in March by more than 5 per cent compared to February which is a rather unusual occurrence."

"If this is confirmed, Malaysian palm oil stocks were possibly reduced to a 20-month low of only around 1.30 to 1.40 million tonnes by the end of March, considering that exports remained large at more than 1.2 million tonnes."

Malaysian stocks had already been reduced severely from 2.27 million tonnes in early December 2008, helping keep palm oil prices firm in the face of the global economic slowdown.

"The bull run in palm oil prices may not have run its course," Oil World said. "There may still be several weeks with unusually small palm oil price discounts or even premiums over soya oil before the foreseeable recovery in output starts making palm oil more attractive again for consumers." - Reuters

Bloomberg Adaro Energy Expects Higher Selling Prices for Coal This Year

April 7 (Bloomberg) -- PT Adaro Energy, Indonesia’s second- largest coal producer by output, expects to sell more of the fuel at higher prices this year. “We’ve secured prices for 80 percent of our contracts for 2009, and the prices are higher than last year,” President Boy Garibaldi Thohir said in an interview today, declining to give
any price details. The mining company negotiates prices annually with long-term buyers.

Coal prices soared to a record in July last year driven by demand from China and supply disruptions, boosting the earnings of coal producers. Adaro said last week net income surged 10- fold last year on increased output and higher prices. Thohir, 43, maintained the company’s outlook forecast of between 42 million metric tons and 45 million tons for this year, which may help earnings before interest charges, tax and depreciation to “rise significantly” from 2008. Adaro produced 38.5 million tons last year.

The weekly index for coal from Newcastle in Australia, the world’s largest port for the fuel, rose to a record $192.50 a ton in the week to July 4 last year. The gauge has since fallen 68 percent to $61 a ton last week, according to the McCloskey
Group Ltd. Last year’s average price of $129 a ton was 91 percent higher than the $66.91 mean in 2007.

Adaro may spend as much as $100 million to buy a barging and ship-loading company to reduce costs and improve efficiency, the company said in March. The coal producer is also studying a plan to build a conveyor belt linking its mine pit in South
Kalimantan province to a nearby river port, Thohir said. “The only one missing at the moment in our transport link is the barging,” said Thohir. “Then I think we are complete. I want to become like Shenhua, only they do it with rail and us using river transport.”

China Shenhua Energy Co., the nation’s biggest coal producer, is an integrated company with investments including a coal and power project in Indonesia’s South Sumatra province.
For Related News and Information:
Adaro’s financial analysis: ADRO IJ FA
Stock index One-Year Price Graph: JCI GP
Most read Indonesian stories: MNI INDO 1W
Search for Indonesian stories: NSE INDONESIA

CIMB INCO Long-Short View On valuation gap

Long-Short View On valuation gap - by Erwan Teguh

We believe Inco's recent outperformance is hard to justify. Valuation gaps between Inco and both Antam and Vale (parent company) promise a rewarding trading opportunity, in our view. Inco's valuation premium gap is peaking and would soon narrow, we believe. We recommend a switch to Antam, which now trades at a discount. We believe Antam is a more hedged bet, supported by its gold business, and potentially benefiting when nickel prices rebound further. It could also book better margins and growth than a pure nickel producer like Inco. For exposure to Inco, we believe Vale is now more attractive.

MacQ Bakrie Telecom– re-iterates Underperform

Bakrie Telecom– re-iterates Underperform

He believes that the 6% rise in Bakrie Telecom's share price yesterday is due to the comment mande by TLKM's president director, Rinaldi Firmansyah, saying that TLKM is considering buying a company to complement its fixed wireless CDMA Flexi business. He said that TLKM is "open to any proposal to consolidate with Flexi".

Ken does not see TLKM's Flexi business playing a major part in industry consolidation for several reasons:
(1) Does not make economic sense to acquire a smaller rival. Flexi has wider coverage and more customers with higher ARPUs compared to its rivals. Also, it would be cheaper to acquire additional frequency from the government than to buy out a smaller telco to obtain more frequency.
(2) Flexi remains a division within TLKM, and has yet to be carved out as a separate subsidiary. It would thus be difficult for any synergies to be realised if TLKM were to acquire another company.
(3) TLKM's state-owned corporate mentality makes it very cautious in making acquisitions. Though management has reviewed numerous investment opportunities (eg, other Indonesian telcos, TV stations, telco tower companies, Iran Telecom), its last major acquisition was an 80% stake in PT Sigma Cipta Caraka (an IT services company) for US$35m in February 2008.
(4) Cannot be viewed as bailing out Indonesian business groups. After Flexi (6% market share), the two largest CDMA operators are Bakrie Telecom (4% market share) and Mobile-8 (3%).

MacQ PT Inco– re-iterates Underperform

PT Inco– re-iterates Underperform

He believes that the sharp share price rise is unjustified and the industry outlook for nickel remains challenging for several reasons:
(1) Nickel inventory continues to climb. LME inventories are now 106,830t, up 7% in three weeks and just off 13-year highs.
(2) Max Layton of Macquarie's commodities team highlighted that their channel checks do not indicate any significant pickup in orders for base metals (see Commodities Comment- Premature base metals price rally , 3 April 2009 for further details).
(3) Any revival in demand will be matched by an equally robust recovery in production. Nickel producers have cut production by 20% as a result of weak markets. To a large extent, these cuts are temporary and can be easily reversed. Please refer to our recent initiation report, Overwhelmed by negative factors, 23 March 2009, for further details.

MacQ Three research notes from Ken “the Bear” Astra International – re-iterates Underperform

Ken Yap expects the automotive sales trend to worsen in coming months: His channel checks suggest the outlook for automotive sales will weaken in 2Q09 from the past 3 months. This view was reinforced by local newspaper reports today which quote Toyota Astra Motor marketing director Joko Trisanyoto as predicting that car sales will be flat with a tendency to decline over the next three months. We believe this will be the case for several reasons:
(1) Price increases starting to bite: Demand in 1Q09 has been driven by consumers buying ahead of price increases. Automotive prices as of 1 April 2009 are approximately 15-20% higher than what they were three months ago across all manufacturers.
(2) Credit approval process remains tight: Financing companies continue to be very selective in giving out credit to finance automotive purchases, approving only 30-50% of applicants.

On motorcycle, the MoM industry growth due to introduction of new models and inventory restocking: Channel checks indicate that end market sales have not picked up (though they have stabilised). Also, he highlights the potential for motorcycle price war: Astra Honda Motor (AHM) had a 48% market share in 1Q09, up 370bp from 4Q08. Suzuki (No.3 in the market) lost 400bp of market share QoQ and could potentially start a price war in an attempt to regain lost ground.

MacQ Indofood: may surprise the market with a lower refinancing cost

Indofood’s share price has been under pressure since the company announced details of the Indolakto (a milk company) acquisition. The acquisition value was around US$350mn, around US$200mn of which had been funded with short term debt, taken in December when US$ liquidity was tight and borrowing cost expensive. That was perhaps the main reason why investors have not liked the deal, although on the surface Indolakto is looking like a great asset, to me at least.

But when Indofood reports its 1Q09 results in May, I suspect the Street could be positively surprised to learn that around US$140mn of the US$200mn short term debt has been refinanced into a 3-year facility, with a LOWER cost of between 5-6%, versus the 8-9% previously. Refinancing negotiation for the remainder of the debt is still ongoing.

It appears that the Street has underestimated the Salim group’s creditworthiness and strong relations with the banking circle, as one of the few business groups that did not default during the 1997 Asian crisis. Based on a consensus EPS of Rp130 for FY09, the stock trades on 7.4x P/E. Not Rated.

Why I think the stock is worth a closer look?
(1)Indolakto acquisition could enhance the medium term EPS growth outlook, as organic growth prospect of Indonesia’s milk industry is stronger than that of instant noodles.
(2)Going into 1H09 with a lower average input cost for wheat and skim milk, the main raw materials. EBIT margin may expand.
(3)A leveraged beneficiary if the domestic consumption is stronger-than expected, the Rp strengthens, and cost of debt coming down. So far the instant noodle sales volume for Jan-Mar is encouraging.
(4)Consensus EPS estimate on the CPO space (Indofood Agri & London Sumatera are Indofood’s subsidiaries) has yet to reflect the higher CPO prices of late.
(5)Big acquisitions unlikely in the foreseeable future. Having purchased London Sumatera (LSIP IJ) and Indolakto (Not Listed), the year-end 2008 balance sheet could have reached its limit at 168%. Investors can now assess what they are really buying when the buy Indofood, without fearing unexpected acquisitions.

MacQ China GDP forecast upped

China GDP forecast upped!
In today's lead item, our China economist Paul Cavey raises our 2009 GDP forecast by 1ppt to 7.5%-8.0%, reflecting remarkable recent strength in bank lending and fixed asset investment (FAI), which grew 26.5% YoY in Jan-Feb.

At over 40% of GDP, investment as an engine of growth should be exhausted. Apparently though it is in rude health. Fixed asset investment (FAI) grew 26.5% YoY in Jan-Feb 2009, above both the 2008 rates and our 2009 forecast of 15%. In any case, the awkward reality is that official economic data matter for recorded GDP, and so far most of it has been better than expected. We thus raise our 2009 forecast FAI growth to 18%, lifting GDP growth from 6.5–7.0% to 7.5–8.0%. This is a step closer to the magic 8.0%, but at a cost: on our numbers investment would hit an all-time high of 42% of GDP by end-09. The highpoint of this month's data releases will obviously be 1Q09 GDP, scheduled to be announced on16 April. With the strength in FAI, this is set to be higher than we first thought, so we raise our guesstimate from 6.4% to 7.2%.

LondonCommodity Feb coal imports reach 22-month high

Coal imports surged to the highest level in at least 22 months in February to 4.88 million tons, according to data released by the General Administration of Customs on Monday. That represents a 63 percent increase compared to January, and a 73 percent increase compared to February 2008.

Analysts say that China, the world's biggest coal producer and consumer, increased imports of the fuel as power producers boosted overseas purchases on falling international coal prices and lower shipping costs.

Benchmark prices for coal fell to $62.10 a ton in the week ended March 13 at Australia's Newcastle port, compared with an average of $129 a ton in 2008. The coal price at Qinhuangdao port, a benchmark for China, stood at 557.5 yuan ($81.5) a ton as of March 16, according to the China Coal Transportation and Distribution Association. The Qinhuangdao coal price has fallen from a July record of 995 yuan a ton.

The disagreement between China's utilities companies and coal miners over this year's contract price for coal is another reason that local thermal power producers have had to purchase coal overseas.

Wang Ling, analyst with Umetal.com, believes that coal imports will continue to increase in March and may drop beginning in April.

"China's coal producers may suffer a loss due to increased overseas purchase by utility companies," said Han Xiaoping, an energy analyst with Beijing Falcon Pioneer Technology Co.

Other analysts, however, believe that imported coal will not pose a threat to local coal, simply because no single coal producer has a production capacity large enough to satisfy China's rising demand.

Source: China Coal World

LondonCommodity Asia Coal-Prices rebound above $64 as demand picks up

Prices of power-station coal from Australia, a benchmark for Asia, rose to a one-month high of above $64 a tonne this week, as earlier low prices drew more buyers into the market. Traders said regional buyers have recently stepped up their tender activities to seek short and mid-term coal supplies, with Chinese utilities being the most active in the market. A rally in crude oil prices, up about 15 percent this year,

has also helped bolster the price of coal as it is an alternative fuel source. Thermal coal prices on the globalCOAL Newcastle weekly index rose about 10 percent from a week ago to $64.15 a tonne in the week ended April 6. Prices are down $4.65 from mid-last week. The index is now at its highest since Feb. 28, when spot prices were at $65.32 a tonne. "Demand picked up right after Aussie coal prices fell below $60. That drew a lot more buyers out to the market hoping to secure supplies at a bargain," said a producer source. "And demand from China has been particularly strong since imported coal is still much cheaper than domestic supplies, even though the imported material is of better quality." Prices of coal in China have been hovering around $86 a tonne, based on coal with a heating value of 5,800 kcal/kg (NAR). At current spot prices, industry sources said Chinese utilities were still able to save about $10 a tonne by importing coal from Indonesia and Australia, even after factoring in freight charges and various import taxes. The market is keenly watching contract negotiations between power producers and coal sellers in China, amid fears that coal suppliers, such as Shenhua Energy Co and Yanzhou Coal, could agree to a price reduction and cut utilities' demand for coal imports. China's No. 1 utility, Huaneng Power International, said last week it has retreated from its bid to negotiate for lower coal contract prices and was hoping to settle 2009 prices at last year's 504 yuan ($73.75) per tonne.

Producers and trade sources said Indian buyers were also seeking large amounts of coal, although they were generally looking for below-market prices. Industry participants will also be keenly eyeing tender results in the region to gauge market sentiment. Outstanding tenders include Taiwan Power Co's tender to buy 0.7 million

tonnes of the fuel as well as Korea South East Power's (KOSEP) tender to buy 1.12 million tonnes for delivery between June and August.

Source: Reuters

Associated Press Stocks extend losses to 2nd day; Dow tumbles 186

NEW YORK (AP) -- Investors dumped stocks for a second day Tuesday, prolonging a break from a huge four-week rally as the market girds itself for potentially grim earnings reports.

Major market barometers all fell more than 2 percent, including the Dow Jones industrial average, which lost 186 points. Trading volume was low, which can amplify swings in the market.

The selling hit a wide range of industries, from financials to energy, in an otherwise quiet day during a holiday-shortened week. The markets will be closed for Good Friday.

Analysts attributed the pullback to profit-taking after a huge advance in March that gave the Dow its best four-week performance in more than 75 years.

Dan Cook, senior market analyst at IG Markets in Chicago, said investors are naturally cautious ahead of the parade of company's quarterly results but that the low expectations could benefit stocks.

"We've already set the bar very low for these companies so it is going to be hard for to disappoint to the downside," he said.

Investors are also focused on bank earnings that get under way after the long weekend, and several pessimistic forecasts about potential loan losses have jolted the market in recent days. Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. all report next week. more...

Associated Press World Bank: China's recovery could start this year

BEIJING (AP) -- China is likely to emerge from its economic slump later this year, helping the rest of Asia stabilize and possibly rebound, the World Bank said Tuesday.

"A ray of hope may be emerging with signs of China's economy bottoming out by mid-2009," the bank said in a statement. "A recovery in China -- fueled largely by the country's huge economic stimulus package -- is likely to begin this year and take full hold in 2010, potentially contributing to the region's stabilization, and perhaps recovery."

China's economy -- the world's third-largest -- should expand by 6.5 percent this year, though exports should shrink as Western markets continue to contract, the bank said in a report on Asian economies.

That's slower than its 9 percent growth last year, but still the strongest of any major economy in the world. Many Asian economies are already contracting and expected to shrink in 2009.

Beijing is trying to reduce reliance on trade with a 4 trillion yuan ($586 billion) plan to pump money into the economy through higher public works spending in hopes of boosting domestic consumption.

The Washington-based World Bank said pressure for Chinese prices to rise is still low, leaving room for the government to cut interest rates or take other steps to fuel growth.

China's growth has plunged as global demand for its goods weakened, with exports falling 25.7 percent in February from a year earlier. Private sector analysts are forecasting growth as low as 5 percent this year, down from 2007's 13 percent -- though still the fastest of any major country. The government's official target is 8 percent.

China is a key customer for other Asian nations that supply raw materials and components for manufacturing and other industries, making its economic health a factor in their ability to emerge from the regional slump.

A government-authorized business group reported last week that manufacturing expanded slightly in March following a months-long decline.

The central bank said last week that data pointed toward a recovery, though it gave no details or a time frame.

The World Bank cautioned that Chinese industry will have large unused capacity, possibly leading to weaker investment, slower job growth and downward pressure on prices, which can cut into company profits and investment.

"China cannot escape the external weakness," the bank said. Government spending alone could not offset weaknesses elsewhere, it said.

CLSA Cement Sector, the pause that refreshes

Nick Cashmore is in the writing mood. This time around, he highlights the attractive long term characteristics of the cement sector. The industry is facing a cyclical slowdown this year but there are good structural reasons to remain OWT the sector.

Key points from the report:
Cyclical slowdown in demand this year, due to a sharp slowdown in the economy.
Attractive LT characteristics: cement consumption per capita has also risen by an annual compound growth rate of 7.2%; demand could double again to 76mn tonnes by 2018.
Long run demographic drivers: population, urbanization, and household formation.
Industry is in excellent shape. Industry revenue 18.8% CAGR and op income 20.6% CAGR over the last decade.
Balance sheet getting stronger. Since 2004, total debt outstanding has halved to Rp5.1tn, net debt plunged from $1bn to US$43mn.

The Indonesian cement industry is also an oligopoly with 3 big listed players control 91% of the market:
Indocement (INTP IJ, OPF): financial difficulties at one of major shareholders at parent Heidelberger = higher dividends and possibility corporate action?
Semen Gresik (SMGR IJ, OPF): expanding capacity to 24.3mn tonnes, but not until 2014.
Holcim Indonesia (SMCB IJ): the smallest of the 3,l earnings swing by FX translations.

Indo Premier TINS – Downgrade to HOLD (TP Rp 1.165), Cut earning 2009 by 47%

FY08 Sales closed to our estimates, while net income below our estimate

TINS booked FY08 net sales of Rp 9.05 tr reached 98.8% of our estimates and 3.75% above the consensus, making the gross profit of Rp 2.718 tr, 99.4% of our estimate. Falling tin price in fourth quarter had pressured selling price where the ASP in Q408 scored at US$ 14,725/Mt. Unfortunately it was not accompanied with proportionate decrease of production cost. Thus the company’s Q408 net sales decreased by 20% QoQ down to Rp 2.158 tr and gross profit declined further by 82% QoQ down to Rp 122 bn. Capex in 2008 was focused to downstream business line - needs external financing

TINS now is concentrating its strategic business line towards downstream product such as tin chemical and tin solder
Tin Production in 2009 targeted at range 42,000 – 45,000 tons

Company has targeted its refined tin production at range 42,000 – 45,000 tons in 2009, or decrease by 10-15% compared to 2008. Continuous negative sentiment in tin industry and falling tin import from Japan and Singapore, has prompted us to revise down our assumption on 2009 production and sales volume, becoming 42,000 and 40,000 or 6,7% and 9,6% lower than previous estimates.

Tin Industry: A Glance
Tin production globally predicted cut by 10%
CRU predicts that total tin consumption globally in 2008 reached 333,000 Mt or decreased by 26.4% YoY from 2007 of 356,000 Mt. Per February 2009, CRU has predicted that total tin production in 2009 would continue to decrease by 10% in line with lower consumption or demand. In Indonesia, total tin production is predicted at 105,000 Mt. Tin inventory in LME surged up to 10,775Mt, indicating demand plummet

Japan Tin import plummet
Japan’s imports of refined tin plummet and dropped significantly in the first two months of 2009 due to global recession coupled with strength in yen that affected badly to the country’s demand. Cumulatively, total tin imports fell 49% YoY to 3,122 tons and plummet 60% MoM in February to 1,210 tons.

China still import tin
Per February 2009m China has imported tin 1,095 tons with majority supplier from Indonesia (50%) and Bolivia (20%). Cumulatively, total tin imports per February reached 1,938 tons or decreased 24% YoY

Valuation and Projection
Based on decreasing sales projection and with WACC of 19% (Rf 12.5%, beta 1.2x, risk premium of 6.5%, terminal growth of 5% and target debt ratio of 10%) our DCF model derived TP at Rp 1,165 or decrease 12.5% from previous TP at Rp 1,331 implying PER 2009F at 11x. Historically, TINS PER has deeply discount at 4-5x versus consensus estimate PER 2009F of 8.7x with EPS 2009F of Rp 160 (look exhibit Rp 2 and 3). Currently our valuation show us that TINS PER09F is traded at 11,5x with closed price at Rp 1,210

Nevertheless, TINS prospects seem hampered by fall in tin demand that in short and médium period unlikely to recover. Thus we downgrade our rating for TINS from BUY to Hold with TP Rp 1,165.

CIMB WIKA Initiating coverage - Infrastructure hedge

Initiating coverage - Infrastructure hedge - by Liliana Bambang
(WIKA IJ / WIKA.JK, OUTPERFORM, Tgt. Rp270, Construction and Materials)

The bulk of construction-sector growth in Indonesia this year should be powered by government projects, as the government intends to increase its budget by 20%, or Rp12tr, for infrastructure spending. WIKA, in our view, is the best pick for such exposure. WIKA is well-placed to seize the opportunity, as: 1) more than 70% of its construction jobs come from the government and SOEs; 2) 72% of its concrete business caters to SOEs and infrastructure projects; and 3) it has a robust balance sheet. With its well-diversified portfolio, WIKA should be able to expand its order book by 10.8% yoy this year. We initiate coverage with an OUTPERFORM rating and target price of Rp270, based on 8x CY10 earnings, in line with its regional peers.

DMG & Partners Plantation Sector: NEUTRAL

Indonesia may lower minimum reference price for palm oil export tax

Government may lower minimum reference price for export tax. According to news reports yesterday, Bayu Krisnamurthi, deputy to the coordinating minister for economic affairs, said that Indonesia may lower the trigger price for imposing the export tax on CPO and its derivatives from US$700/tonne to between US$600-US$650/tonne. Another alternative the government is exploring is to impose an export tax rate of between 1.5%-2% on palm oil, even if palm oil prices remain below the current trigger price of US$700/ tonne.

Reason – to ensure adequate supplies of palm oil for locals. YTD, palm oil prices have risen approximately 32% to RM2,272/tonne (US$639) on 3 Apr (per MPOB). In addition, the IDR has weakened against the US$, making exporting palm oil more attractive. The government is concerned that producers may export most of the palm oil produced, leaving the domestic market vulnerable to a supply shortage.

Impact - mildly negative on producers if export tax is imposed. Paying export taxes would be a drag, albeit a minor drag, on the producers’ cashflow and earnings.

Maintain NEUTRAL on sector. With weaker global demand expected, we are maintaining our NEUTRAL call on the sector. Indofood Agri Resources (IFAR) remains a NEUTRAL with target price S$0.51 and First Resources (FR) is a SELL with target price S$0.21.

Mandiri Sekuritas TLKM: Go Defensive

TLKM share price has increased by 5.8% ytd, despite an indication by the company that earnings dropped by around 12%yoy in FY08. The main reason being that its considered a defensive play, and it had been trading at discount to regional peers. Though we stick to our view on low growth, we flip our call on the stock from Sell to Buy, as we see “growth” is no more a distingui shing factor to chose our sector top pick. We put a Buy for the stock and now rely our call amongst others on TLKM’s highest free float and dividend yield, its large cap and overall a defensive play.

Telkomsel (TSEL) market share will now be guarded... In FY08, we estimate TSEL market share fell from 50% to 46%, the main shift coming in 1H08 when subscriber adds of peers outpaced TSEL’s. This is the only period of exception, as at all other times TSEL has outpaced its peers at alteast 1.7x. In FY09, we expect it to have a subscriber add of 9.4mn about half of industry’s around 22mn subscriber add. Note, this is partially reflected in the fact that in 1Q09, TSEL net add is 4mn which we believe is double than ISAT and EXCL given that in 4Q08, TSEL net adds was 4.7mn while it was only around 1mn for other two operator. We expect add rate to fall by the end of FY09 as penetration rises, a reverse of the trend that 4Q08 is strongest.

…double capex will support the subscriber growth. TSEL capex is about twice of its peers of Rp15tn vs Rp7tn for its peers. This is justified given its expected to have higher subscriber add (about double its peers) and that TSEL has always been a leader in providing the best service. Note, that despite higher subscriber adds, TSEL growth will be, if not lower, be at par with its peers given its higher subscriber base.

Despite slow growth, TLKM is our sector pick. We have fine tune d our earnings slightly, and for FY09 we forecast earnings to grow by 1.4%yoy. We continue to emphasize slow growth for TLKM in FY09, but as the growth slows down for all operators, we consider TLKM as our sector pick based on following factors. (1) Its large cap (2) highest dividend payout and yield (3) high free float

Reverse our call from Sell to Buy. We arrive at a new TP of Rp8,200/share (+12.3% upside) after fine tuning our earnings and adjusting our WACC from 14.9% to 13.6%. Our TP implies PER09F of 14.2x, higher than regional peer average but lower than ISAT. Note that though ISAT has historically traded at premium to TLKM, but now given that ISAT’s free float is about half of TLKM we think TLKM should trade inline with ISAT. In order for TLKM to trade inline with ISAT, TP should be Rp9,100/share, indicating a further 10.9% upside to our TP.

ANTM Punya Peluang Besar Miliki Saham NTT

JAKARTA. BNI Securities memperkirakan, PT Aneka Tambang (Persero) Tbk (ANTM) akan menjadi pemimpin konsorsium dalam akuisisi PT Newmont Nusa Tenggara (NTT). Menurut Norico Gaman, Analis BNI Securities, kemenangan pemerintah Indonesia di arbitrase international terhadap NNT memberikan peluang bagi perusahaan nasional untuk melakukan akuisisi saham NNT sebanyak 17%. “Hal ini tentunya menjadi hak eksklusif bagi pemerintah Indonesia untuk menawarkan hal tersebut kepada perusahaan pertambangan BUMN,” jelasnya dalam hasil riset yang dirilis hari ini.

Nah, Pemerintah Indonesia mempertimbangkan untuk menawarkan 17% saham NNT kepada konsorsium perusahaan pertambangan BUMN yang terdiri atas PT Antam (ANTM), PT Timah (TINS), dan PT Tambang Batubara Bukit Asam (PTBA). “Kami memperkirakan ANTM akan menjadi pemimpin konsorsium mengingat bidang usaha pertambangan mineral ANTM sangat dominan,” tulisnya.

Apabila realisasi akuisisi NNT dapat terlaksana, jelas Norico, tentunya ANTM akan sangat diuntungkan dari kontribusi pendapatan emas dan tembaga. Beberapa waktu lalu ANTM telah melakukan
akuisisi 100% perusahaan pertambangan emas di Cibaliung. Dengan demikian kontribusi pendapatan emas ANTM akan meningkat menjadi 40% dari kondisi sekarang 20% terhadap total pendapatan perusahaan apabila akuisisi 17% saham NNT dapat terealisasi. “Kami terus mencermati perkembangan akuisisi tersebut yang memberikan kemungkinan besar bagi ANTM untuk membeli saham NNT hingga menjadi 51% ke depan,” jelasnya.

Saat ini komposisi kepemilikan saham NNT terdiri atas: Newmont Gold company (45%) sebagai induk NNT, Sumitomo (35%) milik perusahaan Jepang, dan Pukuafu Indah (20%) milik pengusaha nasional Yusuf Merukh. NNT memiliki jumlah cadangan emas dan tembaga cukup besar di areal tambang Dodo Rinti, Sumbawa. Sementara cadangan tambang di Batu Hijau akan habis dalam waktu tiga tahun ke depan.

Berdasarkan pertimbangan tersebut, saat ini, BNI Securities merevisi rekomendasi ANTM menjadi
hold dengan target harga saham Rp 2.200 per saham untuk 12 bulan ke depan sampai ada perkembangan lebih lanjut dari aksi korporasi perusahaan.

Business Times CPO futures -- cautious trade ahead of MPOB data

OBSERVATIONS: The Kuala Lumpur CPO futures market sprung a bull trap in early trade last week, catching short position holders off guard. And as the short position holders scurried to cut losses by liquidating their money-losing short positions, the short-covering frenzy lifted this market to a six-month high.

The actively-traded June 2009 contract soared to an intra-week high of RM2,185, settling at RM2,165 a tonne, up RM175, or 8.79 per cent, over the week.

The short-covering frenzy was evidenced by the notable contraction in the total open interest position last Monday through Wednesday, when the total number of open contracts shrunk from 89,634 open contracts to 88,652, a disappearance of 982 contracts as the active June 2009 jumped from RM1,970 to RM2,070 a tonne.

Renewed speculative buying interest was sparked by talk doing the market rounds - or investor conviction - that a recovery in export demand coupled with a weather-related crimp on production would lead to a further reduction in stocks, which at end-February stood at 1,561,161 tonnes.

The country has experienced heavy rainfall in past weeks. Kuala Lumpur's Central Business District suffered traffic gridlocks due to flooding, which has probably also hampered the harvesting of palm oil fruits.

Buying interest based on speculation over a robust recovery in exports could be premature, if the latest - and spotty - export estimates are any guide.

Societe Generale de Surveillance sees March exports of palm oil jumping by a robust 63,000 tonnes, or 5.39 per cent, to 1,223,716 tonnes.

Intertek Agri Services' (IAS) estimate for March exports, however, was only 1,163,008 tonnes, up a mere 5,531 tonnes, or 0.47 per cent, compared to that for February.

Conclusion: This market, based on its position last Friday above the upper Bollinger Band, was in an extremely overbought position and a technical pullback in a distinct possibility in early trade this week,

Although still in bull mode, trading could turn cautious ahead of the Malaysian Palm Oil Board (MPOB) report as much, if any, good news may have already been factored into prices. The MPOB report on March trade data and end-month position of stocks is due out this Friday.

LondonCommodity Indonesian firm eyes $1 bln sale of Berau Coal

Indonesian investment firm Armadian Tritunggal is exploring the sale of its majority stake in coal miner PT Berau Coal, in a sale that could value the coal firm at around $1 billion, sources told Reuters.

Tritunggal, which is controlled by Indonesian businessman Rizal Risjad, is seeking advice from Deutsche Bank and Bank of America Merrill Lynch, two sources with direct knowledge of the deal told Reuters. Former Merrill banker Sheldon Trainor is also advising shareholders on the deal, sources said.

Tritunggal may sell its entire 51 percent or a significant part of the stake to potential buyers, one of the sources familiar with the deal told Reuters.

"The whole firm is being valued at between $800 million to $1 billion," said another source familiar with the deal, who also did not want to be identified because the deal is not public.

Berau Coal, Deutsche Bank and Bank of America Merrill Lynch all declined to comment. Risjad was unavailable for comment.

The stake sale plan comes after PT Berau Coal said earlier this year that it may consider an initial public offering provided market conditions improve.

Berau Coal is a joint venture between Tritunggal, Dutch firm dan Rognar Holding B.V. and Japanese firm Sojitz Corp, with the latter two owning 39 percent and 10 percent stakes respectively, according to its website.

Source: Reuters

LondonCommodity Richards Bay Coal Terminal Exports Rose 5 Percent in March

South Africa's Richards Bay Coal Terminal, the world's largest coal-export facility, shipped 5 percent more coal in March than the same month a year earlier.

The terminal on South Africa's northeast coast shipped 4.85 million metric tons of the fuel, up from 4.62 million tons, the terminal said in an e-mailed response to questions today.

Richards Bay Coal is owned by South Africa's largest coal exporters, including Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc. While it is the world's biggest coal-export terminal, Australia's Newcastle port ships more of the fuel from two terminals.

The terminal received 5.19 million tons of coal by rail last month and had stocks of 3.48 million tons at the end of March. Fifty-eight ships were loaded during the month and 811 trains arrived at the facility.

Coal shipped from the terminal traded at an average of $62 a ton in the week ended April 3, according to Petersfield, England-based McCloskey Group.

Source: Bloomberg

Associated Press Stocks fall after 4-week rally; Dow below 8,000

NEW YORK (AP) -- Wall Street pulled back for the first time in five days Monday as investors worried about balance sheets at banks and the quarterly results that businesses will start releasing this week.

Investors were also disappointed that talks for IBM Corp.'s $7 billion deal to buy Sun Microsystems Inc. have stalled -- a sign that the market is still not ready to support big mergers.

Financial shares sold off after a prominent analyst predicted more losses at banks and said the government's efforts to prop up the ailing industry might not be as effective as hoped.

Michael Mayo issued "sell" ratings on several banks and said in his report that loan losses could exceed levels seen in the Great Depression.

The market was already on edge about the coming parade of first-quarter results, which kicks off Tuesday with aluminum producer and Dow component Alcoa Inc. Worse-than-expected reports could easily upset the market's recent advance, which brought stocks up more than 20 percent from early March, when they hit their lowest levels in 12 years.

"You have some skittishness in the market," said Len Blum, managing director at Westwood Capital LLC. "We have earnings season up ahead and it's very difficult to predict what that is going to do."

The Dow Jones industrials fell 41.74, or 0.5 percent, to 7,975.85 after being down as much as 155 points.

The Standard & Poor's 500 index fell 7.02, or 0.8 percent, to 835.48, while the Nasdaq composite index fell 15.16, or 0.9 percent, to 1,606.71.

Technology stocks were lower following the IBM-Sun news. Discussions between the technology giants had been in their final stages, but The Associated Press learned that IBM took its offer off the table Sunday after Sun terminated IBM's status as its exclusive negotiating partner. more...

CNBC Fresh Signs of Economic Bottom May Take More Time

Optimists looking for fresh signs of a recessionary bottom will have to wait until next week to find more evidence—as indicated by Friday's payrolls report—that the worst is over. “This week is a tough week because there isn’t anything to sink our teeth into,” says one such optimist, Robert Brusca, chief economist at Fact & Opinion Economics.

At best, there's the weekly initial jobless claims Thursday, which could confirm what some see as part of a recent trend suggesting improvement is near.
The more heavyweight data, however, comes next week with monthly reports on the retail, housing and industrial sectors.

“The key is in things like orders for manufactured goods, home sales, car sales,” says David Resler, chief economist at Nomura Securities. "Those are going to tell us how close to a bottom we are.”

Retail Rules
March retail sales, due out April 14, certainly will be a headline report.
“Retail sales is all important,” says Ram Bhagavatula, managing director at the hedge fund, Combinatorics Capital. “You need to see persistent increases in retail sales.”

Right now, momentum is heading in the right direction. Sales climbed in both January and February after an extraordinary and highly unusual two-quarter contraction in the second half of 2008.

Based on surprisingly strong auto sales data for March, released last week, the consensus for March retail sales has brightened to possibly a third consecutive monthly increase. Excluding autos, sales are expected to rise 0.7 percent, according to Briefing.com’s survey.

“Auto sales are kind of encouraging,” says Brusca, who says it’s still too soon to say which way the headline retail sales number will go. “The consumer is holding up his end of the bargain.”

That may also finally be true of housing. Housing starts and building permit data scheduled for release April 16 may show another increase.

“We may be at the point where builders need to start putting up homes again," says Resler. Though much has been made of the glut in new homes in the past two years, inventory has shrunk sharply and is now near historically normal levels. In addition, “inventory may not be evenly dispersed,” says Resler.

More indicative housing data—existing and new home sales—however, won’t be out until April 23-24. If retail and housing are indeed in the process of bottoming, then there may be another pleasant surprise next week—the University of Michigan’s preliminary report on consumer sentiment in April.

“I think you could get a little bounce there, reflecting the improvement in the stock market,” says Bank of America Securities Chief Economist Mickey Levy, who emphasizes that the index has been hovering at a very low level.” more...

CNBC US Recovery Is Far Off, Banks Are 'Basically Insolvent': Soros

The U.S. economy is in for a "lasting slowdown" and could face a Japan-style period of relatively low growth coupled with high inflation, billionaire investor George Soros said on Monday.

Soros, speaking to Reuters Financial Television, also warned that rescuing U.S. banks could turn them into "zombies" that draw the lifeblood of the economy, prolonging the economic slowdown.

"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.

Soros' view contrasts with the majority of economists, who expect the U.S. economy to stop contracting in the third quarter and resume growing in the fourth quarter, according to the latest monthly poll of forecasts conducted by Reuters.

The recovery will look like "an inverted square root sign," Soros said. "You hit bottom and you automatically rebound some, but then you don't come out of it in a V-shape recovery or anything like that. You settle down—step down."

The healing of the banking system and housing markets is crucial to recovery. "The banking system, as a whole, is basically insolvent," Soros said.

What's more, the Treasury's Public-Private Investment Fund is going to work but it won't be enough to recapitalize the banks in a way that they are able to or willing to provide credit.

"What we have created now is a situation where the banks who will be able to earn their way out of a hole, but by doing that, they are going to weigh on the economy," he said. "Instead of stimulating the economy, they will draw the lifeblood, so to speak, of profits away from the real economy in order to keep themselves alive. This is the zombie bank situation."

The stress tests being conducted by Treasury could be a precursor to a more successful recapitalization of the banks, he added. more...

JPM - View from the Bund - China

JPM - View from the Bund - China

* Key investment theme: We turn more positive on the MSCI China, a stance we initiated in the last issue of VFB in early March, despite the index gaining 25% from its low on March 2. Fundamentals continued to move in the right direction, strengthening our conviction that the Chinese economy had bottomed out in 4Q08 in sequential terms. We are encouraged by the continued strength in domestic end-demand, especially the sustained recovery in property transaction volume and auto sales.

* The NBS-PMI moved above 50 in March, as we expected. We expect loan growth to stay strong and new loans to exceed Rmb7T for the full year. We already see reductions in all three key recovery risks: 1) deflation expectations; 2) policy complacency; 3) deteriorating exports, which have led to a meaningful increase in our FY09E earnings outlook, with our top-down FY09E EPS growth rising to 7.4% from -5.2% (vs consensus’ 3.5%). We believe the earnings risks for 2009 are on the upside. We stress that, while the monetary and fiscal stimuli-related FAI strength is important, domestic consumer strength is also key to driving the China recovery. The consumption-led economic recovery in China, if sustainable, could help further re-rate MSCI China, which at 43.6 is trading at 11x FY09E P/E. We expect it to reach 50, with the H-shares hitting 10,000 by end-09. At this level, we believe MSCI China should be valued at 12.5x forward P/E (still below 10-year P/E 13x average).

* What is changing: While strong property transaction volumes continue, property prices in some cities have started to rise.

* Information: The call for a “super currency” shows China in a difficult situation for FX reserve diversification.

* Non-consensus calls: We believe: (1) credit expansion has further room; 2) the government will increase residential electricity prices to fend off the risk of deflation expectations.

Bank Danamon Rate cuts decelerated Why?

Rate cuts decelerated: Why?
By Helmi Arman Economist Treasury & Capital Markets PT Bank Danamon Indonesia, Tbk

Apr-09 Mar-09 Feb-08 Jan-09 Dec-08
Bank Indonesia Policy Rate 7.50 7.75 8.25 8.75 9.25
Headline CPI (% chg y-o-y) n/a 7.92 8.60 9.17 11.06
Headline CPI (% chg m-o-m) n/a 0.22 0.21 -0.07 - 0.04

Source: Bank Indonesia, BPS, CEIC

Economic Highlights

* After cutting 50bps in the previous month,Bank Indonesia cut its policy rate by only 25bps today to 7.50%. This month's cut was milder than our expectation but in-line with consensus.

* The deceleration comes despite signs of further deterioration of economic growth and easing inflation. However it may be signaling BI's cautiousness on inflation prospects after 2009. There may also have been wariness over Indonesia's interest rate differentials which were cited as being negative in "covered" terms, although we think interest rate differentials are currently very far down on the list in explaining recent exchange rate movements.

* Policymakers indicated there may still be more room for further rate cuts. This is consistent with our view and we think the BI rate might bottom at 7.00% this year. However it may move at a slower pace going forward; we expect two more 25bp rate cuts in May and June.

* Separately BI announced foreign reserves stood at US$54.8bn, up from 50.6 in Feb. This should be viewed positively. The increase appears attributable to more than the US$3bn global MTN issuance of early March, suggesting there may have been improvements in other components of the BOP such as (probably) the current account.


Market Implications
* BI's deceleration of rate cuts might serve to tone down market expectations on where the rate cycle will bottom. With the 1-yr t-bill currently yielding about 9.3%, we don't think the market has fully priced-in a 7.00% bottom for the BI rate yet. Nonetheless although the price impact of even a 0.5ppt yield decline in the 1-yr is relatively modest, we still think the short-end remains the part of the curve that will remain well-anchored.

* Monetary policy transmission?As for as March data goes, the base lending rate has only moved down marginally (see chart 2). This condition will probably persist until the full extent of the current economic slow-down becomes clearer. Meanwhile average deposit rates have eased by a relatively larger extent, although still slower than what many policymakers may desire. Nonetheless, we hope the continued rise in interbank market trading volumes should be a positive trend that would allow deposit rates to go down further going forward.