NISP Bank Mandiri provides incentives for Bakrie Sumatera Plantation (BMRI, Rp6,650; UNSP, Rp360)

· Bank Mandiri provides several incentives for BSP to support the acquisition of Domba Mas. The bank offers the combination of terminable interest and penalty on Domba Mas’ US$78mn loans.

· With this facility, BSP requires only to pay the principal as the bank is restricted to offer loans haircut in restructuring scheme.

· Currently, this acquisition plan is still in negotiation phase as there are difference on loans acknowledgement between BSP and Bank Mandiri.

· Currently UNSP is trading at 2011F consensus PER of 9.9x and EV/EBITDA of 7.3x, while BMRI at 2011F consensus PER of 13.6x and PBV of 2.9x.

NISP House of Representatives asks for Mandiri right issue target to be increased (BMRI, Rp6,250)

· The House of Representatives has asked the target from the BNI and Mandiri rights issue to be increased to Rp25.00tn. Initially BNI (BBNI, Rp3,475) has targeted to raise Rp9.00tn while Mandiri targets to obtain Rp13.00-14.00tn.
· Mandiri is still waiting for the approval from the House, so that the rights issue can be held before December 13, 2010 . 2.36bn new shares will be issued by Mandiri where each old share will have the right to purchase 8.5-9 new shares. Target price has not been set, however the company hopes that market price during the rights issue will be around Rp6,300-Rp6,700.
· The consortium of Mandiri Sekuritas and Danareksa Sekuritas has appointed Merril Lynch and Deutsche Bank as joint global coordinator, while book runners will be Citigroup and CLSA.
· BMRI is trading at 2011F PER consensus of 12.8x and PBV of 2.8x.

Mandiri Sekuritas Bank Central Asia: 1H10 results below our expectation, yet inline with consensus estimates (BBCA, Rp6,200, Buy, TP: Rp6,800).

􀂄 BCA reported net income of Rp3.98 bn, below our expectation yet inline with consensus estimates.
􀂄 The bank recorded lower than expected net interest income as the bank lowered its lending rate (ranging between an average 10 bps to 50 bps) following the decline in SBI rates. We previously expect that the bank would maintain its lending rate given its strong position in the industry.
􀂄 Meanwhile, loans was quite strong at 8.9% qoq to Rp131.6tn at end Jun10 with consumer loans posted the highest growth of 10.7% qoq to Rp31,4 tn. Mortgage continued to be the largest contributor to total consumer loans, representing 49% at end Jun10. The bank’s average yield on mortgage declined to 10.4% in 2Q10 from 10.6% in 1Q10.
􀂄 Despite its lower than expected results, we still like BCA for the bank will benefit most from the rising interest rate environment (our economist estimates that SBI rate will likely go up in 4Q10) given its huge excess liquidity (secondary reserves recorded at Rp76.6tn at end Jun10).
􀂄 At current price, the stock is trading at 2011F at 3.9x and PER of 13.1x. We maintained our buy recommendation on the counter.

Mandiri Sekuritas ISAT: 1Q10 net income up 139%yoy, but lags behind expectations (ISAT, Rp6,050, Buy, TP: Rp5,400)

1Q10 net income was up by 139%yoy to Rp286bn, despite the jump, this fell below expectation as it represented only 18% and 16% our and consensus FY10F. Net adds in 1Q from 4Q09 was about 5.98mn (vs 4.4mn if 3Q09-4Q09), thus bringing its total cellular subscribers to some 39.1mn. With this, operating revenues grew by 2.5%yoy to Rp4.7tn, while EBITDA also grew by 3.3%yoy to Rp2.24, while maintaining a margin of 47%. The complete results and 1Q financial statements shall be released by May 10, 2010. We currently are reviewing our estimates and assumptions on Indosat, which trades at PER10F of 20.1x.x