Bloomberg Bakrie Shares Rise to Five-Month High on

April 20 (Bloomberg) -- PT Bakrie & Brothers, an investment group controlled by the family of Indonesia’s welfare minister, soared to a five-month high in Jakarta trading on speculation the stock is undervalued.

Bakrie & Brothers jumped as much as 29 percent to 98 rupiah at 3:11 p.m. local time, set for its highest since Nov. 20, while the Jakarta Composite index gained 0.3 percent. Shares of affiliates such as PT Bumi Resources also rose.

The stock had traded at 50 rupiah, the minimum price allowed by the bourse, for more than four months until April 16 on concerns Bakrie & Brothers couldn’t repay debt. The stock market rose 12 percent last week after peaceful legislative elections on April 9.

The gains in Bakrie are “highly speculative,” said John Teja, head of sales at Jakarta-based PT Ciptadana Securities. “The market’s rally after the smooth elections prompted people to buy Bakrie shares again.”

Bumi, Asia’s largest coal exporter, jumped 19 percent to 1,420 rupiah as the stock is also deemed undervalued, Teja said. PT Energi Mega Persada, the smaller of Indonesia’s two listed oil companies, added 20 percent, to 164 rupiah.

Bakrie & Brothers owns 35 percent and 40 percent of Bumi and Energi Mega, respectively, according to a company presentation sheet in October.

Other affiliates also rose. PT Bakrie Sumatera Plantations gained 14 percent to 520 rupiah and PT Bakrieland Development advanced 13 percent to 162 rupiah.

For Related News and Information:
Bakrie’s price-to-earning ratio: BNBR IJ GF
Stock index one-year price graph: JCI GP
Stories on Indonesia’s stock market: TNI INDO STK BN
Stories on Asia’s stock market: TNI ASIA STK BN
Search for Indonesia stories: NSE Indonesia

Bloomberg Indonesia May Cut Coal Output Growth Forecast as

April 20 (Bloomberg) -- Indonesia, the world’s biggest exporter of power-station coal, may produce less of the fuel than estimated after prices dropped and demand from overseas buyers fell.

The Indonesian Coal Mining Association may cut output growth forecast to 5 percent this year from as much as 8 percent, Bob Kamandanu, chairman of the producer group, said in an interview in Jakarta today.

The global recession has reduced electricity consumption, prompting power generators to lower purchases of coal. China, the world’s second-biggest energy user, will continue to have a surplus of coal in the short term as a slowing economy curbs demand, Wang Xianzheng, head of the China National Coal Association, said today.

“In the first two months we saw domestic buyers boosting purchases because of low stockpile s in the fourth quarter while exports fell a little,” Kamandanu said. “We don’t know whether this will continue or we’ll see an easing” in domestic
purchases.

Indonesian companies mined about 239 million metric tons of coal last year, he said.

Energy and Mineral Resources Ministry said coal output from major producers may reach 230 million tons this year and increase to 250 million tons next year. The coal association’s former chairman, Jeffrey Mulyono, said on March 4 that output
may range between 250 million and 260 million tons this year.

Coal Prices
Indonesian companies produced 38.23 million tons of coal and exported 28.35 million tons in the first two months of the year, compared with last year’s 37.6 million tons of output and 32.2 million tons in exports, Kamandanu said.

Kamandanu, who is also head of coal miner PT Berau Coal, said the international coal price index may average $60 to $75 a ton this year.

Weekly price index for coal from Australia’s Newcastle, the world’s biggest port for the fuel, surged to a record $192.50 a ton in July, before closing 2008 at $79.50 a ton, according to McCloskey Group Ltd. The index averaged $129 a ton in 2008.

“The surge last year was like a bubble waiting to burst,” Kamandanu said. “China still has lots of supplies, while the Australian dollar’s weakness will benefit Australian producers,” he said, adding that demand may pick up later this year.

Coal from Newcastle rose 1.3 percent to $61.80 a ton in the week to April 10, according to data from McCloskey.

For Related News and Information:
Top Stories: TOP
For coal prices: COAL
To energy stories: TOP NRG
Indonesian coal stories: NSE INDONESIA COAL IN WIRE: BN

CIMB Coal Mining Sector Note - Prices trending up

We remain Neutral on the Indonesian coal sector although we have upgraded bargains in the sector, following lower coal price assumptions for FY09-10 but higher forecasts for FY11-12. We now expect an uptrend from FY09, peaking in FY11-12, driven by a China-led global demand recovery and another potential supply crunch in FY11-12. Our coal price revisions have lowered our FY09-10 EPS estimates for coal companies by 6-25%, but raised FY11-12 estimates by 25-35%. We have also adjusted WACC assumptions for some stocks, switching out of 2-stage discounts. The laggards and bargains are now preferred. We upgrade Bumi to Trading Buy from Underperform, downgrade Indo Tambang to Trading Sell (Neutral previously), downgrade Bukit Asam to Neutral (Outperform previously), and maintain Outperform on Adaro.

Danareksa United Tractors Rich Valuation

Sales forecasts lowered
Heavy equipment sales in the year up to March 09 reached only 628 units or 21% of our full year target of 3,000 units. In March alone, the company delivered just 189 units as bad weather resulted in delayed delivery to Pama while third-party sales remained sluggish. Against this backdrop, we reduce our 09-10F heavy equipment sales forecasts by 17-14% to 2,500-3,000 units.

Coal production is still lagging, but should improve
Pama’s coal production rose 11% mom to 5.1mn tons in March 09. Even though total production in the year up to March 09 is only 22% of our FY09F forecast of 65.9mn tons, we remain confident that the target can be reached since 1H production is always lower than 2H production due to adverse weather conditions. Similarly, DEJ’s performance has also been hit by bad weather– its sales in the year up to March 09 are a mere 17% of our full year target of 4mn tons. Nonetheless, sales did pick up in March; in which month DEJ’s sales climbed 8% mom to 254,000 tons on improving weather conditions. All in all, we maintain our assumptions for Pama’s production and DEJ’s sales.



09-10F net earnings cut by 1.2%-4.7%
We reduce our 09-10F net earnings by 1.2%-4.7%. This change reflects: (1) lower equipment sales, (2) 4-7% lower 09-10F DEJ ASP at $75-73/ton after applying our new lower JFY 09-10F benchmark coal price assumption of $75-80/ton based on the Asian coal contract settlements, and (3) higher forecast spare part and service sales which we now expect to grow 15% yoy since the company indicated that sales before elimination (to subsidiaries) per Feb 09 were higher than our previous forecast of 10% yoy.

The valuation is too rich, SELL
Our TP is maintained at Rp6,100, implying 8.4-7.7x 09-10F PE. However, we believe the shares are now rather expensive following the recent rally in the share price (the stock currently trades at 09-10F PE of 11.1-10.1x). On this basis we advise clients to take profits and SELL the stock.

[BRIGHT INFO] Our Focus: Summarecon “Wonderful Life – Wonderful World”

Global economic conditions that show signs of recovery responded activly by the national banking sector. Among the banking sector began incessant provides loans on the property sector.

Central bank is also lending support in the central sector properti. Bank support sekuritisasi or credit with an “EBA” that is still considered less than optimal. From the data that is owned by Bank Indonesia, in December 2008 credit construction reached Rp 48 trillion. Then, real estate credit Rp 28 trillion, and Rp 122 trillion KPR.

The property association estimates that the position of BI rate could reach 7.25% this will have positive impact on the property sector. Achieving the property sector this year is estimated to grow 30% from the realization years ago. The property credit portion last year reached Rp 202 trillion.

The Property price in Indonesia still survive, this is in contrast with conditions in other countries. Because the property price increasing following of inflation only in the last few years. KPR ratio of GDP only about 2% compared with other countries which reached 10%, that’s why the property price in Indonesia is quite stable.

With the SBI at this time on 7.5%, the KPR interest rate could decrease to about 11% from the current position that is still in the range 13-14%. We believe with the decline in interest rates for KPR could increase demand in the property sector. Government has urged banks to immediately reduce the interest rate loan. Sales Segment "Landed residential" relative still growing.

Why Summarecon?
Although Summarecon Agung Tbk PT (SMRA) delays the development project in Bekasi West residensialnya due to global crisis, we believe the delay will not affect much of the growth performance SMRA.

Company still has a strong portfolio of income from the sale of various products in the real estate in two major areas, namely, and Kelapa Gading Serpong. Income was also strengthened by the results that are big enough to rent from Mal Kelapa Gading (MKG), which continues to experience growth. The advantages which also owned other SMRA is its brand image are strong in the consumers as well to develop the area and Kelapa Gading Serpong. SMRA is always maintaining the quality and accuracy of the time.

In this year, Summarecon already set up two new projects that target the med-high segment. The project is the first residential development Grand Orchad builds Kelapa Gading with approximately 750 housing units on the land area of 48 hectares. "The first phase will begin in March 2009 for 18 months," (Corporate Secretary Summarecon Agung).

Grand Orchad development plan will be divided into 5 stages of development with 150 units in each tahapannya. The project is the second Sientia Garden Serpong with 100 hectares. Same as the first project, Sientia Garden will also be built in five phases. Each stage built on the land area of 20 hectares with the number of houses about 500 units. The first stage had "Sold Out".

Although there appeared to slowing economic growth data SMRA sales increased by 5% yoy to be Rp.920triliun 2008. In addition, the new tax regime for final sales tax will change to 5% of the income that the company began in 2009 will bring a positive issue, considering the company's effective tax will lower. The effective tax will decrease to 25% -31% in the years 2009-2011 the amount of tax from 44% effective in 2008. This will boost profits.

We believe that the property with more than 50% discount to RNAV have the interesting "entry point" and promising for investment. Our Top Pick at this time are Summarecon Agung SMRA: IJ, valuation has a very interesting basis with approximately 58% discount to RNAV. We estimate the revenue and net income SMRA for the year 2009 will reach Rp 1.48 trillion and Rp 160 billion.
We recommend Buy with a Target idr420.

SMRA:IJ Summarecon Agung Tbk PT, Industry: Real Estate Oper/Develop










[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.