We have downgraded our WACC estimate drastically from 16.4% to 9.6%, taking into account the reductions in (1) risk-free rate assumption from 11.0% to 6.2% (2) Market risk premium from 7.2% to 5% and (3) Beta estimate of 1.4x to 1.1x.
The benefit of lower WACC has however been offset by our lower exchange rate assumption. Besides this, we also fine-tune our assumptions for production and fuel rate. After all changes, our DCFderived target price fell from Rp2,400/share to Rp2,100/share.
Market has seen a rally in last 2 months with JCI up by about 50%ytd, but BYAN’s share price outperformed the market, rising by 511%ytd. As our DCF-derived target price is 62.8% lower than the current price, we affirm our Sell call on BYAN.
Long term catalyst for the stock is the BYAN plans to upgrade majority of its coal from 4,217 kcal coal to 6,263 kcal. However, in the absence of complete information we have not considered the impact of upgradation in our DCF derived target price.
Senin, 22 Juni 2009
Bloomberg Emerging-Market Stocks Will Advance 32%, Garner Says
June 19 (Bloomberg) -- Developing-nation stocks may rise 32 percent in the next 12 months as a faster-than-expected earnings recovery fuels a long-term bull market, Morgan Stanley said.
The MSCI Emerging Markets Index may climb to 985 by June 2010 from its closing price of 743.72 yesterday, Jonathan Garner, Morgan Stanley’s chief Asian and emerging-market strategist, wrote in a research note. Profits will rebound 28 percent next year after a 15 percent slide in 2009, Garner wrote. That compares with his earlier forecast for a 20 percent gain in 2010 and a 25 percent drop this year.
The London-based strategist still reduced his recommended allocation to developing-nation equities, saying he’s “tactically cautious” because the global economic recovery may stall. The MSCI gauge may slide as much as 33 percent from its 2009 high during the next three months as weaker economic data from China and the U.S. spark a “correction,” Garner wrote.
“We continue to believe that Asia, emerging-market equities are in a secular bull market,” Garner wrote. Still, “we would not chase the market here over the summer months.”
The MSCI index climbed 1.1 percent as of 9:58 a.m. in New York. The 22-country benchmark surged 55 percent from February through May, a record three-month advance, on speculation earnings will rebound as the global recession eases. The rally stalled this month as valuations reached the most expensive level since December 2007.
‘Correction’
Garner’s previous forecast for the MSCI gauge was for a rally to 810 by the end of 2009. He reduced his recommended equity allocation to 54 percent of an emerging-market portfolio from 56 percent and advised investors to increase cash holdings to 5 percent from 3 percent.
Garner’s call for a “correction” in emerging-market stocks contrasts with a more bullish short-term outlook from Adrian Mowat, JPMorgan Chase & Co.’s Hong Kong-based chief Asian and emerging-market strategist.
Mowat wrote in a report dated yesterday that he sees “no obvious fundamental triggers for correction” and investors should take advantage of this month’s retreat in stocks to “position” for further gains through the end of the year.
“Potentially, we are in a powerful rally in emerging- market equities,” Mowat said.
Developing nations may grow their share of global gross domestic product to about 35 percent by next year from 20 percent a decade ago, Garner said. That will help boost emerging markets’ weightings in global stock indexes, he added.
“We anticipate that demographic trends and the adoption of the market economy in most EM countries will sustain the recent trend towards a more EM-centered global economy,” Garner wrote.
To contact the reporters on this story: Chen Shiyin in Singapore at schen37@bloomberg.net ; Michael Patterson in London at mpatterson10@bloomberg.net .
The MSCI Emerging Markets Index may climb to 985 by June 2010 from its closing price of 743.72 yesterday, Jonathan Garner, Morgan Stanley’s chief Asian and emerging-market strategist, wrote in a research note. Profits will rebound 28 percent next year after a 15 percent slide in 2009, Garner wrote. That compares with his earlier forecast for a 20 percent gain in 2010 and a 25 percent drop this year.
The London-based strategist still reduced his recommended allocation to developing-nation equities, saying he’s “tactically cautious” because the global economic recovery may stall. The MSCI gauge may slide as much as 33 percent from its 2009 high during the next three months as weaker economic data from China and the U.S. spark a “correction,” Garner wrote.
“We continue to believe that Asia, emerging-market equities are in a secular bull market,” Garner wrote. Still, “we would not chase the market here over the summer months.”
The MSCI index climbed 1.1 percent as of 9:58 a.m. in New York. The 22-country benchmark surged 55 percent from February through May, a record three-month advance, on speculation earnings will rebound as the global recession eases. The rally stalled this month as valuations reached the most expensive level since December 2007.
‘Correction’
Garner’s previous forecast for the MSCI gauge was for a rally to 810 by the end of 2009. He reduced his recommended equity allocation to 54 percent of an emerging-market portfolio from 56 percent and advised investors to increase cash holdings to 5 percent from 3 percent.
Garner’s call for a “correction” in emerging-market stocks contrasts with a more bullish short-term outlook from Adrian Mowat, JPMorgan Chase & Co.’s Hong Kong-based chief Asian and emerging-market strategist.
Mowat wrote in a report dated yesterday that he sees “no obvious fundamental triggers for correction” and investors should take advantage of this month’s retreat in stocks to “position” for further gains through the end of the year.
“Potentially, we are in a powerful rally in emerging- market equities,” Mowat said.
Developing nations may grow their share of global gross domestic product to about 35 percent by next year from 20 percent a decade ago, Garner said. That will help boost emerging markets’ weightings in global stock indexes, he added.
“We anticipate that demographic trends and the adoption of the market economy in most EM countries will sustain the recent trend towards a more EM-centered global economy,” Garner wrote.
To contact the reporters on this story: Chen Shiyin in Singapore at schen37@bloomberg.net ; Michael Patterson in London at mpatterson10@bloomberg.net .
Bloomberg Japan Business Confidence Rebounds; Demand for Services Rises
June 22 (Bloomberg) -- Japanese manufacturers became less pessimistic this quarter and demand for services rose in April amid signs the country’s worst postwar recession is easing.
Sentiment was minus 13.2 points this quarter compared with minus 66 three months earlier, a joint survey by the Cabinet Office and Finance Ministry showed today. The tertiary index, a gauge of money spent on phone calls, power and transportation, climbed 2.2 percent from March, the Trade Ministry said.
The Nikkei 225 Stock Average has climbed 39 percent since dropping to a 26-year low on March 10, buoyed by speculation $2.2 trillion in stimulus spending by governments worldwide will rekindle overseas demand for Japanese products. Tax breaks and shopping incentives introduced by Prime Minister Taro Aso have helped lift consumer confidence to a 14-month high.
“There’s a recovery on the way for Japan,” said Jan Lambregts, head of Asian research at Rabobank International in Hong Kong. “There’s a lot of stimulus there and that will help, but not all of the growth is coming back.”
The yen traded at 96.12 per dollar as of 8:55 a.m. in Tokyo from 96.08 before the reports were published. A negative reading on business confidence means pessimists outnumber optimists.
Easing pessimism among Japan’s manufacturers has much to do with the outlook for China, where $586 billion in government spending on construction projects and consumer incentives is feeding demand for Japan’s heavy equipment, cars and materials. The World Bank last week raised its growth forecast for China to 7.2 percent from a March estimate of 6.5 percent.
Stimulus Fillip
Japanese companies are already benefiting. Nissan Motor Co.’s sales to China rose 37 percent in April from a year earlier. About two-thirds of the cars the company sells in China are eligible for a government subsidy that halves the sales tax on vehicles with smaller engines.
Japan’s own stimulus measures -- 25 trillion yen ($260 billion) pledged since October -- have started to take hold. Sales of electronics are by up 18 percent since the government last month introduced a program to encourage consumers to buy eco-friendly products, according to Tokyo-based researcher Gfk Marketing Service Japan Ltd.
Industrial production rose at the fastest pace in 56 years in April as companies replenished stockpiles they managed to run down during the worst of the export collapse. The rebound in output prompted the Bank of Japan and the government to raise their assessments of the economy in the past two months.
Smaller Economy
Still, two quarters of record contractions in gross domestic product have shrunk the economy down to its 2003 size. Exports and production have fallen by more than a third from last year’s levels.
That’s putting pressure on managers to cut jobs and forcing companies to slash investment, spending that would normally trickle down to the smaller business that make up 70 percent of the economy. A survey published this month by the Nikkei newspaper showed companies, saddled with equipment they no longer need, plan to cut capital spending by an unprecedented 15.9 percent this business year.
“Consumer spending will probably stay relatively solid in coming months, supported by stimulus measures,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. “But it’s highly likely to weaken as the wage and labor market deteriorate further.”
The unemployment rate rose to a five-year high of 5 percent in April and economists surveyed by Bloomberg expect it to climb to a record 5.8 percent next year. About two work seekers are competing for a single spot, the most severe job shortage on record.
Today’s business confidence report offers a hint of the results likely in the Bank of Japan’s Tankan survey due July 1. That report, the nation’s most closely watched gauge of corporate confidence, will show sentiment among large manufacturers improving from March’s record low, according to economists surveyed.
To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Toru Fujioka in Tokyo at tfujioka1@bloomberg.net
Sentiment was minus 13.2 points this quarter compared with minus 66 three months earlier, a joint survey by the Cabinet Office and Finance Ministry showed today. The tertiary index, a gauge of money spent on phone calls, power and transportation, climbed 2.2 percent from March, the Trade Ministry said.
The Nikkei 225 Stock Average has climbed 39 percent since dropping to a 26-year low on March 10, buoyed by speculation $2.2 trillion in stimulus spending by governments worldwide will rekindle overseas demand for Japanese products. Tax breaks and shopping incentives introduced by Prime Minister Taro Aso have helped lift consumer confidence to a 14-month high.
“There’s a recovery on the way for Japan,” said Jan Lambregts, head of Asian research at Rabobank International in Hong Kong. “There’s a lot of stimulus there and that will help, but not all of the growth is coming back.”
The yen traded at 96.12 per dollar as of 8:55 a.m. in Tokyo from 96.08 before the reports were published. A negative reading on business confidence means pessimists outnumber optimists.
Easing pessimism among Japan’s manufacturers has much to do with the outlook for China, where $586 billion in government spending on construction projects and consumer incentives is feeding demand for Japan’s heavy equipment, cars and materials. The World Bank last week raised its growth forecast for China to 7.2 percent from a March estimate of 6.5 percent.
Stimulus Fillip
Japanese companies are already benefiting. Nissan Motor Co.’s sales to China rose 37 percent in April from a year earlier. About two-thirds of the cars the company sells in China are eligible for a government subsidy that halves the sales tax on vehicles with smaller engines.
Japan’s own stimulus measures -- 25 trillion yen ($260 billion) pledged since October -- have started to take hold. Sales of electronics are by up 18 percent since the government last month introduced a program to encourage consumers to buy eco-friendly products, according to Tokyo-based researcher Gfk Marketing Service Japan Ltd.
Industrial production rose at the fastest pace in 56 years in April as companies replenished stockpiles they managed to run down during the worst of the export collapse. The rebound in output prompted the Bank of Japan and the government to raise their assessments of the economy in the past two months.
Smaller Economy
Still, two quarters of record contractions in gross domestic product have shrunk the economy down to its 2003 size. Exports and production have fallen by more than a third from last year’s levels.
That’s putting pressure on managers to cut jobs and forcing companies to slash investment, spending that would normally trickle down to the smaller business that make up 70 percent of the economy. A survey published this month by the Nikkei newspaper showed companies, saddled with equipment they no longer need, plan to cut capital spending by an unprecedented 15.9 percent this business year.
“Consumer spending will probably stay relatively solid in coming months, supported by stimulus measures,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. “But it’s highly likely to weaken as the wage and labor market deteriorate further.”
The unemployment rate rose to a five-year high of 5 percent in April and economists surveyed by Bloomberg expect it to climb to a record 5.8 percent next year. About two work seekers are competing for a single spot, the most severe job shortage on record.
Today’s business confidence report offers a hint of the results likely in the Bank of Japan’s Tankan survey due July 1. That report, the nation’s most closely watched gauge of corporate confidence, will show sentiment among large manufacturers improving from March’s record low, according to economists surveyed.
To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Toru Fujioka in Tokyo at tfujioka1@bloomberg.net
Bloomberg Bumi Resources Seeks Approval on Asset Pledge: Week Ahead
June 22 (Bloomberg) -- PT Bumi Resources, Asia’s largest power-station coal exporter, will seek approval from shareholders to pledge assets to get loans.
Investors at the June 26 meeting will decide whether to use assets, including shares in units, inventory and escrow accounts, as collateral for “current or future” financing, the company said in a June 5 filing to the Indonesia Stock Exchange.
Bumi owns majority stakes in two coal miners, which account for about a quarter of the output of Indonesia, the world’s biggest exporter of thermal coal. The shareholder meeting was initially scheduled to take place in February.
Bumi in January announced three transactions valued at 6.12 trillion rupiah ($586 million). The company has said it would seek to renegotiate the price of one of the acquisitions after Indonesia’s market regulator said it was paying more than the
value of the company.
In the June 26 meeting, shareholders will also vote on the dividend distribution from 2008 earnings and changes in board of commissioners.
For Related News and Information:
Stories on Bumi Resources: BUMI IJ CN
Most-read Indonesian stories this week: MNI INDO 1W
Investors at the June 26 meeting will decide whether to use assets, including shares in units, inventory and escrow accounts, as collateral for “current or future” financing, the company said in a June 5 filing to the Indonesia Stock Exchange.
Bumi owns majority stakes in two coal miners, which account for about a quarter of the output of Indonesia, the world’s biggest exporter of thermal coal. The shareholder meeting was initially scheduled to take place in February.
Bumi in January announced three transactions valued at 6.12 trillion rupiah ($586 million). The company has said it would seek to renegotiate the price of one of the acquisitions after Indonesia’s market regulator said it was paying more than the
value of the company.
In the June 26 meeting, shareholders will also vote on the dividend distribution from 2008 earnings and changes in board of commissioners.
For Related News and Information:
Stories on Bumi Resources: BUMI IJ
Most-read Indonesian stories this week: MNI INDO 1W
[BRIGHT INFO] "Just a Note"
Good day to you.The DJAI fell 0.19 %. But the S&P added 0.31 % and the Nasdaq rose 1.09 %. DJIA Loses 3 % for the week.
Major Southeast Asian stock markets rose on Friday as index heavyweights attracted bargain hunters, with Singapore ending a six-day fall and Thai stocks up after interest rate comments from the Bank of Thailand.
Markets in the region tracked improving sentiment elsewhere in Asia as U.S. factory and jobs data provided more evidence that the global economy was starting to recover from its deep recession.
Recent sell-offs in Southeast Asian stocks had led to cheaply valued shares but investors were still looking for fresh reasons to buy. A U.S. Federal Reserve policy meeting next week may provide such a trigger, with signals on the economy.
The Indonesian index JCI was up 2 % on Friday, ending a 6.8 % fall over the previous four days, pushed up by a 4 % surge in Astra International and a 7.5 % gain in top lender Bank Mandiri.
Crude oil for July delivery fell $1.82, or 2.6 percent, to $69.55 a barrel on Friday on speculation that supplies of the motor fuel will climb as refineries bolster output and imports gain. Coal on Newcastle Port tumbled 7.74% from last week to $70.81. Tin fell 0.8 % to $14,825 a ton, while nickel rose 1.3 % to $15,200 a ton. Malaysian palm oil futures ended softer on Friday for the third consecutive day, touching a new 10-week intraday low.
Nothing changes on our fundamental economic but we must watch political situation carefully. Rupiah movement was one of trigger on our market. After surged at 10600 on Friday Morning rupiah pull back and strengthen to 10300.
My Top Pick is still same, TLKM, ANTM, INCO, TINS, BUMI, BNBR, and DEWA. Start Looking for BBRI, UNTR and PGAS as government wants 90% dividend from net profit. Especially on TINS, I think TINS will be very attractive this week with around 6% dividend yield.
“Do we need to rest here? Do we need to pull back? Or can it continue? "
[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.
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