U.S. stocks were end lower ahead of jobs data and sent all the three main indexes to negative area after posting strong gains over the past few days. The Dow Jones Industrial Average slipped 0.5 points to close at 16,572. The blue-chip index earlier rose to set its first record high of 2014. The S&P 500 dipped 2.1 points to finish at 1,888 and the Nasdaq fell 38.7 points to end at 4,237. Investors stay on the fence ahead of jobs report, which is expected to add 197,000 new jobs last month as compared to 175,000 jobs in February. Market was also weighed by higher than anticipated weekly jobless claims, which rose to 326,000 against the expectation of 317,000.
For the JCI, lack of fresh news from both domestic and external would make the index to stay at sideways movement with a narrow range ahead of domestic election next week. We foresee potential catalyst from commodities prices that would affect the JCI. The upward movement in metal prices, in particular nickel and tin that rose 0.7% and 1.0% respectively, would trigger further buying activities in these sectors. Meanwhile, pressure in CPO prices and coal, would maintain pressure in coal and cpo stocks that would affect the JCI as these sector contributed 4.65% to total index. However, selective buying in domestic oriented sectors as strong trade balance and CPI lessen the threat in interest rate would help the index to stay in a narrow range today.
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• Media reported that LPKR is planning to issue US$150mn of bonds that will be use to support the company’s expansion, including malls, residential projects and hospital expansion. Previously, LPKR shared its plan to build 24 new hospitals and 19 new malls over the next few years.
• With net cash position of Rp826.0bn and strong equity position of Rp14.2tn, the plan would meet fewer obstacles. This also backed by Moody’s rating for LPKR at Ba3.
• LPKR is trading at 2014F consensus PER of 16.6x and EV/EBITDA of 10.8x.
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• BRMS posted a loss from divestment of US$58mn after it sell stake in Konblo Bumi and Rubis International. Rubis International is a iron ore mining company in North Africa, Konblo Bumi is a gold and diamond mine company in Liberia, West Africa. BRMS sell most of its stake in both company and left 5% ownership in both Konblo Bumi and Rubis International.
• The divestment is taken as the company plans to focus its exploration in Indonesia. The loss is stated in the company’s 2013 financial report.
• The step may be related to BRMS’ parent company, BUMI, step in divesting 42% stake in BRMS to CIC as part of BUMI’s debt repayment to CIC. This transaction is expected to be concluded this month.
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• Through its subsidiary, Sumberdaya Sewatama, ABMM is planning to develop power plant project with capacity of 400MW in the next 5 years. The investment for this plant is around US$600-700mn thus the company will use 30% of its internal cash and 70% external funding. This year, ABMM will prepare an infrastructure project to support its megaproject and capex of US$130-150mn.
• Furthermore, ABMM is eyeing on 5-10 steam power plant project and other new energy potential. The need for electricity in Indonesia is getting higher and higher hence the company predicts can provide the country and its regions with power plant as an independent power producer.
• ABMM is trading at 2014F consensus PER of 13.5x and EV/EBITDA of 5.3x
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• Next year, ADHI is planning to spin off its monorail business to be a subsidiary with the purpose of speed up the Bekasi-Cawang-Cibubur monorail in April 2015. The company is expecting that this monorail will be done by 2018 with distance of 39km. The monorail ticket is approximately around Rp15.000/ person and if target customers are achieved then the potential net profit every year will be Rp113bn. The total investment for this project is predicted to reach Rp8.2tn.
• ADHI is trading at 2014F consensus PER of 13.7x and EV/EBITDA of 4.7x
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RESEARCH
Bagus Hananto [email protected] (62-21) 3190-1777 ext. 219
Maisyarah Johan [email protected] (62-21) 3190-1777
EQUITY SALES
Dick Hermanto [email protected] (62-21) 3162-063
Agi Susanti [email protected] (62-21) 3162-075
Siti Qobtiah [email protected] (62-21) 3162-065
Pandu Endra [email protected] (62-21) 3190-1777
Supardi [email protected] (62-21) 3162-025
