U.S. stocks ended sharply lower ahead of 1Q earnings season and selling pressure in social media stocks. The selloff in mentioned sector dragged down tech index, Nasdaq, to close at 4,123 or decreased 2.6%. This also occurred in S&P 500 that plunge by 23.7 points or 1.3% to 1,865 after posting fresh high at 1,890 last week. Meanwhile, Dow Jones Industrial Average decreased 159.8 points or less than 1.0% to finish at 16,412. Investors shrugged off U.S. jobs data, which showed a relatively in line new jobs of 192,000 in March with total unemployment rate unchanged at 6.7%. Market expect total new jobs of 200,000 last month with unemployment rate figure at 6.6%.
Such weak external catalyst would deliver negative sentiment to the JCI and accelerate the index downward movement today. This would be added by potential pressure in Rupiah exchange rate as the country international reserves decreased by US$2.7bn to US$102.7bn in February amid higher forex demand for SOEs debt repayment. This would trigger more selling pressure in large caps stocks. Investors would also wait for 1Q earnings publication that will be released this month. At the same time, Bank Indonesia shared that it may maintain the benchmark rate at 7.5%, this would trigger more selling activity as market will start to wonder about the central bank’s consideration in maintaining interest rate despite improving macroeconomic condition, including CPI and trade balance.
• BI’s deputy governor said that the central bank plans to maintain its interest rate at 7.5% as it still wait for more improvement in domestic economic data and anticipate U.S. plans in increasing their interest rate next year. BI also said that it still hold their policy up until the country current account deficit / GDP improves to below 3.0%.
• However, in the other side of the pond, BI said that the country economic condition has showed a significant improvement. The central bank said that the improving condition has attracted strong capital inflow to domestic market and propelled domestic liquidity, hence, pushed up the Rupiah exchange rate.
• With relatively weak commodities prices and indication of many commodities producers that planning to halt production growth, it is likely that export value would relatively weak this year. Thus, trade balance is rely on import that has been decreased and helps the country to post a surplus in trade balance of US$341.4mn YTD as compared to deficit of US$372.4mn in the first two month of 2012.
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• LPCK will develop a 300ha of CBD area in Cikarang, the project is part of the company’s plan in its 3,000 ha of landbank that will tap increasing demand for residential and commercial products in Cikarang area. The company plans to develop this project gradually with 20 years of completion target.
• For the first phase, LPCK will spend Rp1.5tn of investment cost to build integrated residential and commercial area, including malls, landed residential, apartments and hotels. This area is developed with international standard that bode well with recent robust foreign manufacturers’ expansion in Jakarta – Cikampek area.
• LPCK is trading at 2014F consensus PER of 7.0x and EV/EBITDA of 5.3x.
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• BBCA has given ROTI Rp150bn loan with 6 years maturity and 9.7% interest rate. This syndication is going to be used for factory development project or Rp100bn refinancing and the rest is shifted from local credit to credit investment III. Last year, ROTI has already paid off the entire loan to BBCA early from the maturity date.
• ROTI is trading at 2014F consensus PER of 27.1x and EV/EBITDA of 16.6x
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• CNKO posted income around Rp1.6tn in 2013 which is lower than the previous year. However, the comprehensive income is increased 40% YoY to Rp103.6bn. Moreover, the company net income is Rp85.3bn and profit price per share is Rp9.53 thus the total disbursed to shareholders is Rp68.2bn.
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• SRTG is pushing Interra Resources to acquire Mitra Investindo by buying all the new shares through right issue. All this time, Interra has been developing its business in Myanmar and Indonesia. The company has 100% participation right in Blok Tanjung Miring Timur TAC, South Sumatera and Blok Linda Sele TAC, West Papua. In addition, Interra has also have 49% participation right in Blok Kuala Pambuang PSC, central Kalimantan and 60% shares in Blok Chauk and Yenangyaung IPRCs, Myanmar.
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