Pikko controls 68.01% stake in Royal Oak

Pikko Land Corporation, a British Virgin Island-based company, has purchased 119.47 million shares of PT Royal Oak Development Asia Tbk (ASIA) during a tender offer.

Director Hendro Setiawan at Pikko Land said the shares purchase was held at Rp225 per share or Rp26.88 billion from 135 public shareholders. 

Pikko Land has settled the purchase on November 23 2011. Post the tender offer, Pikko Land is now controlling 68.01% stake or 9.16 billion shares in Royak Oak. 

Disclosure: No position at the stock mentioned above.

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UNTR to spend US$500 mio capex

PT United Tractors Tbk (UNTR) aims to spend US$500 million capital expenditure next year as a routine investment.

Corporate Secretary Sara K. Loebis said the company will use the internally generated cash flow to finance the capex in 2012.  The figure is out of the requirement for coal acquisition.

According to her, United Tractors is scouting two coal miners in Central Kalimantan and East Kalimantan. The due diligence has been initiated within the next 4 months.

"We have coal reserves of 300 million tons-350 million tons. Hence, we need another 150 million tons-200 million tons to reach 500 million tons," she said.

Disclosure: No position at the stock mentioned above.

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Pakuwon Jati sets rights issue at Rp650

Property developer PT Pakuwon Jati Tbk (PWON) finally issued 2.01 billion shares from its portfolio or 20% of its capital at the exercised price of Rp650, entitling the developer with Rp1.30 trillion proceed.

In the final prospectus published today, each holder of five existing shares will entitle one pre-emptive right to buy one new share from the portfolio.

Burgami Investments Ltd, BSL Investments, PT Pakuwon Arthaniaga, Raylight Investments Limited, and Concord Media Investments Ltd, the shareholders of Pakuwon Jati, have committed to be standby buyers for the rights issue.

Pakuwon Jati will use Rp1.30 trillion of the proceed to acquire 457.49 million shares or 99.99% in PT Elite Prima Hutama, a property company that is focusing on development and management of apartment and shopping center.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

Fitch Ratings kept its pristine AAA rating on the U.S. on Monday, but the credit-ratings company downgraded its outlook to “negative” in the wake of the Supercommittee’s failure to find $1.2 trillion in spending cuts.

The development, which had been hinted at last week, could have been worse for the U.S. as McGraw-Hill and  Standard & Poor’s slashed its credit rating for the first time ever in August.

However, the negative outlook indicates a “slightly greater” than 50% chance that Fitch downgrades the U.S. over the next two years.

“Failure to reach agreement in 2013 on a credible deficit reduction plan and a worsening of the economic and fiscal outlook would likely result in a downgrade of the U.S. sovereign rating,” David Riley, a managing director at Fitch, said in the report as quoted by foxbusiness.com

Fitch warned that its revised fiscal projections call for federal debt held by the public to exceed 90% of gross domestic product and debt interest payments making up more than 20% of total tax revenues by the end of the decade.

The Dow Jones Industrial Average soared 291 points, or 2.6%, to 11,523, the S&P 500 jumped 33.9 points, or 2.9%, to 1,193 and the Nasdaq Composite rallied 85.8 points, or 3.5%, to 2,527.

After falling close to 1000 points, or 8%, over the past two weeks, the blue chips have rallied on the day. The Nasdaq had an even better performance, its best on a percentage basis since August. How about Indonesia stock market today? Here are stock recommendations as provided by Bisnis Indonesia today:

e-Trading Securities:

Jakarta Composite Index (JCI) is estimated to move within the range of 3,580-3,679. From the indicator movement, the index is in oversold area and stochastic indicator as well. RSI moves to downtrend and enters oversold area. 

Minna Padi Investama:

The index today may rise within the range of 3,623-3,718. Several stocks to watch: KLBF, BBCA, and BMRI.

Sinarmas Sekuritas:

The index today technically tends to be mixed within the range of 3,610-3,680. The meeting of finance ministers in Euro Zone is expected to complete the policy of European Stability Fund. Several stocks to watch: BBNI, MAPI, SMCB, and CMNP.
 

Disclosure: No position at the stock mentioned above.

 

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Moody's withdraws Giti Tire's rating

Moody's Investors Service has withdrawn Giti Tire's B3 corporate family rating. The rating agency has withdrawn Giti Tire's rating for its own business reasons. 

Moody's currently does not rate any debt issued by Giti Tire. The rating withdrawal does not reflect a change in Giti Tire's creditworthiness.

Disclosure: No position at the stock mentioned above.

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Bukit Asam scouts Rp3 trillion profit

The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above last year's figure. Bukit Asam booked Rp2 trillion net profit last year.

According to the company's Corporate Secretary Achmad Sudarto, Bukit Asam is scouting a minimum 10% growth in net profit next year, giving the company an opportunity to reach Rp3.3 trillion.

"We target a minimum 10% increase in revenue next year," he said as quoted by Kontan daily. In 2011, Bukit Asam expects to book Rp11 trillion revenue.

To meet the target, Bukit Asam will jack up coal output and sales at least 10%-20%. In 2011, Bukit Asam has set target of 15 million tons-16 million tons coal output with 16 million tons-17 million tons sales.

Disclosure: No position at the stock mentioned above.

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Bayan 9M net profit surges 173.38%

Coal miner PT Bayan Resources Tbk (BYAN), that is controlled by Dato's Low Tuck Kwong, reported a 173.38% jump in net profit by end of September this year on the back of strong coal revenue.

Bayan, that is in talks with White Energy regarding to the coal supply to PT Kaltim Supacoal, posted Rp1.34 trillion net profit in 9M 2011 from Rp488.64 billion in 9M 2010.  

In September's financial statement filed to Indonesia Stock Exchange late last week, Bayan booked a 146.78% increase in operating profit to Rp2.13 trillion from Rp862.19 billion. Gross profit surged 103.62% to Rp2.81 trillion from Rp1.38 trillion. The company's revenue rose 51.14% to Rp9.25 trillion from Rp6.12 trillion.

At the end of September 2011, Low Tuck Kwong controls 51.59% stake in Bayan Resources, Korea Electric Power Corporation owns 20%, Enel Investment Holding BV holds 10%, Engki Wibowo and Jenny Quantero hold 5.96% abd 2.98% respectively.

Disclosure: No position at the stock mentioned above.

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Bayan & White Energy dispute in KSC

Australian clean coal developer White Energy has declined to buy out its Indonesian partner to save its flagship project, sending the Australian company's shares down 13%on Monday to a near 6-year low.
White Energy, as quoted by Reuters, said it has told its partner, PT Bayan Resources Tbk, a company that is owned by tycoon Dato' Low Tuck Kwong, it is in breach of their joint venture, including its role as coal supplier, and given it 7 days to resolve the breach.
White Energy holds 51% of PT Kaltim Supacoal (KSC) with the remainder held by Bayan, which owns the Tabang coal mine in East Kalimantan that supplies their 1 million-ton-a-year coal upgrading plant.
The two entered talks last week on how to rescue the project after Bayan said it no longer wanted to supply coal to the upgrading plant because it could get a better price selling directly into the export market.
Bayan offered to sell its stake in the project for around US$45 million as a condition for continuing coal supply, but White Energy turned the offer down, saying it did not make sense to pay that much.
Instead, White said it would pursue its legal and other commercial options.
"White Energy's Board and management team are clearly disappointed with the timing of Bayan's recent actions," Chief Executive Brian Flannery said in a statement.
He said the company remains confident that there is strong demand from large coal companies in Indonesia and elsewhere to partner with White Energy to commercialize its clean coal technology.
White Energy's shares sank to a low of A$0.515, their weakest since January 2006, and last traded down 11 percent at A$0.53.

 
Disclosure: No position at the stock mentioned above.
 
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Stock recommendations today

Despite a sleepy performance on Friday, Wall Street was pounded by European debt fears in the worst week since September.

The Dow Jones Industrial Average, as quoted by foxbusiness.com, slid 25.6 points, or 0.23%, to 11,232 on last Friday, the S&P 500 skidded 3.1 points, or 0.27%, to 1,159 and the Nasdaq Composite fell 18.5 points, or 0.75%, to 2,442.

The Dow, S&P and Nasdaq all finished the shortened trading week by more than 4.7% to the downside, and have now been down for two weeks in a row. Indeed, the Dow has plunged close to 1,000 points in that time, while the Nasdaq has shed more than 10%. All three have now fallen deep into the red for the year after a short-lived Fall rally.

The markets have been captivated by worries over Europe's sovereign debt crisis. Financial stocks have taken a particularly strong beating over the past week as worries have stirred over the global financial systems' exposure to the debt crisis. How about Indonesia stock market today? Bisnis Indonesia provides stock recommendations today: 

Sinarmas Sekuritas:

Technically, Jakarta Composite Index tends to weaken within the range of 3,586-3,680. The result of debt sale and the policy of the European countries are still expected to provide sentiments to the index. Several stocks to watch for day trading: BDMN, ISAT, HEXA, and MNCN.

e-Trading Securities:

The index today may move within the range of 3,580-3,684. The JCI weakened 58.84 points or 1.59% to 3.637.19 on last Friday.

Disclosure: No position at the stock mentioned above.

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Benakat keeps disposing Elnusa

After disposing 2.45% stake or 178.57 million shares in PT Elnusa Tbk (ELSA), an oil and gas services company, PT Benakat Petroleum Energy Tbk (BIPI) announced another 35.71 million shares sale or 0.49% stake in Elnusa.

In an official disclosure filed to Indonesia Stock Exchange yesterday, Benakat said the company has sold 35.71 million shares in Elnusa at Rp210 a share, entitling Benakat with Rp7.49 billion proceed. Benakat sold the stake on November for loan pledge purpose Following the sale, Benakat's stake in Elnusa reduced to 34.22% from 34.706%.

Previously, Benakat also divested 2.45% stake or 178.57 million shares in Elnusa, giving Benakat with a proceed of Rp37.49 billion.
Director Elia Massa at Elnusa, in a disclosure information submitted to Indonesia Stock Exchange, said Benakat sold Elnusa shares at Rp210 a share on October 27 2011.
She said the shares disposal was aimed as collateral of loan facilities. Post the disposal, Benakat's ownership in Elnusa shrank to 34.706% from 37.156%.
As of September 2011, Benakat recorded a Rp4 billion net profit from a net loss of Rp94.05 billion in the same periode of 2010. Revenue rose 41.9% to Rp253.13 billion    

 
Disclosure: No position at the stock mentioned above.
 
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Tunas Baru to expand into sugar

PT Tunas Baru Lampung Tbk (TBLA) is exploring an opportunity to expand into sugar business in 2014-2015.

For the initial path, Tunas Baru will construct sugar refinery facility with the capacity of 600 tons per hour by end of this year. In 2014-2015, the company expects to establish integrated sugar business.

Tunas Baru plans to set up the facility at Way Lunik, Lampung. It is aimed to refine imported raw sugar.

According to Hary, Tunas Baru's Corporate Secretary as quoted by Kontan today, the demand is 4 million tons of sugar a year, while the local supplier can provide 2 million tons. 

Tunas Baru expects to derive Rp1.31 trillion-Rp1.53 trillion sales from the sugar business. The estimation is based on the sugar price of Rp6,000-Rp7,000 per kg. The company requires Rp500 billion investment to construct the sugar refinery facility.

Disclosure: No position at the stock mentioned above.

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PBRX scouts US$325 mio revenue

Textile manufacturer PT Pan Brothers Tbk (PBRX) is scouting a US$325 million revenue next year, signaling a 30% growth from its target of US$250 million this year. Net profit is targeted to reach 4.9% of the revenue.

Anne P. Sutanto, Pan Brothers's Vice President Director, said to meet the target, as quoted by Kontan today, the company will be fully backed up by several actions such as adding production facilities, which are now about 13,250 units. Pan Brothers expects to have 25,000 units in 2015. 

Pan Brothers also intends to construct two production facilities at Boyolalu, Central Java, with size of 7,000 square meter and 5,000 square meter.

With those additional machines, Pan Brothers' capacity will augment 15% in 2012 from the current capacity. The company will use proceed from the rights issue to finance those expansion.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

Wall Street was haunted by the specter of Europe's debt crisis poisoning major global economies, shoving the broad S&P into the red for the sixth-straight session.

The Dow Jones Industrial Average, as quoted by foxbusiness.com, fell 236 points, or 2.1%, to 11,258, the S&P 500 dipped 26.3 points, or 2.2%, to 1,162 and the Nasdaq Composite slid 61.2 points, or 2.4%, to 2,460. 

Wall Street has been fixated on the euro zone debt crisis, which is increasingly becoming a global debacle. Indeed, the broad S&P 500 fell for its sixth-straight day on Wednesday in a sign that investors are growing wary of the rapid contagion. 

On the day, financial, energy and materials shares sustained the heaviest selling as a result of the European jitters. 

Volatility climbed 4.5% and yields on U.S. government debt fell as traders fled equity markets. The yield on the benchmark 10-year U.S. Treasury note fell to 1.878% from 1.92%. 

Meanwhile, the price to insure BofA's debt hit the highest level since October, while the cost of insuring other banks' debt rose as well. How about Indonesia stock market today? Here are recommendations provided by Bisnis Indonesia today:

Oso Securities:

Jakarta Composite Index (JCI) may move to the support level of 3,660 and resistance of 3,735. Several stocks to watch: ASII, BBRI, and ASRI. 

e-Trading Securities:

The JCI is estimated to move within the range of 3,665-3,735. Several stocks to watch: ROTI, AUTO, and INTP.

Panin Sekuritas:

The JCI is estimated to move mixed with limited decrease. The support and resistance level is between 3,630-3,720. Yesterday, the index inched up after investors were in selective buying.

Disclosure: No position at the stock mentioned above.

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Bank Ekonomi 9M profit rises 26%

PT Bank Ekonomi Raharja Tbk (BAEK) today reported profit before tax for the 9 months of 2011 of Rp262.7 billion, a 26% decrease from Rp353.3 billion in 9M 2010.

In an official statement filed to Indonesia Stock Exchange today, the increase was due to a rise in employee expenses of Rp74.7 billion on the back of higher headcount and increased staff benefits to align with the market as well as a reduction of Rp34.6 billion in gains on the sale of investment securities. 

operating income was Rp786.8 billion, a 1% increase from the same period last year. Net Interest income increased 5% to Rp664.7 billion from a year earlier. 

Disclosure: No position at the stock mentioned above.

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Chandra Asri seals US$150 mio loan

Indonesia's largest integrated petrochemical products maker PT Chandra Asri Petrochemical Tbk has secured US$150 million syndicated loan facilities from five commercial banks.
DBS Bank Ltd, PT Bank Danamon Indonesia Tbk, PT Bank DBS Indonesia, Standard Chartered bank, and The Hongkong and Shanghai Banking Corporation Limited have commited to provide the facilities to Chandra Asri, that is owned by Indonesian mogul Prajogo Pangestu.
Corporate Secretary & Investor Relations Director Suryandi said those facilities will be used as capital expenditure. "We have entered into loan agreement on November 21 with 7 years maturity and 1.5 years grace period," he said today.
Regarding to the facilities, Chandra Asri has pledged its asets and obtained approval from its shareholders on October 24.
According to him, the facilities will be used to finance several projects such as the completion of butadiene and butene-1 projects.

Disclosure: No position at the stock mentioned above.

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Japfa to sell Rp1.5 trillion bonds

PT Japfa Comfeed Indonesia Tbk plans to issue Rp1.5 trillion bonds into two stages in 2012. According to sources, as quoted by Bisnis Indonesia today, Japfa will use shelf registration for the bonds issuance.

"About Rp1 trillion bonds will be offered by Japfa Comfeed at the end of this year," said a source. 

Japfa has also mandated PT Bahana Securities Tbk as the underwriter. Director Andi Sidharta said Japfa has filed the bonds issuance to Bapepam-LK.

Disclosure: No position at the stock mentioned above.

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Cardig Services set IPO at Rp400

PT Cardig Aero Services Tbk has set the IPO price at Rp400 per share, in the middle of the range between Rp350-Rp590  per share.

Referring to the price, Cardig Services will grab Rp125.21 billion from the sale of 313.03 million shares or 15% of its outstanding shares.

 
Disclosure: No position at the stock mentioned above.
 
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XL scouts Rp17 trio from towers sale

Indonesia's third largest cellular operator PT XL Axiata Tbk (EXCL) is scouting Rp14 trillion from the sale of 7,000 telecommunication towers. The operator has mandated Goldman Sachs as the sale arranger.

XL Axiata President Director Hasnul Suhaemi said the company is in preliminary talks with three potential buyers. They have tower businesses.

"We plan to sell our towers to only one buyer, reducing a complicated terms and conditions during the process," he said as quoted by Bisnis Indonesia today.

However, he didn't specify the deadline for the sale. If we could not reach agreement with one buyer, we would delay and offer the towers to another potential buyer. By selling the towers, according to him, XL will focus into its business.

XL Axiata manages 9,000-10,000 towers. If the operator still needs additional towers, it will lease them from the tower operator.

The company plans to spend Rp6 trillion capital expenditure next year. About 60% of the total capex will be used to develop 3G network with subscribers target of 49.5 million, a 10% increase from targeted 45 million subscribers this year.

Disclosure: No position at the stock mentioned above.

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Alam Sutera to grab Rp712 billion

Property developer PT Alam Sutera Realty Tbk (ASRI), that is controlled by Argo Manunggal Group, may secure a proceed of Rp712.73 billion from rights issue.

Alam Sutera has made the non-preemptive rights issue at Rp399 per share with the issuance of 1.78 billion new shares. 

According to the company's announcement, it will seek an approval from shareholders via extraordinary meeting scheduled on November 25 2011.

As of September 2011, Alam Sutera is owned by PT Tangerang Fajar Industrial Estate with 16.7%, PT Manunggal prime Development of 14.1%, PT Selaras Citamanunggal of 11.9%, and PT Bukit Asri Padang Golf of 5.9%. 

Disclosure: No position at the stock mentioned above.  

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Stock recommendations today

Stocks tumbled as surprisingly poor demand at a German government-bond auction raised concerns about peripheral European issues spreading to the stronger core countries.

The Dow Jones Industrial Average, as quoted by Bisnis Indonesia, fell 236.17 points, or 2.1%, to 11,257.55, finishing at the day's lows. The Dow's decline extends its losing streak to three straight days, shaving 4.6% off the blue-chip index and sending it to a 6-week low. With Wednesday's drop, the Dow has given up more than half its historic rally in October.

The Standard & Poor's 500-stock index declined 26.25 points, or 2.2%, to 1,161.79, and the Nasdaq Composite shed 61.20 points, or 2.4%, to 2,460.08. How about Indonesia stock market today? Bisnis Indonesia provides recommendations today:

e-Trading Securities:

Jakarta Composite Index (JCI) today is estimated to move within the range of 3,622-3,736 with several stocks to watch: BKSL and BDMN. The index fell 1.30% to 3,678 yesterday.

Panin Sekuritas:

The index today may be in pressure because of external factors. Investor will consider macroeconomic indicators of the US before they take action. Despite the weak position of blue chips, there are still opportunity to put trading on second and third liner stocks.

Minna Padi Investama:

The JCI today may move within the range of 3,638-3,729. Several stocks to watch: ADRO, HRUM, and UNVR. The index yesterday fell 48.52 points to 3,678.

Disclosure: No position at the stock mentioned above.

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Fajar Bumi Sakti takeover story, end?

Despite an official letter sent by Nathaniel Rothschild that highlighted investment in Recapital Asset Management and debt to PT Bukit Mutiara, it is better for Nat Rothschild to look back in 2008 and 2009, especially regarding with acquisition of coal mining company PT Fajar Bumi Sakti (FBS).
Bumi Resources, via a wholly owned subsidiary dubbed PT Bumi Resources Investment (BRI), entered into shares purchase agreement on December 26 2008 to buy an indirect stake in FBS at the initial consideration price of Rp2.48 trillion.
However, Bumi Resources on January 5 2009 finally agreed to revise down the takeover price on FBS by half to Rp1.4 trillion after the stock market regulation founded that the price was too expensive.
At the same time, Bumi also acquired 44% stake in PT Darma Henwa Tbk (DEWA) at Rp2.14 trillion and 84% stake in PT Pendopo Energi Batubara worth Rp1.3 trillion.

In total, Bumi Resources spent Rp5.12 trillion for those acquisitions. The company used some part of an expensive loan facility obtained from China Investment Corporation of US$1.9 billion.

But, do not forget to ask about the FBS coal mining performance. If you check Q1 2011 financial statement on page 177, it was mentioned that BRI should pay incentive to Ancara Properties Limited, the seller of the FBS, if the FBS could reach a coal production rate of 4 million tons by the end of the second year after the completion date.

The question is how much coal that has been produced by Fajar Bumi Sakti? How about coal production of Pendopo Energi and performance of Darma Henwa as they were acquired with an expensive financing from CIC.

If you check Bumi's September financial statement, the company posted assets write-off of US$17.24 million.

On note 18, page 92, it was mentioned that on December 28 2010, the FBS official closed the underground mining operations permanently due to the scarcity of timber supply, which was a major support in the underground mining operations. 

A detailed studies that lasted up to December 2010, the FBS was not able to restore the operations.
In relation to the closure, as of December 31 2010, the FBS wrote-off certain deffered exploration and developmet costs with carrying value of US$2.19 million and the recognized accrual for employee termination amounting to US$3.43 million. 

Bumi also reported a write-off the costs related to Satui underground mining project amounting US$14.25 million. So, where is the coal production of the FBS? is it the end of story of the Rp1.4 trillion FBS take over?   

Disclosure: No position at the stock mentioned above.

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Bumi 9M attributable profit up 17.04%

Indonesia's largest coal exporter PT Bumi Resources Tbk (BUMI) reported a 17.04% increase in attributable profit by end of September this year, as a result of coal production and sales volume.

In the financial statement filed to Indonesia Stock Exchange (IDX) last night, Bumi posted US$228.83 million attributable profit in 9M 2011 from US$195.52 million in 9M 2010. Net profit slightly increased 3.90% to US$241.89 million from US$232.81 million.
Bumi Resources, a subsidiary of London-based company Bumi Plc, booked a 49.67% increase in operating profit to US$839.82 million from US$561.12 million. Gross profit rose 45.43% to US$1.16 billion from US$796.23 million.
The company booked US$2.86 billion revenue, a 34.27% increase from US$2.13 billion.
Operating performanceBumi reported a 47 million tons in coal production in 9M 2011, a 10% increase from 43.8 million tons. Coal sales volume reached 45.6 million tons, a 2% increase from 44.7 million tons.
Average selling price rose 33.1% to US$92.2 per ton from US$69.3 per ton. In 2011, Bumi is targeting 66 million tons of coal production with price of US$83 per ton.
The company expects an exeed production of 100 million tons at KPC and Arutmin in 2012 and 2013. The expansion project is on the track for commissioning. The second overland conveyor (capacity of 32 metric tons per annum) is expected to be commissioned in 1Q 2012.
 

Disclosure: No position at the stock mentioned above.

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Astra Agro 10M CPO sales up 13.7%

Palm oil producer PT Astra Agro Lestari Tbk (AALI) reported a 13.7% increase in CPO sales volume during the first ten months of 2011 (10M 2011).

In a company bulletin published today, Astra Agro posted 1.01 million tons of CPO sales from 889.996 tons in 10M 2010. 

This growth was primarily driven by the increasing of Astra Agro's CPO production during January – October 2011. 

Moreover, the average price of AALI’s CPO until October 2011 increased by 13.6% from Rp6,765/kg (net) in the same period last year to Rp7,688 /kg, while the average selling price of kernel and PKO increased by 23.4% and 43.6%, respectively. 

Disclosure: No position at the stock mentioned above.

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Bumi Citra buys Gunung Besi Utama

PT Bumi Citra Permai Tbk (BCIP) has agreed to acquire US$260 million mandatory convertible notes (MCN) issued by an iron ore producer PT Gunung Besi Utama.

Bumi Citra has entered into memorandum of understanding with Nabil Enterprises Limited, a company based on United Arab Emirates, regarding to the purchase of MCN. Gunung Besi is a company that directly and undirectly owns a producer of iron ore. To buy the MCN, Bumi Citra will use proceed from the rights issue scheduled on December 21 2011. 

Disclosure: No position at the stock mentioned above.

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Visi Media rises 33% on trading debut

Holding company of TVOne, ANTV, and Vivanews.com, PT Visi Media Asia Tbk, has intiated its debut in the stock market today. The shares rose 33.33% to Rp400 from Rp300 a share, a minute after Visi Media listed its shares this morning.

During the debut, the shares reached Rp450 and Rp390, the highest and the lowest levels. Visi Media, the 20th publicly listed companies at Indonesia Stock Exchange, offloaded 1.67 billion shares, entitling the company with a Rp500 billion proceed. Visi Media will use the proceed to pay debt and develop its business.

Disclosure: No position at the stock mentioned above.

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ABM Investama sets IPO at Rp3,750

Integrated energy company PT ABM Investama Tbk has determined the IPO price at Rp3,750 per share from the range of Ro3,250-Rp4,650 per share. Referring to the price, ABM Investama will bag Rp2.6 trillion proceed. 

A source, as quoted by Bisnis Indonesia today, said the company will sell 20% stake during the IPO. PT Macquarie Securities and PT Mandiri Sekuritas are acting as the lead underwriter, while Morgan Stanley is a global coordinator for the IPO.

 

Disclosure: No position at the stock mentioned above.

 
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Astra Agro seeks US$100 mio loan

Palm oil producer PT Astra Agro Lestari Tbk (AALI) is seeking a US$100 million loan facility to replace existing loan that will mature next year.

Director Santosa said the company has a US$50 million loan facility from a consortium of five banks led by Bank of Tokyo Mitsubishi UFJ. The consortium provided the facility to Astra Agro in 2009. However, the facility will end in June 2012, making the company to find another US$100 million facility.

"We have a 3 year maturity and will mature in 2012. Now, we have started in talks with several banks," he said as quoted by Bisnis Indonesia today.

The company will spend Rp1.7 trillion for capital expenditure. Astra Agro will use the capex for the construction of new production facilities, land acquisition, and replanting.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

Last week, Jakarta Composite Index (JCI) fell 1% to 3,754.50. In Asia, shares dropped sharply Friday, pulled down by fresh concerns about Europe's ongoing debt woes following a weak Spanish bond auction.

Hong Kong's Hang Seng Index, as quoted by WSJ.com, closed 1.7% lower at 18,491.23, while China's Shanghai Composite Index fell 1.9% to 2416.56.

Japan's Nikkei Stock Average lost 1.2% to 8374.91, South Korea's Kospi fell 2% to 1839.17, and Australia's S&P/ASX 200 index shed 1.9% to 4177. The losses followed an auction Thursday that saw average yields on 10-year Spanish government bonds hit a euro-era high ahead of a weekend election there, sending European and U.S. stocks sharply lower.How about Indonesia stock market today?

e-Trading Securities:

The JCI is estimated to move within the range of 3,686-3,784 with several stocks to watch: INDY, MYOR, and INKP.

Sinarmas Sekuritas:

Today, the JCI technically tends to decrease within the range of 3,710-3,830. The development of European nations' debt crisis and the intervention of European Central Bank could provide sentiment to the JCI movement. Several stocks to watch: MYOR, HRUM, BWPT, and AKRA.

Disclosure: No position at the stock mentioned above.

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Delta Dunia 10M overburden up 18.66%

Indonesia's second largest coal mining contractor PT Delta Dunia Makmur Tbk (DOID) reported a 18.66% increase in overburden removal by end of October this year.

Delta Dunia posted 250.5 million bank cubic meter (bcm) in 10M 2011 from 211.1 million bcm in 10M 2010. Coal production recorded a 1.05% increase to 29 million tons from 28.7 million tons.

Delta Dunia, that is owned by a collaboration of Northstar Pacific Partner, Texas Pacific Group, and China Investment Corporation (CIC), suffered a Rp12.14 billion net loss in 9M 2011 from a Rp351.93 billion net profit in 9M 2010.

The loss was mainly contributed by loss on term liabilities redemption and derivative financial instrument expenses of Rp156.45 billion and Rp204.59 billion.

Operating profit fell 48.86% to Rp482.84 billion from Rp755.96 billion, dragging down its margin of 36.13% to 9.69% from 18.03% on the back of higher expenses. Cost of goods sold increased 29.32% and operating expenses rose 48.86%. Delta Dunia's net revenue increased 18.85% to Rp4.98 trillion from Rp4.19 trillion.

Disclosure: No position at the stock mentioned above.  

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Bumi Minerals 9M profit drops 38.88%

PT Bumi Resources Minerals Tbk (BRMS), a non-coal miner that is owned by PT Bumi Resources Tbk (BUMI), suffered a 38.88% drop in net profit by end of September this year. The drop was mainly contributed by a profit decrease of the gold miner PT Newmont Nusa Tenggara (NNT).

Bumi Minerals posted Rp600.11 billion net profit in 9M 2011 from Rp981.92 billion in 9M 2010. Equity in net income of associated company contributed Rp921.07 billion from Rp1.72 trillion. Bumi Minerals also posted a Rp78.32 billion on unrealized loss on fair value changes.

Bumi Minerals President Director Ken Farrell, in a press statement, said the profit drop of NNT was in line a production decrease both in copper and gold above 40%."The decrease is temporary and we have anticipated it. We expect NNT could steeply jack up production early 2013," he said. 

Operating profit slightly decreased 6.39% to Rp52.71 billion from Rp56.31 billion. Revenue increased 20.47% to Rp127.61 billion from Rp105.93 billion.

Disclosure: No position at the stock mentioned above.

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Berau rating unaffected by Q3 result

Standard & Poor's Ratings Services said today that its corporate credit rating on Indonesia-based PT Berau Coal Energy Tbk (BB-/stable/--) is unaffected by the company's third-quarter results. 

The company's ratio of debt to EBITDA of 1.5x for the 12 months ended September 30, 2011, was in the 1.5x-2.0x range S&P had expected. 

"In our base-case scenario for Berau, we anticipate that the ratio will remain in a 1.5x-2.5x range for 2012 and sales volumes will be 20 million-21 million tons," said S&P in a press statement today.
Berau's US$146 million capital spending plan for 2012 is slightly higher than the US$130 million S&P had anticipated. 

"Nevertheless, we still expect the company to have positive free operating cash flows in 2012 under the new plan."

Higher production and strong thermal coal prices resulted in Berau's revenues rising 58% to US$1,207.1 million and EBITDA surging 84% to US$418.5 million for the nine months ended Sept. 30, 2011, compared with the same period in 2010.

Disclosure: No position at the stock mentioned above.

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Bumi, Recapital & Bukit Mutiara loan

Indonesia's largest coal exporter PT Bumi Resources Tbk (BUMI) has reached agreement with PT Recapital Asset Management on the repayment of US$231 million investment in the first half of 2012.
Bumi Resources also agreed with PT Bukit Mutiara for early repayment of US$251 million loan with 50% in 2012 and 50% in 2013.
According to a public disclosure filed by Bumi Plc, London-based company yesterday, these items, which were fully disclosed in the Bumi plc listing prospectus of 17 June 2011, were discussed extensively at the Audit Committee and a schedule to secure re-payment of these PT Bumi loans and investments and to use the proceeds to pay down debt was presented by the Chief Financial Officer and approved by the plc Board at its meeting in Jakarta on 12 October.
It also is agreed that there will be progressive realisation and in all cases marking to fair value of the business development assets in Bumi Resources.
The investment in Recapial and loan to Bukit Mutiara have been highlighted by Nathaniel Rothschild, who owns 11.71% stake in Bumi Plc, on his official letter to Ari Saptari Hudaya, Bumi Plc CEO. 

Referring to Bumi Resources's June financial report, page 75, the company and Recapital Management,  On August 27, 2008, entered into a discretionary fund contract for a period of 6 months and subject to extension as agreed by both parties. 

Based on this contract, Bumi Resources will give full  authority to Recapital as investment manager to carry out the management of Bumi Resources funds up to an amount of US$350 million.
On February 28, 2011, the agreement was extended until August 27, 2012.  On September 2, 2009, Bumi and Recapital entered into a second discretionary  fund contract for a period of 6 months and  subject to extension as agreed by both parties. 

Based on this contract, Bumi will give full  authority to Recapital as investment manager to  carry out the management of Bumi’s funds up to an amount of US$50 million. On  February 28, 2011, the agreement was extended until August 27, 2012. All short-term investments are with third parties. 

Check page 93, On November 2, 2009, Bumi also entered into a loan agreement with Bukit Mutiara, wherein the Company agreed to grant a loan facility with the principal amount up to US$300 million to
Bukit Mutiara in connection with a share sale and subscription agreement, which Bukit Mutiara is negotiating in relation to the acquisition of an indirect 90.0% interest in PT Berau Coal. The loan is unsecured and shall be repaid in full upon its maturity in 2015. The interest rate  of the loan is 12% per annum and is payable
every quarter

Bukit Mutiara is 99.6% owned by PT Bentara Energi Asia Utama and Arnanto holds 0.4% stakes. PT Recapital Advisors owns 99% of Bentara Energi and Andy Widya Susatyo hold 1% stakes in Bentara.

Recapital Advisors is 99.11% controlled by PT Tripillar Gunaperkasa, while the remaining is owned by Rosan P. Roeslani, Recapital Advisors' President Director.
Tripillar Gunaperasa is controlled by Rosan Roeslani of 73%, Sandiaga S. Uno of 12%, and Elvin Ramli holds 15% stakes.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

Stocks fell Thursday, driven lower by a confluence of frayed nerves over Europe's sovereign debt, market technicals and fresh worries over Washington's debt negotiations.

The Dow Jones Industrial Average, as quoted by WSJ.com, shed 134.86 points, or 1.1%, to 11,770.73, the third loss in four days. All but two blue-chip components finished lower. The Standard & Poor's 500-stock index lost 20.76 points, or 1.7%, to 1,216.15. The technology-oriented Nasdaq Composite dove 51.62 points, or 2%, to 2587.99.

Heavy afternoon selling in S&P 500 futures contracts pushed the broad stock index through key technical levels after a morning of small gains and losses. 

A Spanish government-bond auction ended with a euro-era high average yield, just under 7%, and a Federal Reserve official warned Europe's debt crisis could bite into U.S. economic growth. The lack of progress from Washington's deficit-cutting "supercommittee" also kept traders on edge. How about Indonesia stock market today?

e-Trading Securities:

Jakarta Composite Index (JCI) is estimated to move within the range of 3,748-3,833 with several stocks to watch: AKRA, SMRA, and BBNI.

Minna Padi Investama:

Debt crisis in Europe has put the JCI into the negative area. External sentiments will influence the index movement. Investor is still in wait and see. Several stocks to watch: BBCA, ADRO, and HRUM.

Sinarmas Sekuritas:

The index technically tends to lower within the range of 3,750-3,850. Several stocks for daily trading: UNVR, TLKM, LSIP, and AKRA.

Disclosure: No position at the stock mentioned above.

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Berau Coal 9M profit soars 194.46%

PT Berau Coal Energy Tbk (BRAU), that is 84.7% owned by Bumi Plc, reported a 194.46% jump in net profit by end of September this year from the prior period on the back of strong growth in sales.

In September's financial statement filed to Indonesia Stock Exchange today, Berau Coal posted US$132.45 million net profit in 9M 2011 from US$44.98 million in 9M 2010. Operating profit rose 84.46% to US$413.99 million from US$224.43 million.

The company booked a 58.12% increase in sales to US$1.21 billion from US$763.39 million. Berau Coal produced 14.3 million tons in 9M 2011 and is expected to meet the 20 million tons target for 2011. In Q3 2011, Berau recorded 5.3 million tons of coal, an increase of 23% over Q3 2010. Berau Coal achieved an average selling price per ton in the third quarter of US$87 per ton.

Disclosure: No position at the stock mentioned above.

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KPC, Arutmin output reach 47.1mio tons

Coal operating units of PT Bumi Resources Tbk, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, reported 47.1 million tons of coal production in 9M 2011. 

KPC, the most precious asset of Bumi Resources, produced 29.8 million tons in 9M 2011, a 6% increase over the prior period. Production at the Bengalon mine has been behind schedule and a portion of the site has now been subcontracted to a new contractor. KPC produced 11.6 million tons of coal, an increase of 29% from the third of 2010. 

Arutmin Indonesia produced 17.3 million tons of coal, an increase of 17% over the prior period. In the third quarter, Arutmin produced 5.8 million tons, a 71% jump from the third quarter of 2010.

Berau Coal, that is controlled by Bumi Plc, produced 14.3 millio tons and is expected to meet the 20 million tons target for 2011. In Q3 2011, Berau recorded 5.3 million tons of coal, an increase of 23% over Q3 2010. 

The group's expansion programme on track with 2014 target of 140 million tons. Berau Coal's expansion plan to achieve 30 million tons annual production in 2014 is on schedule.
KPC's expansion plans to achieve its 2014 target of 70 million tons is on schedule. The Sangatta expansion is underway, with the second overland conveyor under construction, with expected completion in the first half of 2012. 
The construction of the Melawan crusher and conveyor is on track for completion in 2012. Work has commenced on upgrading the Bengalon facilities.

Disclosure: No position at the stock mentioned above.

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Bumi Plc 9M11 coal output up 12%

Bumi Plc, a London-based company, recorded a coal production of 62 million tons by end of September this year, a 12% higher than a year earlier.
The 9M2011 figure was on track to meet 2011 target of 86 million tons of coal. Third quarter group production of 23 million tons, up 35% over Q32010. Realised prices for Q3 of US$94 per ton, an increase of 32% over Q3 2010.  

Disclosure: No position at the stock mentioned above.

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Greenwood sets IPO at Rp275-Rp325

Property developer PT Greenwood Sejahtera Tbk has set the IPO price range of Rp275-Rp325 per share, entitling the company with a proceed of Rp918.5 billion-Rp1.09 trillion.

Greenwood plans to sell 3.34 billion new shares or 35% of its enlarged capital. Greenwood sets the book building period from November 16 to 25.

Greenwood President Director Harry Gunawan said the company will use 50% of the IPO proceed to acquire land bank of 3.2 hectares and develop the second and third stage of The City Center Batavia. About 20% and 30% of the proceed will be used to develop new projects and working capital.

Disclosure: No position at the stock mentioned above.  

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BCA to share Rp43.50 interim dividend

PT Bank Central Asia Tbk (BCA), that is controlled by Djarum's Hartono family, today announced a Rp43.50 a share interim dividend from net profit of January to September 2011.

The dividend has been approved by board of commissioner of the bank on November 15 2011. Cum dividend in the regular and negotiation markets is scheduled on December 6 and ex dividend in both markets has been set on December 7 2011.

 
Disclosure: No position at the stock mentioned above.

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Stock recommendations today

The Dow Jones Industrial Average fell 191 points, or 1.6%, to 11,906, the S&P 500 slid 20.9 points, or 1.7%, to 1,237 and the Nasdaq Composite slumped 46.6 points, or 1.7%, to 2,640. 

The Dow shed close to 200 points in the last two hours of trading, in what was yet another wild ride for Wall Street. Market participants pegged Wall Street's late-day plunge on a note from Fitch saying Europe's debt crisis could pose a risk to the American banking system.  

The ratings company, as quoted by foxbusiness.com, said U.S. banks have "manageable direct exposures to the stressed European markets, but further contagion poses a serious risk." How about Indonesia stock market today? Bisnis Indonesia provides stock recommendations as quoted from several brokerages:

Reliance Securities:

Jakarta Composite Index (JCI) is estimated to rise within the range of 3,775-3,842. Several interesting stocks such as ADRO, BDMN, INDY, and INDF.

e-Trading Securities:

The index may move within the range of 3,764-3,857 with potential correction. Several stocks to watch: INTP, SMCB, and INDY.

Sinarmas Sekuritas:

Today, the index technically may move in mixed position within the range of 3,780-3,860. Several stocks to watch: INTP, ISAT, TLKM, and GGRM.

Disclosure: No position at the stock mentioned above.

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Berlian Tanker posts US$140 mio profit

PT Berlian Laju Tanker Tbk (BLTA) today returned to a US$140.69 million net profit at the end of September of 2011 after suffering a net loss of US$36.21 million a year earlier.

However, Berlian Tanker's operating profit fell 24.53% to US$59.37 million in 9M 2011 from US$78.67 million in 9M 2010 on the back of higher cost.  Operating revenue also dropped 1.65% to US$486.42 million from US$494.59 million.

Disclosure: No position at the stock mentioned above.

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Erajaya Group and 40% IPO

PT Erajaya Swasembada, a distributor of cellular products, aims to sell 1.32 billion of new shares or 40% of its enlarged capital via initial public offering (IPO) scheduled on December 14 this year.

Referring to the IPO prospectus published today, Erajaya plans to provide 66 million shares or 5% of the IPO size for the program of management employee stock allocation (MESA), hopefully to encourage and improve sense of belonging to the company.

Erajaya has mandated PT Buana Capital, partly owned by Pieter Tanuri, stellar figure in the capital market, as the lead underwriter with full commitment. 

About 42% of the IPO proceed, which is expected to rise Rp3 trillion, will be used by Erajaya to settle promissory notes regarding to the takeover of TAM Group. Erajaya will use 16% of the proceed to develop distribution chain and retail business of Erajaya Group, and the remaining will be allocated for working capital.

TAM Group is a distributor for BlackBerry, Samsung, Sony Ericsson, and Verena in Indonesia. As of 2009, parent company of TAM, dubbed PT Nusa Gemilang Abadi, was indirectly owned by the same shareholder who owned Erajaya as well. 

Erajaya has secured controlling interest in TAM Group based on sale and purchase agreement signed on August 11 2011 with Dexter Financial Equities Ltd. Pursuant to the agreement, Erajaya has purchased convertible bonds of US$85 million issued by West Swan Overseas Ltd.

The takeover of TAM Group is in line with Erajaya strategy to develop distribution chain and products and brands' portfolio diversification. Nusa Gemilang and its subsidiary, TAM, recorded a Rp29 billion net profit in the first half of 2011

Who is Erajaya Group?

Erajaya is controlled PT Eralink International with 59.99% stake. Post the IPO, the company will be owned by public shareholders of 38%, 2% of MESA, and Ardy Hady Wijaya will own 0.001%.

Erajaya Group is one of the largest retailer and distributor for cellular communication services in Indonesia. Erajaya also provides branded products such as Acer, BlackBerry, Dell, Huawei, LG, Nokia, Samsung, and Sony Ericsson.

As of June 2011, Erajaya owns and manages 70 distribution points throughout Indonesia and 16,000 points of resellers. The company operates 236 outlets in 27 cities in Indonesia.

Erajaya Swasembada, which is led by President Director Budiarto Halim and President Commissioner Ardy Hady Wijaya, has controlled 16 subsidiaries such as PT Erafone Artha Retailindo, PT Data Citra Mandiri, West Swan Overseas, Nusa Gemilang Abadi, and PT Prakarsa Prima Sentosa.

In the first half of 2011, Erajaya Swasembada posted Rp2.04 trillion net sales, a 10.45% decrease from Rp2.27 trillion a year earlier. Operating profit increased 7.70% to Rp108.5 billion from Rp100.7 billion, and net profit fell 14.77% to Rp67.8 billion from Rp79.5 billion. The company made slim operating margin and net profit margin of 0.05% and 0.03%.

Dividend policy 

On October 20 2010, Erajaya distributed a cash dividend of Rp50 billion to its shareholders. The company has Rp490 billion retained earning.

Post the IPO, Erajaya plans to distribute dividend with the ratio of 40% of its net profit starting from 2012 after it allocates retained earning.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

U.S. stocks finished slightly higher Tuesday in choppy trading, as hopes for Italy's new government and improving domestic economic data lifted investor sentiment. The Dow Jones Industrial Average, as quoted by WSJ.com, rose 17.18 points, or 0.1%, to 12,096.16, its third gain in the last four trading days. The blue-chip index spent much of the morning in negative territory before turning positive in afternoon trading. How about Indonesia stock market today? Bisnis Indonesia provides recommendations from several brokerages:

Panin Sekuritas:

Jakarta Composite Index (JCI) today may move mixed within support and resistance range of 3,770-3,840. The index yesterday yesterday fell following negative sentiments from European stock markets.

e-Trading Securities:

The index may move within the range of 3,748-3,836 with correction possibility. Several stocks to watch: BWPT, JSMR, amd ANTM.

Disclosure: No position at the stock mentioned above.


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Demand for Indo sukuk reaches US$6.5 bio

Indonesia has received a 6.5 folds oversubscribe over its a US$1 billion global sukuk bonds from 250 investors, signaling a strong demand of US$6.5 billion.
Rahmat Waluyanto, Director General of Debt Management at Ministry of Finance said the government has determined a 4% yield of the global sukuk yesterday. "The issuance is part of the meeting with investors in Middle East held in October," he said. 
According to him, the proceed will be used by the government to fulfill the target of Rp201.5 trillion debt securities issuance and diversify the budget financing.

Disclosure: No position at the stock mentioned above.
 
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Tower Bersama, Indosat in talks for tower

PT Tower Bersama Infrastructure Tbk (TBIG) finally enters into non binding agreement with PT Indosat Tbk (ISAT) in a bid to buy telecommunication towers.
Indosat, in a disclosure announcement filed to Indonesia Stock Exchange today, said non binding agreement does not provide any assurance that the deal could be proceeded.
Indonesia's second largest cellular operator by subscribers, Indosat, is planning to sell 4,000 telecommunication towers with valuation of US$500 million.
Several potential buyers such as PT Tower Bersama Infrastructure Tbk (TBIG), PT Solusi Tunas Pratama, and PT Sarana Menara Nusantara Tbk (TOWR).

Disclosure: No position at the stock mentioned above.
 
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Adira launches Rp400 bio MTN

PT Adira Dinamika Multi Finance Tbk has issued Rp400 billion medium term notes (MTN) last week. The issuance was part of Rp6 trillion bonds to be sold via shelf registration mechanism within 2 years.

The MTN was consisting of two tranches, A and B with 18 months and 24 months maturity. Adira Finance has mandated PT NISP Sekuritas to arrange the issuance.

For the rupiah bonds, Adira Finance, a subsidiary of PT Bank Danamon Tbk (BDMN), has picked four lead underwriters such as PT CIMB Securities Indonesia, PT Indo Premier Securities, PT Mandiri Sekuritas, and PT Standard Chartered Securities Indonesia

Disclosure: No position at the stock mentioned above.

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Indonesia Eximbank to sell Rp10 trio bond

Lembaga Pembiayaan Ekspor Indonesia (Indonesia Eximbank) plans to raise Rp10.50 trillion from the issuance of rupiah denominated bonds via shelf registration mechanism. In the first stage, Indonesia Eximbank will issue Rp2.5 trillion scheduled on December 21 this year.

The Rp2.5 trillion bonds will be issued in five different tranches. Three lead underwriters, PT Trimegah Securities Tbk, PT Danareksa Sekuritas, and PT Indo Premier Securities have been mandated to arrange the first stage of the issuance. PT Pemeringkat Efek Indonesia has assigned idAAA for Eximbank bonds with stable outlook.  Indonesia Eximbank will use 90% of the proceed as direct financing and the remaining will be used as indirect financing.

Disclosure: No position at the stock mentioned above.

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Timah to boost output to 50,000 tons

The state-controlled PT Timah Tbk (TINS) is planning to add its production to 50,000 tons next year from its target of 40,413 tons this year. The 2012's target counts 83% of the company's maximum capacity of 60,000 tons.

President Director Wachid Usman said the company strives to meet its target by boosting production of offshore activities. Timah claims that it has 70,000 tons of tin offshore reserves.

As of the third quarter 2011, Timah produced 14.602 tons from onshore mining and 13,564 tons from offshore mining.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

Stocks fell Monday, as Italian bond yields gained and investors questioned whether the country can implement austerity measures.

The Dow Jones Industrial Average lost 74.70 points, or 0.6%, to 12,078.98 points. All but three of the Dow's 30 components dropped. The Standard & Poor's 500-stock index fell 12.06 points, or 1%, to 1,251.79, as financial stocks fell the hardest. The Nasdaq Composite shed 21.53 points, or 0.8%, to 2,657.22. Trading volume was light.

Investors took their cues from European markets, which finished broadly lower. The Stoxx Europe 600 dropped 1%. The yield on Italy's 10-year debt inched closer to 7%, a threshold of close interest for investors. It pierced that mark last week, which prompted broad worries about the country's ability to borrow in the public markets.

"Everyone's watching that inverse relationship. As bond yields in Italy rise toward that 7% level, it's translating to investors selling equities here," said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management, as quoted by WSJ.com. How about Indonesia stock market today? Here are recommendations as quoted by Bisnis Indonesia today.

Reliance Securities:

Jakarta Composite Index (JCI) is estimated to move in bullish trend in the short term at the level of 3,775. In the short term, the index may reach 3,842. Several stocks to watch: INDF, INCO, and INTP.

Minna Padi Investama:

The JCI may rise with a resistance level of 3,875. Banking stocks may face further gain. Several stocks to watch: BMRI, BBCA, and BJBR.

Disclosure: No position at the stock mentioned above.

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Ilthabi pays US$10 mio to Petrosea

Coal contractor PT Petrosea Tbk (PTRO), a wholly owned subsidiary of PT Indika Energy Tbk (INDY), finally settled its dispute of a US$28.84 million non-performing receivable worth with PT Ilthabi Bara Utama.
On note 30, page 59 at September's financial statement, Petrosea has entered into a settlement agreement with Ilthabi on October 20 2011. Under the agreement, Ilthabi agreed to pay a sum of US$10 million before October 28 2011 in full and final settlements of all claims and demands of the company in respect of the Pakar Coal Project and Mining Services agreement.
In June last year, Petrosea dislcosed that it has written-off the bad receivable worth US$28.84 million due Ilthabi was unable to fulfill its commitment under the coal contracting agreement with Petrosea. Petrosea also filed the case to distric court of South Jakarta.
With the settlement agreement, Petrosea will obtain an extraordinary income of US$10 million from Ilthabi.
Petrosea had entered into agreement with Ilthabi Bara Utama on June 29 2007 to develop a greenfield coal mining project and construct supporting facilities located in East Kalimantan.
Due to the continuous failure of Ilthabi to meet the contractual payment terms on October 10 2008, Petrosea initiated suspension of project activities.
This followed a request from Ilthabi to minimize work and go on standby, including suspension or termination of subcontractors. By the time the project was suspended, physical progress had reached 79% completion. 

By end of September 2011, Petrosea recorded a 35.93% increase in revenue to US$184.74 million from US$135.91 million in 9M2010. Net profit rose 13.74% to US$33.03 million from US$29.04 million.
The largest contributor for Petrosea's revenue was mining services of US$160.19 million, services, and engineering and construction of US$13.79 million and US$10.74 million.
Its affiliated companies such as PT Santan Batubara and PT Kideco Jaya Agung contributed US$38.49 million and US$19.65 million or US$58.15 million in total. PT Gunung Bayan Pratama Coal and PT Adimitra Baratama Nusantara contributed US$57.79 million and US$46.65 million revenue.
Ilthabi sold coal assets to PT Bayan Resources Tbk (BYAN) last year. Bayan also bought coal assets in East Kalimantan from Prime Mine Resources Limited and Romo Nitiyudi Wachjo.
Bayan acquired 100% holding in PT Tanur Jaya, PT Apira Utama, PT Cahaya Alam, PT Bara Sejati from Ilthabi Bara Utama and Romo Nitiyudi Wachjo. Bayan also agreed to buy 99% shareholdings in PT Tiwa Abadi, PT Sumber Api, PT Silau Kencana, PT Orkida Makmur, and PT Dermaga Energi, from Ilthabi Bara Utama, Prime Mine Resources, and Romo Nitiyudi Wachjo.

Disclosure: No position at the stock mentioned above.

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Benakat sells 2.45% stake in Elnusa

Oil and gas company PT Benakat Petroleum Energy Tbk (BIPI) disposed 2.45% stake or 178.57 million shares in PT Elnusa Tbk, giving Benakat with a proceed of Rp37.49 billion.
Director Elia Massa at Elnusa, in a disclosure information submitted to Indonesia Stock Exchange, said Benakat sold Elnusa shares at Rp210 a share on October 27 2011.
She said the shares disposal was aimed as collateral of loan facilities. Post the disposal, Benakat's ownership in Elnusa shrank to 34.706% from 37.156%.
As of September 2011, Benakat recorded a Rp4 billion net profit from a net loss of Rp94.05 billion in the same periode of 2010. Revenue rose 41.9% to Rp253.13 billion   

Disclosure: No position at the stock mentioned above.  

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Indo Straits seals US$35 mio loan

PT Indo Straits Tbk (PTIS) has secured a US$35 million loan facility from PT Bank Permata Tbk (BNLI).
In a press statement filed to Indonesia Stock Exchange, the facility will be used by Indo Straits to support capital expenditure program for the next 2 years.
The company plans to acquire or make loader ship to expand its market share. It also aims to put investment into tug boat facilities.

Indo Straits, in September, also obtained a contract of transhipping a minimum quantity of 2,40 million tons coal over an initial period of 6 months.

The contract, which will tentatively commence in September 2011, takes place at coal mine in Satui, South Kalimantan. The arrangement also allows for option for another 6 month contract extension following the end of the initial 6 months period.

"This is an excellent milestone for Indo Straits given that Arutmin Indonesia has been a long-standing esteemed client for our marine engineering division," said Indo Straits.

Disclosure: No position at the stock mentioned above.  

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Stock recommendations today

The improvement in the US economy indicators as well as the step down of Greek Prime Minister George Papandreu are expected to bring positive sentiments to Jakarta Composite Index (JCI) this week.

Managing Research Reza Priyambada at Indosurya Securities, as quoted by Bisnis Indonesia today, said Greek and Italy have shown their intention to fix their government structural. "I expect those factors could bring positive sentiments to the JCI," he said. How about Indonesia stock market today?

e-Trading Securities:

The JCI today may fluctuate within the range of 3,729-3,829. Several stocks to watch: HRUM, MPPA, and SMGR.

Sinarmas Sekuritas:

Today, the index is estimated to abate within the range of 3,750-3,810. The JCI movement will be affected by the voting result at Italy senate in a bid to determine saving budget, which is in line with its program to cut debt. Several stocks to watch: MYOR, ASRI, BWPT, and ISAT.

Disclosure: No position at the stock mentioned above.


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Where Bumi puts its money?

Nathaniel Rothschild, one of shareholders at London-based company Bumi Plc with 11% stake, has officially sent a letter and called a radical clean-up in PT Bumi Resources Tbk (BUMI).
He also questioned Bumi Resources why the company not to call its loan to companies, including PT Recapital Asset Management. Where Bumi Resources actually puts its money?

Referring to Bumi Resources's June financial report, page 75, the company and Recapital Management,  On August 27, 2008, entered into a discretionary fund contract for a period of 6 months and subject to extension as agreed by both parties. 

Based on this contract, Bumi Resources will give full  authority to Recapital as investment manager to carry out the management of Bumi Resources funds up to an amount of US$350 million.
On February 28, 2011, the agreement was extended until August 27, 2012.  On September 2, 2009, Bumi and Recapital entered into a second discretionary  fund contract for a period of 6 months and  subject to extension as agreed by both parties. 

Based on this contract, Bumi will give full  authority to Recapital as investment manager to  carry out the management of Bumi’s funds up to an amount of US$50 million. On  February 28, 2011, the agreement was extended until August 27, 2012. All short-term investments are with third parties. 

Check page 93, On November 2, 2009, Bumi also entered into a loan agreement with PT Bukit Mutiara, wherein the Company agreed to grant a loan facility with the principal amount up to US$300 million to
Bukit Mutiara in connection with a share sale and subscription agreement, which Bukit Mutiara is negotiating in relation to the acquisition of an indirect 90.0% interest in PT Berau Coal. The loan is unsecured and shall be repaid in full upon its maturity in 2015. The interest rate  of the loan is 12% per annum and is payable
every quarter

If Bumi calls the loan to Bukit Mutiara and investments at Recapital, Bumi Resources could obtain US$700 million plus returns and interest rate.

A local investment manager working at an asset management company said what Nat Rothschild's concern is related to the current situation of Bumi Resources.
Besides concern to Recapital, the investment manager asked why Bumi wants to propose shares buyback if he has to seek and finally obtain loan facilities for CIC's debt refinancing? Under current situation, he said Bumi is expected to focus on its debt payment and its operational business. 

"I don't understand why Bumi proposes shares buyback? Why don't they just focus on debt payment and operational performance?" the investment manager said.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

Stocks rose as hopes of an improving labor market and clarification about France's credit rating buoyed investor sentiment.

The Dow Jones Industrial Average, as quoted by WSJ.com, finished up 112.85 points, or 1%, to 11,893.79, after gaining as much as 180 points. Cisco Systems led the index higher, rising $1, or 5.7%, to US$18.61. The networking company's upbeat outlook offered signs that its turnaround effort may be working.

All but two of the Dow's 30 components rose; Bank of America and American Express were the lone decliners. A glitch at the New York Stock Exchange caused problems with some trades and resulted in slight revisions to the Dow's final closing figures.

The Standard & Poor's 500-stock index gained 10.60 points, or 0.9%, to 1,239.70, led higher by energy and health-care stocks. All 10 S&P 500 sectors rose.

The Nasdaq Composite tacked on 3.50 points, or 0.1%, to 2,625.15. The technology-oriented index's gains trailed the other major indexes in part due to Apple, which fell 10.06, or 2.6%, to 385.22, the measure's largest point-decliner. How about Indonesia stock market today?

e-Trading Securities:

Jakarta Composite Index (JCI) today is estimated to move within 3,729-3,836. Several stocks to watch: TLKM, INDF, and ENRG.

Minna Padi Investama:

The JCI may move with high volatility today. External factors will drive the index movement. Several stocks to watch: BJBR, BBRI, and BMRI. 

Panin Sekuritas:

The index may fluctuate within the range of 3,700-3,805 today. Yesterday, the JCI fell 1.9% to 3,783.88, driven by debt crisis in European countries. 

Disclosure: No position at the stock mentioned above.

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Rothschild calls for clean-up at Bumi

Nathaniel Rothschild has criticised the management and corporate governance at the Indonesian coal company he is trying to transform into a top-tier global miner.
In a letter seen by the Financial Times, Rothschild called for a “radical cleaning up” of PT Bumi Resources Tbk, the Jakarta affiliate of London-listed Bumi plc and one of the world’s biggest coal miners.
The letter has raised tensions between the aristocratic billionaire and his Indonesian co-investors, the Bakrie family, who are Bumi’s largest shareholders.
“Both myself and the Bakries need an immediate transformation of the way you are choosing to manage PT Bumi Resources,” he wrote in his letter to Ari Saptari Hudaya, a long-time Bakrie family lieutenant who is chief executive of both Bumi Resources and Bumi.
Rothschild owns 11% of Bumi, which in turn owns 29% of Bumi Resources.
His indirect shareholding has raised questions about his ability to influence change at the coalminer. The Bakries did not sign the letter.
“My relationship with the Bakries is just fine,” Rothschild told the FT. “I think they will be thrilled when they read a copy of this letter.”
A spokesman for the Bakrie family, whose financial difficulties forced them to sell half of their Bumi stake this month, said the letter had taken them by surprise.
“We certainly don’t know where this is coming from,” Chris Fong said in Jakarta.
“The points raised in the letter were all raised in due diligence and are a matter of public record ... It’s news to anybody why Nathaniel chose to do it this way.”
Hudaya and Bumi Resources management could not be reached for comment.
In a telephone interview with the FT, Rothschild cast himself as an activist shareholder in the very venture he launched 1 year ago and co-chairs.
Specifically, he attacked Bumi Resources for extending loans to affiliated companies even as it struggled to refinance high-interest bearing debt.
On Tuesday the coalminer refinanced a US$600 million loan from China’s sovereign welfare fund.
Rothschild asked why Bumi Resources had not called in more than $500m of loans to companies including Recapital, Bumi’s third-largest shareholder. He also called for “repatriation of the funds deposited with connected parties ‘for investments’” and requested that Lord Renwick, Bumi’s audit committee chairman, be briefed on US$394 million worth of assets held by Bumi Resources.
Bumi’s shares have fallen 8% over the past 3 months. Rothschild owns lucrative options that will vest if Bumi’s shares rise above £10 per share. On Wednesday they fell 1%to 810p.

 
Disclosure: No position at the stock mentioned above.
 
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S&P upgrades BSP rating to CCC+

Standard & Poor's Ratings Services (S&P) said today that it had raised its long-term corporate credit rating on Indonesia-based plantation company PT Bakrie Sumatera Plantations Tbk. (BSP) to CCC+ from CC. The outlook is negative. We removed the rating from CreditWatch, where it had been placed with positive implications on Nov. 1, 2011.
"We raised the rating on BSP because we believe the pressure on the company's liquidity has temporarily eased after it refinanced its US$185 million senior secured notes due Nov. 1, 2011," said Standard & Poor's credit analyst Vishal Kulkarni, in a press statement yesterday.
"We expect BSP to maintain its vulnerable business risk profile and highly leveraged financial risk profile."
The rating on BSP reflects the company's sizable debt maturities in the next 12 months and weak operating efficiency." 

The rating also reflects the volatility in BSP's earnings due to its exposure to the cyclicality in the prices of crude palm oil (CPO) and rubber. We expect the demand for CPO to remain steady over the next one to two years. The steady demand for CPO and the commencement of BSP's downstream facilities partly offset the weaknesses. The BSP management's established record and experience in the plantation business underpin the rating.
"We assess BSP and its 99.02% owned subsidiary Agri International Resources Pte. Ltd. (CCC+/Negative/--) as a consolidated  entity. We expect BSP to put in place a plan to refinance Agri International's US$150 million senior secured notes due July  2012, even though it does not guarantee the notes."

BSP's weak operating profile and high debt stemming from recent acquisitions have resulted in fragile cash flow protection measures. In addition, cyclical and volatile CPO prices have led to unpredictable earnings and cash flows for the company. 

"Nevertheless, BSP will continue to benefit from high CPO and rubber prices over one to two years. In addition, we expect BSP's acquisition of Indonesia-based oleo chemicals producer Domba Mas in 2010 to help stabilize the company's cash flows, because the prices of oleo chemicals are generally less volatile than the prices of CPO."
In S&P view, BSP's liquidity is weak. The company's ratio of sources of liquidity to uses of liquidity is about 0.7x, where S&P expects it will remain in 2012 and 2013. S&P expects BSP's debt servicing burden to be higher starting 2012 because of the amortizing nature of most of the debt at the company and at Domba Mas.
"The negative outlook on BSP reflects our expectation that the company's liquidity will remain weak because of: (1) significant debt maturing in the next 12 months; and (2) higher debt servicing needs due to the amortizing nature of most of its debt," said Mr. Kulkarni. 

S&P may lower the rating if BSP in unable to come up with a plan to refinance Agri International's notes in the next 6 months.
Given the absence of a cross-default clause between BSP and Agri International, a default by Agri International may not necessarily lead to a default by BSP. But such a situation would likely constrain BSP's access to funding sources and put pressure on the ratings.
We could revise the outlook to stable if BSP maintains adequate liquidity and complies with its loan covenants. 

Disclosure: No position at the stock mentioned above.


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