BI rate rised by 50 bps to restore confidence in rupiah currency

Bank Indonesia raised the BI rate by 50 bps to restore confidence in the rupiah currency.



The central bank also issued a number of other policies that lower the minimum holding period of Bank Indonesia certificates (SBI) from 6 months to 1 month; bank ownership on certificates of deposit of Bank Indonesia (SDBI) will calculate as a secondary reserve requirement; extension of BSA period worth U.S. $ 12 billion by the Bank of Japan.

This aggressive assess that increase BI rate considere be able to restore confidence in the rupiah currency. The inflation forecast to 9% and 5% YoY in the midst of a weakening rupiah projections (each 10% depreciation of the rupiah will make inflation rise 0.8 % points) and due to the new CPI weightings that will impact effectively on the fourth quarter (Q4) of 2013.

The analyst (Mandiri Securities Research) predicts the economic growth will slow and also revised GDP to 5.8% in 2013 and 5.9% in 2014, from previous assumptions respectively by 5.9% and 6.3%.

BI rate hike will affect the banking sector, especially in terms of GDP growth that will impact on credit growth expectations. Some economists also predict that the central bank may raise the BI rate by 25 bps to 50 bps again until the end of the year and make the BI rate sit at 7.25% -7.5% by the end of the year.

BI rate hike also impact the credit sector that primarily slowing down the credit growth, non-performing loans (NPL), and lowering th margin.

Even so, some banks that have a large excess funds (as evidenced by the low ratio of loans to deposits / LDR) and has a low of time deposits. The two banks would benefit most are PT Bank Central Asia Tbk (BBCA, Rp8.950, NEUTRAL, TP Rp9.700) and BMRI.

for Indonesia Market Summaries

Mitra Pinasthika Mustika Auto will distribute Nissan

PT Mustika Pinasthika Mitra Tbk (MPMX, Rp970), owned by Saratoga Capital Group company, through its subsidiary, Mitra Pinasthika Mustika Auto (MPM Auto) will distribute Nissan car.

The plan was based on cooperation between dealer sales and service agreement with PT Nissan Motor Distributor Indonesia (NMDI) on August 23. The agreement will make MPM Auto as one of the official Nissan dealer.

MPM Auto will support Nissan in retail sales and the needs of dealership network to boost their market share in the near future, along with market support for the secondary principal from Japan.

PT Indomobil Sukses Internasional Tbk (IMAS, Rp4.925, BUY, TP RpRp6.000) will also have the advantage, because of the additional independent dealers will help launch Datsun LCGC.

Through IMAS, Nissan only has 90 dealers, under Toyota which has 240 dealers (83 PT Astra International Tbk / ASII dealers and 149 independent dealers), while Daihatsu 200 dealer (96 ASII dealers and 100 independent dealers). IMAS will also earn additional contribution of revenue because it has a 25% NMDI stake as a wholesale seller.

On the other hand, MPMX also being set Rp 150 billion for buyback. Issuer has delivered a notice to the stock exchange and capital market authorities with a maximum purchase price of Rp 1.150.

for Indonesia Market Summaries

PT Summarecon Agung Tbk reported a net profit after tax

PT Summarecon Agung Tbk (SMRA, Rp730) reported a net profit after tax (NPAT) throughout the semester I/2013 Rp 612 billion, an increase of 76.8% year on year (YoY) and -9.2% quarter on quarter (QoQ). Despite the gains, the performance is still below the estimate (68.6% of the 2013 target) and the consensus of market participants (60.9% of the 2013 target).



SMRA' Operating margin rose if based YoY, but down if based QoQ. Per semester I/2013, SMRA is still at the level of net cash to net debt ratio (net gearing) -33%.

Issuers also plans to issue Rp 2 trillion in bonds on Semester II/2013 to acquire land in South Jakarta. If the bond's interest above the target of 0%, then the number of publications can be down. The company still has cash Rp 2,7 trillion at the end of the semester I/2013.

In the same period, SMRA record sales of 2 trillion or 44% of year target. SMRA' Management is targeting NPAT Rp 1 trillion in 2013. Currently SMRA shares traded at PE ratio of 10.7 x 2013.

for Indonesia Market Summaries

Operational performance of PT United Tractors Tbk down 2.5% on July

Operational performance of PT United Tractors Tbk (UNTR, Rp14.750, NEUTRAL, TP Rp17.000) during July were down 2.5% month on month (MoM) rated below expectations. The decline caused by a decrease in mining and construction sectors in the same period.



Sales of UNTR in construction sector during the first 7 months of 2013, which represents 55% of the 2013 target is still under estimation. The sales decline was associated with rising interest rates and the fell of Rupiah's exchange rate against the U.S. dollarto undermine the interests of the non-mining sector. Mining sector demand is still low due to the price of coal is still weak.

Contract mining down 5% MoM due to higher rainfall in July. Overburden removal project fell 5.7% MoM and coal production fell 5.2% MoM in July, still within the expectations. July coal sales volume fell 41.2% MoM due to weak prices.

Low price also makes UNTR lowering sales volume and are under expectation and only 41.7% of our 2013-year target. UNTR currently traded at the price per earnings ratio (PE ratio)  11.6 x for 2013 and 10.5 x for 2014.

for Indonesia Market Summaries

Indonesia Market Summaries 27 August 2013

PT Bank Mandiri Tbk is studying the provisions of buyback stock

Corporate Secretary of PT Bank Mandiri Tbk (BMRI, Rp7.100) Mr. Nizon Napitupulu said that the company is studying the provisions of buyback stock. As is known, the Financial Services Authority (Otoritas Jasa Keuangan / OJK) allows issuers to buy shares without going through the GMS. However, buyback without AGM can only be done if the IHSG index fell 15% in three consecutive days.

These provisions are summarized in the OJK rules number 02/POJK.04/2013 about Buy Back of Shares Issued by Public Listed Company in the Market Conditions Fluctuate Significantly. According to the company, although the FSA already allow it, but the company is still studying the regulations, particularly related to the banking corporate action. (IMQ)

Hatta Rajasa claimed the government held a marathon meeting

Coordinating Minister Hatta Rajasa claimed the government held a marathon meeting after President SBY read the policy. The reason is, the policy must be realized in ministerial regulations form. Hatta admitted the government is concentrating on the Current Account Deficit (CAD).

According to the government to make sure to address the deficit. Today the economic ministers meeting back at the office Hatta Rajasa. The discussion today will focus on the reduction of fuel imports by increasing the use of biodiesel. (DetikFinance)

for Indonesia Market Summaries

PT Indofood Sukses Makmur Tbk gained net sales up 9,3%

In the first semester of 2013 financial statements, PT Indofood Sukses Makmur Tbk (INDF, Rp5.900 BUY TP: Rp8.700) recorded consolidated net sales amounted to Rp 26,86 trillion. Sales gained by INDF was up 9.3% on an annual basis compared to the first half of 2012 of Rp 24,58 trillion.



INDF states, the company's strategic business groups, namely Group Consumer Branded Products (CBP) accounted for 45% of total revenue. While revenues from Bogasari business line, Agribusiness and Distribution respectively contributed 27%, 21% and 7% of total revenue.

However, operating profit of INDF fell 18.1% to Rp 2,93 trillion in the first semester of 2013 from Rp 3,57 trillion in the first half of 2012. Operating margin also fell to 10.9% from 14.5%.

for Indonesia Market Summaries

SKK Migas overhaul the management structure

Special Unit the Upstream Oil and Gas (SKK Migas) finally overhaul the management structure to maintain the upstream oil and gas investment climate. Information obtained, the inauguration of SKK Migas' leaders held on Monday (26/8) at 15:00 pm in their office. Not yet clear who will be replaced in the inauguration.

Rumors that a number of SKK Migas official name will be replaced, including Deputy of Operations Control Mr Muliawan, Deputy of Financial Control Mr Akhmad Syakhroza, Deputy of Commercial Control Mr Widhyawan Prawiraatmadja, Deputy of Business Support and Control Mr Gerhard M Rumeser.

Meanwhile, officials touted replacements include former Deputy of Legal of BP Migas Mr Lambok Hutahuruk.

Susilo Siswoutomo, Deputy of Minister of Energy and Mineral Resources, previously said they had received several proposals related to the change of leadership. The proposal will be reviewed before proposed to be established and appointed by the Minister.

Corresponding to Presidential Decree (Peraturan Presiden / Perpres) No. 9/2013 on the Implementation of Management of the Upstream Oil and Gas, the turn of deputy and officials level proposed by chief of SKK Migas to Minister of Energy and Mineral Resources. Furthermore, upon the proposal, the Minister ask for approval to the Supervisory Commission.

for Indonesia Market Summaries