Bumi Resources, Asia’s largest exporter of thermal coal, is undervalued,
a director at the company said, following a recent slide in its share
price that last week left it at its lowest since March 2009.
“I’d
think we are at least five times undervalued at today’s levels by any
yardstick and as we increase output and reduce costs,” Bumi director
Dileep Srivastava wrote in an e-mail on Monday.
This year,
shares of Bumi, the nation’s biggest coal producer by volume, have
fallen 68 percent, making it the second-biggest loser in the 449
companies listed on the Indonesia Stock Exchange (IDX). It dropped 4.1
percent to Rp 700 on Monday.
Bumi trades at 9.1 times this
year’s estimated earnings, compared with a multiple of 15 for the
benchmark Jakarta Composite Index, accor ding to Bloomberg data.
Some
analysts warn that the drop in stock price may make it cheap but there
are other concerns. Ruben Sukatendel, who helps manage Rp 6 trillion
($626 million) in assets at BNI Asset Management, said the large debt in
the group was unappealing, especially long-term, unless the company can
settle its debts.
Dileep denied that the company was facing difficulties.
“I’d
say a combination of adverse economic conditions and undue speculation
impacts stock price. Most stories about us are unreal,” he said. “Our
first-half 2012 financials demonstrate our desire to achieve the highest
standards of transparency, adhere to international accounting
principles, strengthen our balance sheet and address earlier capitalized
expenses.”
Dileep said the company is “engaged in reducing
interest costs by seeking cheaper refinancing” and monetizing its
non-core assets “for cash to repay company debt.”
Bumi’s debt is
estimated at $3.95 billion, including outstanding bonds and convertible
bonds, debts to several major lenders, some of which are in China.
Source :
Jakarta Globe, 08 Agustus 2011
http://www.thejakartaglobe.com/business/bumi-director-says-firm-is-undervalued/543633
Tampilkan postingan dengan label Jakarta Globe. Tampilkan semua postingan
Tampilkan postingan dengan label Jakarta Globe. Tampilkan semua postingan
Rabu, 23 Januari 2013
Bumi at 3-Year Lows but Stock Not Cheap: Analysts
Investors should remain cautious in trading shares of Bumi Resources and
other Bakrie-related companies even as valuations drop, on concern that
mounting debt can always trigger another stock price decline, extending
losses of the past few weeks, some analysts say.
Bumi Resources has fallen 22 percent in the past two weeks and traded last week at the lowest since March 2009. Before that the stock had been declining as its debt rating was lowered by Moody’s Investors Service and Standard & Poor’s Rating Agency. Both had cut Bumi’s rating on concern that its declining revenue from coal sales and increasing production cost will affect its ability to pay debt. Two weeks ago it posted a first-half net loss on higher operating costs
So far this year shares of Bumi, the biggest coal producer in Indonesia by volume, have lost 66 percent to close on Friday at Rp 730 per share, making it the second-biggest loser among 449 listed companies on the Indonesia Stock Exchange (IDX) and underperforming the mining index’s 25 percent decline, according to Bloomberg data.
Being down so much this year may make the stock a bargain for some investors, but analysts warn that cheap valuation should not be the only consideration.
“I prefer to enter when Bumi hits below Rp 600 per share,” said Edwin Sebayan, head of research at MNC Securities in Jakarta. “We are still having a pessimistic view on the stock’s valuation with Rp 520 as the target price [this year],” he said.
Edwin set Rp 740 for Bumi as an optimistic price target. Bloomberg data show that Bumi’s estimated price-to-earnings ratio is 9.5 for this year. By comparison the benchmark Jakarta Composite Index has a multiple of 15.
Edwin said Bumi’s financial condition is still far from safe for investors to bet on the company. According to Edwin, with the $334 million net loss in the first half, compared to $227 million profit on the same period last year, its debt-to-equity ratio has risen, to 8.9.
The company’s cash position at $121.85 million is too small when the company, according to his calculation, has about Rp 3.1 trillion ($323 million) in principal payments on its debt maturing this year, and the company may not have enough money to even make payments on interest alone.
Media have recently reported that the company might sell its 50 percent stake in an unlisted coal mine for $200 million. Bumi director Dileep Srivastava has refused to comment on that except saying that “we are committed to monetizing assets at a profit to settle debt.”
Last year, the company canceled its plan to sell a stake in Bumi Resources Minerals, its non-coal subsidiary, citing low valuation. In the past 12 months that stock has fallen 33 percent.
Parent company Bumi is planning on paying the remaining $1.3 billion of its debt to China Investment Corporation in the next two years to reduce its debt and interest expenses.
“We believe our first-half financials have been misread by the uninitiated aggravated by some mischievous reporting,” Srivastava said.
Meanwhile, big debt is also undermining investment in other Bakrie-related companies.
Ruben Sukatendel, who helps manage Rp 6 trillion in assets at BNI Asset Management, said that the large debt in the group is certainly a turn-off for him, especially long term.
“Bakrie group stocks are not in our investment choices for the long run except if the company can come up with a solution to settle their debts,” Ruben said.
“Maybe for short-term trading. Stocks in this group are already very cheap, and it could be the time to buy if you use a hit-and-run strategy,” he added, referring to a quick “buy low and sell high” trading method.
Among other listed stocks, Bakrie Telecom has lost 50 percent. Bakrie Telecom paid off its Rp 650 billion debt on Tuesday, the due date instead of the day before as the company promised earlier. The IDX had suspended trading on Bakrie Telecom’s stock for a day on Tuesday because of the delayed payment.
Energi Mega Persada, an oil company, dropped 51 percent, putting its estimated price-to-earnings ratio at 9.1, according to data on Bloomberg, which had no forecasts for Bakrie Telecom and Bumi Resources Minerals.
Shares of Bakrie & Brothers, the holding company for the companies listed on the IDX, has been trading at a low of Rp 50 since February.
Source :
Jakarta Globe, 10 September 2012
http://www.thejakartaglobe.com/business/bumi-at-3-year-lows-but-stock-not-cheap-analysts/543377
Bumi Resources has fallen 22 percent in the past two weeks and traded last week at the lowest since March 2009. Before that the stock had been declining as its debt rating was lowered by Moody’s Investors Service and Standard & Poor’s Rating Agency. Both had cut Bumi’s rating on concern that its declining revenue from coal sales and increasing production cost will affect its ability to pay debt. Two weeks ago it posted a first-half net loss on higher operating costs
So far this year shares of Bumi, the biggest coal producer in Indonesia by volume, have lost 66 percent to close on Friday at Rp 730 per share, making it the second-biggest loser among 449 listed companies on the Indonesia Stock Exchange (IDX) and underperforming the mining index’s 25 percent decline, according to Bloomberg data.
Being down so much this year may make the stock a bargain for some investors, but analysts warn that cheap valuation should not be the only consideration.
“I prefer to enter when Bumi hits below Rp 600 per share,” said Edwin Sebayan, head of research at MNC Securities in Jakarta. “We are still having a pessimistic view on the stock’s valuation with Rp 520 as the target price [this year],” he said.
Edwin set Rp 740 for Bumi as an optimistic price target. Bloomberg data show that Bumi’s estimated price-to-earnings ratio is 9.5 for this year. By comparison the benchmark Jakarta Composite Index has a multiple of 15.
Edwin said Bumi’s financial condition is still far from safe for investors to bet on the company. According to Edwin, with the $334 million net loss in the first half, compared to $227 million profit on the same period last year, its debt-to-equity ratio has risen, to 8.9.
The company’s cash position at $121.85 million is too small when the company, according to his calculation, has about Rp 3.1 trillion ($323 million) in principal payments on its debt maturing this year, and the company may not have enough money to even make payments on interest alone.
Media have recently reported that the company might sell its 50 percent stake in an unlisted coal mine for $200 million. Bumi director Dileep Srivastava has refused to comment on that except saying that “we are committed to monetizing assets at a profit to settle debt.”
Last year, the company canceled its plan to sell a stake in Bumi Resources Minerals, its non-coal subsidiary, citing low valuation. In the past 12 months that stock has fallen 33 percent.
Parent company Bumi is planning on paying the remaining $1.3 billion of its debt to China Investment Corporation in the next two years to reduce its debt and interest expenses.
“We believe our first-half financials have been misread by the uninitiated aggravated by some mischievous reporting,” Srivastava said.
Meanwhile, big debt is also undermining investment in other Bakrie-related companies.
Ruben Sukatendel, who helps manage Rp 6 trillion in assets at BNI Asset Management, said that the large debt in the group is certainly a turn-off for him, especially long term.
“Bakrie group stocks are not in our investment choices for the long run except if the company can come up with a solution to settle their debts,” Ruben said.
“Maybe for short-term trading. Stocks in this group are already very cheap, and it could be the time to buy if you use a hit-and-run strategy,” he added, referring to a quick “buy low and sell high” trading method.
Among other listed stocks, Bakrie Telecom has lost 50 percent. Bakrie Telecom paid off its Rp 650 billion debt on Tuesday, the due date instead of the day before as the company promised earlier. The IDX had suspended trading on Bakrie Telecom’s stock for a day on Tuesday because of the delayed payment.
Energi Mega Persada, an oil company, dropped 51 percent, putting its estimated price-to-earnings ratio at 9.1, according to data on Bloomberg, which had no forecasts for Bakrie Telecom and Bumi Resources Minerals.
Shares of Bakrie & Brothers, the holding company for the companies listed on the IDX, has been trading at a low of Rp 50 since February.
Source :
Jakarta Globe, 10 September 2012
http://www.thejakartaglobe.com/business/bumi-at-3-year-lows-but-stock-not-cheap-analysts/543377
Indonesia Company Sukuk Shortage Curbs Returns: Islamic Finance
Indonesia’s three best-performing Islamic bond funds say a rebound in
corporate sukuk sales is failing to keep up with demand from investors
chasing higher returns as government yields decline.
Insight Investments Management’s top-ranked I-Hajj Syariah Fund wants to boost company holdings from 80 percent if more securities become available, President Director Tony Henri said in an interview in Jakarta last week. Akbar Syarief, fund manager at MNC Asset Management, overseeing the second-best performer, said his confidence in finding buyers is not matched by certainty there will be sufficient supply.
“Right now the concern is that when money comes in, there may not be securities to invest in,” Jakarta-based Syarief, whose MNC Dana Syariah vehicle returned 3.8 percent this year, said in a June 26 interview. “Corporate sukuk will always be in high demand.”
The yield on Indonesia’s Shariah-compliant rupiah bond due August 2018 fell 1.12 percentage points in the past year to 6.20 percent, compared with the 8.1 percent average return for Indonesia’s six sukuk funds over the same period. Bank Muamalat Indonesia lifted its June sale to Rp 800 billion ($85 million) from Rp 500 billion after investors sought 2.2 times the amount first offered, Finance Director Hendiarto said.
Corporate sales have reached Rp 1.5 trillion so far this year, compared with just Rp 200 billion for the whole of 2011. Etty Retno Wulandari, a Jakarta-based director at the Capital Market and Financial Institution Supervisory Agency, said last month she expected 2012 offers to get to Rp 3 trillion. However, official data shows the 20 percent average growth in outstanding corporate sukuk over the past five years still trails the 40 percent expansion in Islamic banking assets.
‘Don’t actively trade’
“Our fund could be much bigger but Islamic bond issuance isn’t growing as fast as banking assets,” Insight’s Henri said. “We don’t actively trade the company sukuk because once we sell it, it is difficult to look for new products to invest in.”
Worldwide sales of bonds that comply with Islam’s ban on interest climbed to $21 billion in 2012 from $14 billion in the same period of 2011, according to data compiled by Bloomberg. Offerings reached a record $36.7 billion last year.
Malaysia, the world’s largest sukuk market, has exempted investors from paying taxes on capital gains made on Shariah-compliant debt denominated in currencies other than the ringgit through 2014. Indonesia offers no similar incentive because it is committed to keeping Islamic products on an equal footing with non-Islamic securities, the Capital Market Agency’s Wulandari said last month.
Tax benefits
“There needs to be tax benefits for the Shariah-compliant capital market to grow,” Insight’s Henri said. “Issuing Islamic bonds requires more processing and there needs to be a pay-off to make them more or equally lucrative as conventional bonds.”
The I-Hajj Syariah fund returned 4 percent this year and 10.3 percent in 2011, the most among the six Indonesian sukuk vehicles tracked by Bloomberg, which advanced by an average of 3.1 percent in 2012 and 8.8 percent last year.
Assets held by Islamic bond and stock funds in Indonesia increased by an annual average of 96 percent over the last five years and account for 3 percent of the nation’s total managed funds, Capital Market Agency data show.
“We plan to launch more sukuk funds going forward, if there are products,” MNC Asset’s Syarief said, adding that he would like to increase his allocation for corporate notes to 70 percent from 50 percent. “Government Islamic bonds tend to be more volatile and yield lower, so we need to balance our fund with corporate notes.”
‘Bright outlook’
Global Shariah-compliant bonds returned 5.1 percent this year, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index, while debt in developing markets gained 7.8 percent, JPMorgan Chase & Co.’s EMBI Global Index shows.
The average yield on Islamic bonds fell one basis point, or 0.01 percentage point, to 3.44 percent on June 29, the lowest since August, according to the HSBC/NASDAQ Sukuk index. The difference between the average yield and the London interbank offered rate, or Libor, narrowed three basis points to 240 basis points.
Corporate Islamic debt sales in Indonesia this year amount to just 2 percent of Malaysia’s 23.4 billion ringgit ($7.4 billion) of issuance in the same period, even though the former nation’s Muslim population is twelve times as big as its neighbors.
“Indonesia’s corporate sukuk market has a bright outlook,” Ruben Sukatendel, a Jakarta-based portfolio manager at BNI Asset Management, said in a June 27 interview.
“It is possible that Indonesia’s Islamic capital market may catch up to Malaysia’s if we see synergy between market players and regulators,” said Sukatendel, who oversees BNI Dana Syariah, the country’s debut sukuk fund and the third-best performing this year. Bloomberg
Source :
Jakarta Globe, 03 July 2012
http://www.thejakartaglobe.com/business/indonesia-company-sukuk-shortage-curbs-returns-islamic-finance/528341
Insight Investments Management’s top-ranked I-Hajj Syariah Fund wants to boost company holdings from 80 percent if more securities become available, President Director Tony Henri said in an interview in Jakarta last week. Akbar Syarief, fund manager at MNC Asset Management, overseeing the second-best performer, said his confidence in finding buyers is not matched by certainty there will be sufficient supply.
“Right now the concern is that when money comes in, there may not be securities to invest in,” Jakarta-based Syarief, whose MNC Dana Syariah vehicle returned 3.8 percent this year, said in a June 26 interview. “Corporate sukuk will always be in high demand.”
The yield on Indonesia’s Shariah-compliant rupiah bond due August 2018 fell 1.12 percentage points in the past year to 6.20 percent, compared with the 8.1 percent average return for Indonesia’s six sukuk funds over the same period. Bank Muamalat Indonesia lifted its June sale to Rp 800 billion ($85 million) from Rp 500 billion after investors sought 2.2 times the amount first offered, Finance Director Hendiarto said.
Corporate sales have reached Rp 1.5 trillion so far this year, compared with just Rp 200 billion for the whole of 2011. Etty Retno Wulandari, a Jakarta-based director at the Capital Market and Financial Institution Supervisory Agency, said last month she expected 2012 offers to get to Rp 3 trillion. However, official data shows the 20 percent average growth in outstanding corporate sukuk over the past five years still trails the 40 percent expansion in Islamic banking assets.
‘Don’t actively trade’
“Our fund could be much bigger but Islamic bond issuance isn’t growing as fast as banking assets,” Insight’s Henri said. “We don’t actively trade the company sukuk because once we sell it, it is difficult to look for new products to invest in.”
Worldwide sales of bonds that comply with Islam’s ban on interest climbed to $21 billion in 2012 from $14 billion in the same period of 2011, according to data compiled by Bloomberg. Offerings reached a record $36.7 billion last year.
Malaysia, the world’s largest sukuk market, has exempted investors from paying taxes on capital gains made on Shariah-compliant debt denominated in currencies other than the ringgit through 2014. Indonesia offers no similar incentive because it is committed to keeping Islamic products on an equal footing with non-Islamic securities, the Capital Market Agency’s Wulandari said last month.
Tax benefits
“There needs to be tax benefits for the Shariah-compliant capital market to grow,” Insight’s Henri said. “Issuing Islamic bonds requires more processing and there needs to be a pay-off to make them more or equally lucrative as conventional bonds.”
The I-Hajj Syariah fund returned 4 percent this year and 10.3 percent in 2011, the most among the six Indonesian sukuk vehicles tracked by Bloomberg, which advanced by an average of 3.1 percent in 2012 and 8.8 percent last year.
Assets held by Islamic bond and stock funds in Indonesia increased by an annual average of 96 percent over the last five years and account for 3 percent of the nation’s total managed funds, Capital Market Agency data show.
“We plan to launch more sukuk funds going forward, if there are products,” MNC Asset’s Syarief said, adding that he would like to increase his allocation for corporate notes to 70 percent from 50 percent. “Government Islamic bonds tend to be more volatile and yield lower, so we need to balance our fund with corporate notes.”
‘Bright outlook’
Global Shariah-compliant bonds returned 5.1 percent this year, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index, while debt in developing markets gained 7.8 percent, JPMorgan Chase & Co.’s EMBI Global Index shows.
The average yield on Islamic bonds fell one basis point, or 0.01 percentage point, to 3.44 percent on June 29, the lowest since August, according to the HSBC/NASDAQ Sukuk index. The difference between the average yield and the London interbank offered rate, or Libor, narrowed three basis points to 240 basis points.
Corporate Islamic debt sales in Indonesia this year amount to just 2 percent of Malaysia’s 23.4 billion ringgit ($7.4 billion) of issuance in the same period, even though the former nation’s Muslim population is twelve times as big as its neighbors.
“Indonesia’s corporate sukuk market has a bright outlook,” Ruben Sukatendel, a Jakarta-based portfolio manager at BNI Asset Management, said in a June 27 interview.
“It is possible that Indonesia’s Islamic capital market may catch up to Malaysia’s if we see synergy between market players and regulators,” said Sukatendel, who oversees BNI Dana Syariah, the country’s debut sukuk fund and the third-best performing this year. Bloomberg
Source :
Jakarta Globe, 03 July 2012
http://www.thejakartaglobe.com/business/indonesia-company-sukuk-shortage-curbs-returns-islamic-finance/528341
Despite Recent Slide, JCI Still a Buyer’s Market: Analysts
Indonesia’s main stock index posted its biggest decline in almost seven
months on Friday amid concerns about slowing economic growth in China
and Europe, but some investors say the recent tumble represents a buying
opportunity.
“It is actually the time to buy,” Ruben Sukatendel, a fund manager at BNI Asset Management, said on Friday. “The problem is not in Indonesia. Regional markets are concerned about China’s growth, increasing the possibility that we will see a big slowdown.”
The Jakarta Composite Index on Friday fell 2.1 percent, its largest drop since Nov. 1. It has lost 7.6 percent since May 3, when it closed at a record high of 4,224. For the year, the index is up 2.1 percent.
Valuation in the market is comparable to those of other benchmarks across the region. The JCI’s price-to-estimated-earnings ratio is 13.3, compared to 15.1 for the Philippine Stock Exchange Index and 12.8 for the Straits Times Index in Singapore, according to Bloomberg data.
Friday’s plunge has also made some stocks attractive relative to their profit potential.
United Tractors, a unit of Astra International that sells heavy-equipment vehicles, trades at 12.9 times this year’s estimated earnings, Bloomberg data show. The company had net income of Rp 5.9 trillion ($637 million) in 2011, and profit is projected to rise to Rp 6.82 trillion this year and to Rp 8.18 trillion in 2013, Bloomberg data show. Its stock dropped 5.4 percent on Friday, bringing its decline this year to 9.3 percent.
Shares of Semen Gresik, the nation’s biggest cement maker that stands to benefit from planned infrastructure projects, fell 3.5 percent on Friday, putting its price-to-estimated-earnings ratio at 14.3.
Domestic household spending accounts for about 60 percent of Indonesia’s economic activity, which will help to cushion against global financial shocks should demand for the nation’s exports plunge.
The government has forecast economic growth at 6.5 percent this year, accelerating to a range of 6.8 percent to 7.2 percent in 2013. Its 6.5 percent expansion last year was the fastest since 1996.
Source :
Jakarta Globe, 29 Mei 2012
http://www.thejakartaglobe.com/business/despite-recent-slide-jci-still-a-buyers-market-analysts/520447
“It is actually the time to buy,” Ruben Sukatendel, a fund manager at BNI Asset Management, said on Friday. “The problem is not in Indonesia. Regional markets are concerned about China’s growth, increasing the possibility that we will see a big slowdown.”
The Jakarta Composite Index on Friday fell 2.1 percent, its largest drop since Nov. 1. It has lost 7.6 percent since May 3, when it closed at a record high of 4,224. For the year, the index is up 2.1 percent.
Valuation in the market is comparable to those of other benchmarks across the region. The JCI’s price-to-estimated-earnings ratio is 13.3, compared to 15.1 for the Philippine Stock Exchange Index and 12.8 for the Straits Times Index in Singapore, according to Bloomberg data.
Friday’s plunge has also made some stocks attractive relative to their profit potential.
United Tractors, a unit of Astra International that sells heavy-equipment vehicles, trades at 12.9 times this year’s estimated earnings, Bloomberg data show. The company had net income of Rp 5.9 trillion ($637 million) in 2011, and profit is projected to rise to Rp 6.82 trillion this year and to Rp 8.18 trillion in 2013, Bloomberg data show. Its stock dropped 5.4 percent on Friday, bringing its decline this year to 9.3 percent.
Shares of Semen Gresik, the nation’s biggest cement maker that stands to benefit from planned infrastructure projects, fell 3.5 percent on Friday, putting its price-to-estimated-earnings ratio at 14.3.
Domestic household spending accounts for about 60 percent of Indonesia’s economic activity, which will help to cushion against global financial shocks should demand for the nation’s exports plunge.
The government has forecast economic growth at 6.5 percent this year, accelerating to a range of 6.8 percent to 7.2 percent in 2013. Its 6.5 percent expansion last year was the fastest since 1996.
Source :
Jakarta Globe, 29 Mei 2012
http://www.thejakartaglobe.com/business/despite-recent-slide-jci-still-a-buyers-market-analysts/520447
Selasa, 22 Januari 2013
Fund Managers Betting on Indonesian Stocks to Outperform Bonds
Fund managers say they are likely to reduce their holdings in Indonesian
bonds after last year’s strong gains and plan to raise their stakes in
equities on expectations that corporate profits will increase further
this year.
“Yields in fixed-income assets will narrow. Fund managers might move some of their funds to the equity market to look for more profitability,” said Ruben Sukatendel, an investment manager at BNI Asset Management, which oversees Rp 5 trillion ($556 million) in funds.
“Looking forward, fund managers might go 50-50 between the equity market and bond market,” he said. “Of course, it will be adjusted from time to time, depending on the market movement or when our market valuation is already too high, but it will not be far from 50-50.”
Bonds, especially government securities with longer-term maturities, gained in 2011 as international investors sought better returns than equities and other fixed-income assets.
Indonesia got a boost late last year when Fitch Ratings raised its rating on the country’s debt to investment level for the first time since 1997.
Moody’s Investors Service last week followed Fitch’s move, strengthening Indonesia’s position as a favorite among overseas investors for emerging-market debt amid the euro zone debt crisis that threatens to curtail global economic growth.
ETrading Securities said in a recent research report that the country’s declining risk as a consequence of upgrades on sovereign debt is likely to bring down borrowing costs for Indonesian companies, and that will lead to higher corporate profits.
In the corporate bond market just a few years ago, bonds with five-year maturities had yields of around 9 percent, data from the Debt Management Office at the Finance Ministry showed. Now, five-year bonds yield 8-9 percent, Ruben said, and with yields likely to decline further the bond market will become less attractive in terms of profitability.
Adira Dinamika Multi Finance, one of the nation’s largest financing companies, has Rp 238 billion in bonds that mature this October and yield 8.35 percent, which is higher than the 3.6 percent yield for comparable 1-year government bonds.
Dividends also make stocks an attractive investment. Adira’s stock has a 7.89 percent dividend yield, based on last year’s payout and its latest share price. Adira’s stock has risen 3.3 percent this month, extending last year’s 5.8 percent advance.
Still, the equity market faces risks at the moment, Ruben said.
“The concern is still about the European and US economies. The US economy is still very slow in recovering, while the euro zone debt crisis is still unclear on its solution,” Ruben said.
Bonny Iriawan, a director at Schroders Indonesia with Rp 62 trillion in assets under management, said that investors will be selective in bonds but the overall long-term prospects in the fixed-income market remain positive.
“For long-term investing like pension fund investors, it is still very positive. They will have to invest, and with Indonesia’s investment grade status, it will be very prospective,” Bonny said.
The benchmark Jakarta Composite Index has gained 4.5 percent this year and is 5 percent from its all-time closing high of 4,193.44 set on Aug. 1. Last year, the stock measure closed up 3.2 percent.
Bonny and Ruben believe that fixed-income assets will continue to be held by investors, in a nation in which fixed income is a bigger market than stocks. Bonds tend to be less risky than equities and longer maturities offer a more attractive return than savings rates. By comparison, commercial banks on average offer one-year deposit rates at 6.94 percent, according to Bank Indonesia data.
“We have to remember that Indonesian investors are typically conservative and moderate in taking risk. So demand for fixed-income market will still be strong,” Ruben said.
Source :
Jakarta Globe, 24 Januari 2012
http://www.thejakartaglobe.com/business/fund-managers-betting-on-indonesian-stocks-to-outperform-bonds/493371
“Yields in fixed-income assets will narrow. Fund managers might move some of their funds to the equity market to look for more profitability,” said Ruben Sukatendel, an investment manager at BNI Asset Management, which oversees Rp 5 trillion ($556 million) in funds.
“Looking forward, fund managers might go 50-50 between the equity market and bond market,” he said. “Of course, it will be adjusted from time to time, depending on the market movement or when our market valuation is already too high, but it will not be far from 50-50.”
Bonds, especially government securities with longer-term maturities, gained in 2011 as international investors sought better returns than equities and other fixed-income assets.
Indonesia got a boost late last year when Fitch Ratings raised its rating on the country’s debt to investment level for the first time since 1997.
Moody’s Investors Service last week followed Fitch’s move, strengthening Indonesia’s position as a favorite among overseas investors for emerging-market debt amid the euro zone debt crisis that threatens to curtail global economic growth.
ETrading Securities said in a recent research report that the country’s declining risk as a consequence of upgrades on sovereign debt is likely to bring down borrowing costs for Indonesian companies, and that will lead to higher corporate profits.
In the corporate bond market just a few years ago, bonds with five-year maturities had yields of around 9 percent, data from the Debt Management Office at the Finance Ministry showed. Now, five-year bonds yield 8-9 percent, Ruben said, and with yields likely to decline further the bond market will become less attractive in terms of profitability.
Adira Dinamika Multi Finance, one of the nation’s largest financing companies, has Rp 238 billion in bonds that mature this October and yield 8.35 percent, which is higher than the 3.6 percent yield for comparable 1-year government bonds.
Dividends also make stocks an attractive investment. Adira’s stock has a 7.89 percent dividend yield, based on last year’s payout and its latest share price. Adira’s stock has risen 3.3 percent this month, extending last year’s 5.8 percent advance.
Still, the equity market faces risks at the moment, Ruben said.
“The concern is still about the European and US economies. The US economy is still very slow in recovering, while the euro zone debt crisis is still unclear on its solution,” Ruben said.
Bonny Iriawan, a director at Schroders Indonesia with Rp 62 trillion in assets under management, said that investors will be selective in bonds but the overall long-term prospects in the fixed-income market remain positive.
“For long-term investing like pension fund investors, it is still very positive. They will have to invest, and with Indonesia’s investment grade status, it will be very prospective,” Bonny said.
The benchmark Jakarta Composite Index has gained 4.5 percent this year and is 5 percent from its all-time closing high of 4,193.44 set on Aug. 1. Last year, the stock measure closed up 3.2 percent.
Bonny and Ruben believe that fixed-income assets will continue to be held by investors, in a nation in which fixed income is a bigger market than stocks. Bonds tend to be less risky than equities and longer maturities offer a more attractive return than savings rates. By comparison, commercial banks on average offer one-year deposit rates at 6.94 percent, according to Bank Indonesia data.
“We have to remember that Indonesian investors are typically conservative and moderate in taking risk. So demand for fixed-income market will still be strong,” Ruben said.
Source :
Jakarta Globe, 24 Januari 2012
http://www.thejakartaglobe.com/business/fund-managers-betting-on-indonesian-stocks-to-outperform-bonds/493371
Strong Showing Likely As Trading Resumes
When trading resumes on Monday after the week-long Idul Fitri holiday,
Indonesia’s stock market is expected to open higher, supported by stable
regional financial markets and slow inflation, analysts in Jakarta
said.
“Regional markets were up by an average of 2.5 percent this week, so there is a good chance that the Jakarta Composite Index is set to open higher on Monday,” said Edwin Sebayang, head of research at the Jakarta-based MNC Securities.
The Hang Seng index in Hong Kong lost 1.8 percent on Friday but was up 3.2 percent for the week. The Nikkei 225 average in Japan dropped 1.2 for the day but had gained 1.7 percent in five days.
The JCI closed down 0.1 percent at 3,841.73 on Aug. 26, the latest day of trading and was little changed for the week.
Investors were monitoring the latest US employment report for signs of the state of the nation’s economy.
The government reported that in August, the unemployment rate was steady at 9.1 percent, suggesting that the US economy was at risk of slipping back into recession. Still, non-farm payrolls were unchanged in August after an 85,000 jobs gain in July.
The Dow Jones industrial average opened down 1.2 percent on Friday after rising 1.9 percent at the start of the week to Thursday.
Edwin said that global markets are starting to stabilize as US economic data showed the country was not stumbling into a recession.
“Economic indicators show that the US is actually far from recession, the economy was just slowing down,” he said.
He pointed to manufacturing activity, with the sector’s ISM index dipping to 50.6 in August compared to 50.9 in July — significantly higher than the consensus expectation of 48.5.
On Thursday, US weekly jobless claims were 409,000, slightly l ower than forecast of 410,000.
Edwin said that the market was also anticipating more stimulus from the Federal Reserve to spur the US economy.
The Fed was discussing a more aggressive rate policy to stimulate economic growth as well as a policy “linking rates to path of jobless rate,” Reuters reported on Wednesday.
Harry Su, head of research at state brokerage firm Bahana Securities, said the Indonesian market would take its cue from Asian markets’ openings on Monday morning. He was optimistic that this week’s positive sentiment would last through next week.
“Despite today’s [Friday] lackluster performance, regional markets were still positive for the week, and I think the Indonesian market should rise in tandem,” Harry said.
He added that he expected investors to see Indonesia, with its strong macroeconomy and limited reliance on exports, as a safe haven should the external volatility continue.
He recommended investors buy shares in domestic-oriented stocks such as banks, consumer goods and property developers.
The market is also anticipating Monday’s release by the Central Statistics Agency’s (BPS) of inflation data for August. The median estimate of five economists surveyed by the Jakarta Globe showed the consumer price index rising 4.74 percent.
In July, the inflation rate was 4.61 percent, with the month-on-month rate at 0.67 percent.
“Inflation doesn’t seem to be a threat because the month-on-month inflation is predicted to be between 0.75 percent and 1 percent,” Edwin said, “So, it is within the anticipated range.”
Still, markets remain volatile, some analysts said, because of uncertainty in the long term over the pace of global economic growth.
Ruben Sukatendel, a fund manager at BNI Asset Management, said there was potential for the JCI to open lower because of continuing concern over the financial crisis in Europe the slowdown in US growth.
“My clients are steered into mixed portfolios and we are also advising them to invest in bonds,” he said. “Index and stocks valuations are rather high already.”
BNI Asset Management manages more than Rp 5 trillion ($585 million) in as sets.
Source :
Jakarta Globe, 02 September 2012
http://www.thejakartaglobe.com/business/strong-showing-likely-as-trading-resumes/463089
“Regional markets were up by an average of 2.5 percent this week, so there is a good chance that the Jakarta Composite Index is set to open higher on Monday,” said Edwin Sebayang, head of research at the Jakarta-based MNC Securities.
The Hang Seng index in Hong Kong lost 1.8 percent on Friday but was up 3.2 percent for the week. The Nikkei 225 average in Japan dropped 1.2 for the day but had gained 1.7 percent in five days.
The JCI closed down 0.1 percent at 3,841.73 on Aug. 26, the latest day of trading and was little changed for the week.
Investors were monitoring the latest US employment report for signs of the state of the nation’s economy.
The government reported that in August, the unemployment rate was steady at 9.1 percent, suggesting that the US economy was at risk of slipping back into recession. Still, non-farm payrolls were unchanged in August after an 85,000 jobs gain in July.
The Dow Jones industrial average opened down 1.2 percent on Friday after rising 1.9 percent at the start of the week to Thursday.
Edwin said that global markets are starting to stabilize as US economic data showed the country was not stumbling into a recession.
“Economic indicators show that the US is actually far from recession, the economy was just slowing down,” he said.
He pointed to manufacturing activity, with the sector’s ISM index dipping to 50.6 in August compared to 50.9 in July — significantly higher than the consensus expectation of 48.5.
On Thursday, US weekly jobless claims were 409,000, slightly l ower than forecast of 410,000.
Edwin said that the market was also anticipating more stimulus from the Federal Reserve to spur the US economy.
The Fed was discussing a more aggressive rate policy to stimulate economic growth as well as a policy “linking rates to path of jobless rate,” Reuters reported on Wednesday.
Harry Su, head of research at state brokerage firm Bahana Securities, said the Indonesian market would take its cue from Asian markets’ openings on Monday morning. He was optimistic that this week’s positive sentiment would last through next week.
“Despite today’s [Friday] lackluster performance, regional markets were still positive for the week, and I think the Indonesian market should rise in tandem,” Harry said.
He added that he expected investors to see Indonesia, with its strong macroeconomy and limited reliance on exports, as a safe haven should the external volatility continue.
He recommended investors buy shares in domestic-oriented stocks such as banks, consumer goods and property developers.
The market is also anticipating Monday’s release by the Central Statistics Agency’s (BPS) of inflation data for August. The median estimate of five economists surveyed by the Jakarta Globe showed the consumer price index rising 4.74 percent.
In July, the inflation rate was 4.61 percent, with the month-on-month rate at 0.67 percent.
“Inflation doesn’t seem to be a threat because the month-on-month inflation is predicted to be between 0.75 percent and 1 percent,” Edwin said, “So, it is within the anticipated range.”
Still, markets remain volatile, some analysts said, because of uncertainty in the long term over the pace of global economic growth.
Ruben Sukatendel, a fund manager at BNI Asset Management, said there was potential for the JCI to open lower because of continuing concern over the financial crisis in Europe the slowdown in US growth.
“My clients are steered into mixed portfolios and we are also advising them to invest in bonds,” he said. “Index and stocks valuations are rather high already.”
BNI Asset Management manages more than Rp 5 trillion ($585 million) in as sets.
Source :
Jakarta Globe, 02 September 2012
http://www.thejakartaglobe.com/business/strong-showing-likely-as-trading-resumes/463089
Analysts: Indonesia Fundamentals Good But Beware World Market Volatility
Investors should refrain from making big bets on Indonesia’s stock
market anytime soon because of recent volatility and concerns that the
United States and Europe will force a global economic slowdown, analysts
and fund managers say.
“My advice is not to enter the market in the next one or two days. It is still very volatile. It could go up tomorrow but fall the next day,” said Adrian Rusmana, research director at Sucorinvest Central Gani.
Concerns that the financial crisis may have spread to Spain and Italy combined with news of the US credit rating downgrade continued to shake the Indonesia Stock Exchange on Monday, following Friday’s big decline.
On Monday the Jakarta Composite Index fell as much as 5.3 percent, before paring its loss to 1.8 percent. Just a week ago, the benchmark had closed at a record high.
Ruben Sukatendel, a fund manager at BNI Asset Management, is confident that there was still upside potential in Indonesia’s market, but he would not recommend entering the market immediately.
“We keep monitoring the market, but we are still in ‘wait-and-see’ mode,” he said. Fund managers are likely to keep their assets in cash before entering the market when the time is right, he said.
“Bond prices are still relatively expensive in Indonesia, and the market is not liquid. We don’t want our money to be bound up in the bond market and miss any momentum in the equity market,” said Ruben, who helps manage Rp 5 trillion in assets.
Ruben said BNI Asset Management is planning to buy into the equity market by the end of the week as prices look cheap. It could use 20 percent to 30 percent of its idle cash to buy stocks, he said.
Investors may get some guidance today, when Bank Indonesia meets for its monthly policy meeting.
Strong corporate profit, economic growth and stable interest rates are fundamental factors that may help to keep share prices from declining further.
The central bank is likely to keep its key interest rate unchanged, according to seven economists polled by the Jakarta Globe. It last tightened monetary policy back in February.
Bagus Hananto, head researcher at Onix Capital, said there are still opportunities to gain in Indonesia, especially with its stable economy as a support.
Kim Eng Securities Indonesia shared a similar view in its note to its clients on Monday, saying that despite “temporary turbulence”, the index is likely to rebound.
“For those with an investment horizon of over six months, we think there is opportunity for bottom fishing in the Indonesian market,” it said. “The country continues to show strong fundamentals and it is not too dependent on exports, making it relatively shielded from any global economy slowdown.”
The broker said that consumer goods, banking and the property sector remain attractive and warned against commodity and export-oriented stocks.
Source :
Jakarta Globe, 08 Agustus 2011
http://www.thejakartaglobe.com/business/analysts-indonesia-fundamentals-good-but-beware-world-market-volatility/458033
“My advice is not to enter the market in the next one or two days. It is still very volatile. It could go up tomorrow but fall the next day,” said Adrian Rusmana, research director at Sucorinvest Central Gani.
Concerns that the financial crisis may have spread to Spain and Italy combined with news of the US credit rating downgrade continued to shake the Indonesia Stock Exchange on Monday, following Friday’s big decline.
On Monday the Jakarta Composite Index fell as much as 5.3 percent, before paring its loss to 1.8 percent. Just a week ago, the benchmark had closed at a record high.
Ruben Sukatendel, a fund manager at BNI Asset Management, is confident that there was still upside potential in Indonesia’s market, but he would not recommend entering the market immediately.
“We keep monitoring the market, but we are still in ‘wait-and-see’ mode,” he said. Fund managers are likely to keep their assets in cash before entering the market when the time is right, he said.
“Bond prices are still relatively expensive in Indonesia, and the market is not liquid. We don’t want our money to be bound up in the bond market and miss any momentum in the equity market,” said Ruben, who helps manage Rp 5 trillion in assets.
Ruben said BNI Asset Management is planning to buy into the equity market by the end of the week as prices look cheap. It could use 20 percent to 30 percent of its idle cash to buy stocks, he said.
Investors may get some guidance today, when Bank Indonesia meets for its monthly policy meeting.
Strong corporate profit, economic growth and stable interest rates are fundamental factors that may help to keep share prices from declining further.
The central bank is likely to keep its key interest rate unchanged, according to seven economists polled by the Jakarta Globe. It last tightened monetary policy back in February.
Bagus Hananto, head researcher at Onix Capital, said there are still opportunities to gain in Indonesia, especially with its stable economy as a support.
Kim Eng Securities Indonesia shared a similar view in its note to its clients on Monday, saying that despite “temporary turbulence”, the index is likely to rebound.
“For those with an investment horizon of over six months, we think there is opportunity for bottom fishing in the Indonesian market,” it said. “The country continues to show strong fundamentals and it is not too dependent on exports, making it relatively shielded from any global economy slowdown.”
The broker said that consumer goods, banking and the property sector remain attractive and warned against commodity and export-oriented stocks.
Source :
Jakarta Globe, 08 Agustus 2011
http://www.thejakartaglobe.com/business/analysts-indonesia-fundamentals-good-but-beware-world-market-volatility/458033
Langganan:
Postingan (Atom)