Daily 12 April 2013
BI Policy Review
No rate hike despite uptick in inflation

  • Bank Indonesia decided to hold its policy rate (the BI rate) steady at 5.75% in Apr 2013 (the fourteenth consecutive month it has done so since Feb 2012). The decision is in line with our and consensus expectations. The interest rate is assessed to be consistent with the inflation target of 4.5% +/- 1% in 2013 and 2014. Bank Indonesia seeks to strengthen its monetary operations by absorbing excess liquidity in order to suppress short-run inflationary pressure. It will also continue to maintain the stability of the exchange rate in accordance with fundamentals, and encourage the creation of a more efficient foreign exchange market. Bank Indonesia is looking to boost policy coordination with the government to manage a worsening current account position and minimise potentially volatile food inflation. Given the uncertain global economic outlook and the fact that core inflation remains subdued, we expect interest rates to be unchanged at 5.75% for the rest of 2013. However, if the government raises fuel prices in the near future, Bank Indonesia is expected to increase the BI rate by 25- 50bps. It would likely raise the BI rate by 25bps if the government implements restrictions on the use of subsidised fuel.

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Banking ; Neutral
How banks started 2013

  • According to data from Bank Indonesia, the country's banking sector booked 23.4% YoY loan growth (to IDR2,736t) and 16.0% YoY deposit growth (to IDR3,207t) by February 2013, which translate into 3.6% YoY net profit growth (to IDR16.1t). We look at how the individual bank began 2013. According to the January data, some banks showed a slow start in YoY earnings formation. These include Bank Negara Indonesia (BBNI.IJ), Bank Tabungan Negara (BBTN.IJ), Bank Danamon (BDMN.IJ), and Bank BJB (BJBR.IJ).

Other Local News
Bumi Serpong Damai (BSDE.IJ, Not Rated): 1Q13 marketing sales reached IDR2.6t
Bumi Serpong Damai's (BSDE) 1Q13 marketing sales has achieved IDR2.6t, up by 214% YoY compare to the same period last year (1Q12: IDR828b). This figure has reached 37% of company's FY target of IDR7t. The 1Q13 marketing sales is contributed by the sale of land plots (77%), followed by residential houses (20%), and commercial products (4%).In addition, BSDE has acquired 14ha commercial land in Manado, North Sulawesi and plan to develop commercial projects in the area. Recall that BSDE through its subsidiary, PT Sentra Talenta Utama (99% ownership), acquired 51% stakes in PT Duta Dharma Sinarmas which previously owned the land in Manado.

Astra Otoparts (AUTO.IJ, Not Rated): Rights issue update
Astra Otoparts (AUTO.IJ) will conduct right issue I of 936.9m shares from previously target of 1.4b shares. It is reported that ratio is decided 100 old shares to get rights 25 new shares. The offer price at IDR3,100 per shares. Proceeds will be used 74.9% for debt repayment, and 26% to enhance capital. Rights Issue plan will be proposed to EGM on 17 April 2013. Effective statement from market regulator (OJK) (tentative): 16 April 2013. Cum date (tentative): 24 April 2013, Recording date (tentative) : 29 April 2013, trading date (tentative): 1 May -7 May 2013.

Indofarma (INAF.IJ, Not Rated): New CEO for Indofarma
State-owned Indofarma's AGM yesterday appointed Elviano Razaldi, the previous marketing director of the company, as CEO to replace Djakfarudin Yunus. The decision might be related to the Minister of SOE's complaint that the merger between Indofarma and Kimia Farma has met resistance from some members of the BoD in these companies. The new CEO expects Indofarma to book 22% YoY revenue growth to IDR1.4t and 95% YoY surge in net profit to IDR83b in 2013. This implies 2013F PER of 11.8x for the stock.
Lippo Karawaci LPKR15.728.90.6
Vale IndonesiaINCO21.935.94.3
Wijaya KaryaWIKA3.527.80.8
Jasa MargaJSMR7.926.71.3
Astra Graphia ASGR17.414.33.6
Malindo Feedmill MAIN28.415.20.9
Modernland MDLN17.624.5na
Semen IndonesiaSMGR1221.81.9
Ekspress TransindoTAXI31.621.3na
Bank Danamon BDMN1214.91.7
Nippon Indosari ROTI-29.948.90.5
Surya Citra Media SCMA-45290.9


Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
BUY Total return is expected to be above 10% in the next 12 months,
HOLD Total return is expected to be between -10% to 10% in the next 12 months,
SELL Total return is expected to be below -10% in the next 12 months.

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