BUY BANKING
2008/11/12, Yuliawati tan <[EMAIL PROTECTED]>:
>
> moga2 berguna ya
>
>
>
>
> Good morning. Tough times call for Heroes. Spiderman has heard the call
> and is on the move. Our very own Indonesian wall-crawler will climb up and
> down the walls of the building CLSA Indonesia is housed in (GKBI Tower).
> 'Spidy' Alain Robert is famous for climbing up the outside wall of many high
> rise buildings around the world, often without any safety equipment or
> climbing aids. The climb will take about an hour to complete and a 5 meters
> wide promotional banner will be hung from the building.
>
> Spiderman is not the typical hero. Unlike other heroes, Spiderman gets
> beaten up on a regular basis, is not rich, has girlfriend problems, and
> lives with his grandparents. But the lesson I take from him (especially
> during these trying times) is that he always bounces back.
>
> For now, the bounce will have to wait as signs that the real sector is
> heading for a difficult time is emerging fast. Yesterday, my colleague went
> to a chemical manufacture site visit. The site visit was well attended, so
> well that they had to split it into two groups (For only a US$50 market
> cap!). However, the story is bleak with outlook in 2009 weakening quite
> sharply resulting in even more dramatic capex cuts.
>
> "With great power comes responsibility" is what Spidy's grandfather said to
> young Peter Parker. I don't have much power at all, getting whacked around
> by the market. But just like Spidy, I too will get up in the morning and
> hope that things will turn better. (PS. Spidy's appearance has been
> postponed due to technical difficulties today to an unspecified date, slight
> setback - slight setback, nothing that Spidy hasn't seen before!)
>
>
> *Research Today: *
>
> *Nicolaos Oentung cut his earnings forecast for Indo banks for the second
> time this month. Banks in general have provided more than required and
> hence have cushion to protect their earnings in a downturn. However, he cut
> our bank earnings in 09-10 by 5-8% mainly reflecting a more conservative
> stance that banks continue to maintain cushion in their reserves despite
> weaker credit environment. Overall, we still expect banks to generate
> low-teens EPS growth in 09-10. Banks that dominate in funding are our
> preferred picks – BCA and BRI.*
> * *
> *Major points from the report*
>
> - BI minimum guidelines for setting loan loss reserves are general
> provisions of 1% for current loans (category 1) and specific provisions
> ranging from 5-100% for classified loans (category 2-5) after deducting
> collateral value.
> - BRI has the largest excess reserves followed by Mandiri, BCA, and
> Danamon.
> - We can safely use the word "excess" for BRI and BCA as their actual
> historical loss experience excluding 1998 crisis has been far below the
> loss
> rates used to calculate the loan loss reserves.
> - We now expect banks to generate 8-14% earnings growth in 09-10
> despite severe asset quality deterioration with NPL up by 50-64% and credit
> costs up by 62-122%.
> - Banks that dominate in funding with conservative provisioning
> policies remain our preferred pick – *BCA and BRI*.
>
>
>
>
> *News Headlines/Others:*
>
> *Forex buyers data to be given to tax authorities*. Buying US$ more than
> US$10k will require the buyers to submit the tax numbers now. And this data
> might be passed on to the tax office. Intention is to discourage buyers of
> US$, especially for those who can buy massive amount of US$ but don't pay
> much income tax. Rupiah now weakened 1.5% at 11,450.
> * *
> *Tax offices will encourage greater tax compliance to deal with slowing
> economy*. Director General of taxation is quoted as saying that there is
> risk of not achieving the tax revenue target next year, as the GDP growth
> might slow. To deal with this, the tax office is profiling taxpayers and
> encourage greater compliance, including boosting the numbers of taxpayers
> (only 6mn now). Ytd, tax collection has been encouraging. Between Jan and
> Oct, the office received Rp463tn in revenue, a 43% increase YTD, or 86%.8%
> of the total tax revenue expected in the revised 2008 state budget.
>
> *MSCI: changes in Asia index effective Nov 25*. For Indonesia weighting
> goes from 0.81% to 0.82% (a +1.1% change) and added is *LPKR* and deleted
> are *INKP*, *TRUB*.
>
> *Indosat (ISAT IJ) tender offer update*. Q-Tel indicating they are still
> sticking to 6416/sh tender offer price and waiting for the Regulators
> approval (or not).
>
> *Bukit Asam (PTBA IJ) may not participate in BUMI deal after all*. Citing
> falling BUMI share prices as a reason, local media reported that the
> minister for SOE saying that if the share price continues to head south,
> PTBA might not be able to participate in the BUMI bid.
>
> *Politics: Partai Demokrat and PAN candidate wins by slim margin in East
> Java governor race*. Soekarwo and Saifullah were nominated by President
> SBY's Partai Demokrat and Indo's 6th largest political party PAN. The
> other candidate was nominated by PPP (3th largest party) and PDIP.
>
> *Indonesia to rehab 1mn ha CPO plantation?* To help supporting CPO prices,
> Indo CPO plantation association said that 1mn ha of CPO plantation will be
> replanted, which in effect will cut supply. Previously, Indonesia and
> Malaysia agreed on a replanting program covering a total of 300,000 hectares
> of oil palm trees from both countries. The problem is that replanting
> program costs money and not sure banks will lend the money now.
>
> *Regulator to issue new regulation on repo in 2009?* Local media reported
> that Indo capital market regulator will issue regulation on repo soon. Maybe
> end of this year or early next year at the earliest.
>
> *Economics Release *
> *Indonesian cement: Sales volume 10M08 up 14% YoY with concern on next
> year's demand (from Hadi)*
> Sales volume in 10M08 has reached 31.7m tonnes or up 14% compared to same
> period last year. As for the month of October 2008, the industry booked 3.1m
> tonnes sales volume or 24% higher compared to Oct 2007 taking effect from
> the Muslim Holiday.
> *Indonesia cement* *Domestic sales volume ('000 tonnes)*
> *10M08*
> *10M07*
> *change*
> *Oct 08*
> *Oct 07*
> *change*
> Indonesia 31,697
> 27,707
> 14%
> 3,106
> 2,498
> 24%
> Semen Gresik SMGR.IJ 13,748
> 12,335
> 11%
> 1,378
> 1,088
> 27%
> Indocement INTP.IJ 10,229
> 8,494
> 20%
> 934
> 749
> 25%
> Holcim Inconesia SMCB.IJ 4,501
> 3,988
> 13%
> 436
> 381
> 15%
> Source: ICA, CLSA Asia-Pacific Markets
>
> Cement selling volume has been growing steadily the past five years (Yearly
> average CAGR of 6.7%). Ex-Java contribution has increased from 40% to 46%
> as following growing farmer's wealth; while Jakarta has also growing on the
> back of major property development. Hence we expect next year's cement
> demand to soften due to falling rural income and deferred major
> property-infrastructure projects. We are reviewing our cement sector
> forecast.
>
>
> *Key Indicators:*
>
> JCI: 1,336.56 -4.12 (-0.31%), T/O USD 117.05 mil, YTD: -51.32%
>
> *ADR: *
> TLKM US$21.24 = IDR6,014
> ISAT US$21.82 = IDR4,942
>
> Consolidation still reigning, with investors' inactivity causing volumes to
> drop to extremely low levels, barely USD 150m on the day these days.
>
>
> RUPIAH: weaker this morning as there are plans to force reporting to the
> tax office every purchase of FX in excess of USD 10,000. I guess since
> implementation date not certain yet, many are rushing to buy USD now. This
> will pass, but is causing a short-term spike. Rupiah now at 11,675.
>
>
>
> *Chart of the Day: SBI issuance*
>
> As of June 08, foreigners make up Rp60tn or 40% of total SBI issuance. In
> Nov, foreigners make up only Rp2tn of the SBI issuance. SBI is the
> Indonesian version of US T-Bill. Since foreigners also participate in SBI
> issuance, rupiah tends to be volatile as they exit the market. Lower SBI
> issuance should help to reduce rupiah volatility.
>
> *SBI issuance: Jan 07-Nov08*
>
> * *
> * *
> * *
> *Did you know that?*
> Some luxury items and toy assets in Indonesia have seen a slowdown in
> sales. The sales of Harley Davidson bike, one of investment community's
> favourite toys, had declined to 30 units in July, 27 units in August, and
> only 10 units as of Sept 25. We heard that just a few months ago, one has to
> queue to purchase a Harley bike in Jakarta. Now you can buy a Harley and
> immediately take (or ride?) it home. Plus, you can get some discounts too.
> Meantime, some golf stores already reporting declines in sales. Popular Raja
> Golf's store in South Jakarta recorded 10% decline in sales since early
> October.
>
> Best regards, *Wuddy Warsono, CFA*
> CLSA Indonesia | Head of Sales
> Phone: (62-21) 573 9460
> Toll Free - HK: 800 938 000
> Toll Free - SIN: 800 621 1104
> Toll Free - US: 800 460 2581*
> [EMAIL PROTECTED] <[EMAIL PROTECTED]>
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