DJ MARKET TALK:UBS Downgrades Antam,Inco To Neutral, Cuts Targets 0416 GMT [Dow Jones] UBS downgrades PT International Nickel Indonesia (INCO.JK), PT Aneka Tambang (ANTM.JK) to Neutral from Buy, cuts target prices, due to expected industrial production slowdown given higher energy prices, tighter monetary policy in developed, emerging markets.
Cuts life-of-mine DCF-derived price target for Antam to IDR3,250 from IDR4,350; "This follows continued production problems with the company's Ferronickel III smelter" which has suffered leaks and other issues, on top of expected near-term demand slowdown. Cuts life-of-mine DCF-derived price target for Inco to IDR5,800 from IDR7,150; "PT Inco's shares have lost 51% since mid-November 2007 in line with nickel price weakness." Adds, though, "in line with seasonal trends, we believe stainless steel production will regain momentum in 2Q09, which should lead to a sell-down of nickel producer inventory levels, which are currently high, and a rebound in prices." Antam trading unchanged at IDR3,000; Inco at IDR5,250, also unchanged.
