UBS Investment Research added Indonesian cigarette maker PT
Gudang Garam Tbk to its most preferred stock list,
citing the company's ability to raise product prices.
"We think Gudang Garam's ability to raise prices is now
helped by a widening price gap, a potential fix of its product
portfolio and rising minimum wages," UBS wrote in a note on
The research house's top picks included state-owned lender
Bank Negara Indonesia, coal miner Perusahaan Tambang
Bukit Asam, car maker Indomobil Sukses Internasional
and cement producer Semen Gresik.
Its least preferred stocks are consumer retailer Unilever
Indonesia, state-owned lender Bank Mandiri
and coal miner Bumi Resources.
"Bumi Resources' operations reflect operational and
non-operational risk. Operational risks to our earnings forecast
and valuation include fluctuation in coal and oil price, and
operational disruptions which may adversely affect the company's
operation. Non-operational risks include investment strategy
into non-coal business, and changes in government regulations,"
the note added.
The broader Indonesian stock index was up 0.28
1120 (0420 GMT)
(Reporting by Andjarsari Paramaditha, Editing by Sunil Nair)
11:02 STOCKS NEWS INDONESIA-Nomura ups Indocement target price
Nomura Equity Research raised its target price on cement
maker PT Indocement Tunggal Prakarsa Tbk to 26,900
rupiah from 23,400 rupiah and kept its 'buy' recommendation on
higher production volume and improved enterprise value/earnings
before interest taxes depreciation and amortization (EV/EBITDA).
"Despite recent outperformance of the cement sector and
INTP's share price, we still favour the sector, as in our view
the cement sector and INTP will continue to benefit from rising
infrastructure spending and a strong property market," Nomura
analyst Andy Lesmana wrote in a note on Monday.
Given high demand and tight supply, Nomura said it expects
cement companies, including INTP, to raise prices, partly to
pass on the impact of potentially higher operating costs.
"We also expect that additional volume from INTP's new plant,
which INTP expects to complete in 4Q13, to be a catalyst for the
share price," it added
Indocement's selling price has rsien 6.4 percent as of
September, the fastest in the past three years due to strong
demand and tight supply, which helped improve the company's
operating margins and mitigate potential rising operating costs,
the note said.
Shares of the cement firm were down 0.45 percent at 22,300
rupiah, while the broader index was up 0.37 percent.
1045 (0345 GMT)