June 21, 2013 / 8:56 AM / 4 years ago

STOCKS NEWS INDONESIA-Bahana cuts Wintermar to 'hold'

Bahana Securities downgraded shipping company PT Wintermar Offshore Marine Tbk to “hold” from “buy”, saying the impact on business from a recent boat incident could hurt net profit by 10.7 percent to 5.6 percent over the next two years.

“As we alter our 2013-14 forecasts, we lower our DCF-based target price to 600 rupiah from 630 and cut our recommendation from buy to hold, particularly as the stock has outperformed the market,” Bahana said in a note on Friday.

Wintermar reported an accident on a fishing vessel last week, which caused the deaths of fishermen and as a result, the company was not allowed by the Special Forces for Upstream Oil & Gas Industry (SKK Migas) to bid for new contract tenders for the next 12 months and is to relinquish all current ones.

However, the research house recommended investors to accumulate on weakness and remained positive on Wintermar’s longer term outlook due to the Indonesian cabotage law, under which only vessels with the Indonesian flag can be used for domestic transport, and its first-mover advantage in the oil and gas support industry.

Wintermar shares dropped 3.7 percent to 520 rupiah. The broader index was up 1.7 percent.

1520 (0820 GMT) (Reporting by Andjarsari Paramaditha; Editing by Prateek Chatterjee)

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