April 30, 2013 / 8:50 AM / in 5 years

STOCKS NEWS INDONESIA-Citi cuts London Sumatra to 'neutral'

Citi Research cut PT Perusahaan Perkebunan London Sumatra Indonesia Tbk to “neutral” from “buy”, citing the palm plantation company’s disappointing production performance coupled with softer commodity prices.

“Initially, LSIP was one of the more favoured stocks relative to peers on expectations of a faster paced volume growth given young plantation profile and rubber price recovery prices, which should help cushion the negative impact of lower CPO prices. But on both fronts, LSIP had disappointed,” Citi analyst Margarett Go said in a note on Tuesday.

“Given CPO price weakness, we prefer large diversified planters such as Sime Darby given its relative ability to cushion impact of weaker CPO prices with contributions from other divisions and Astra Agro Lestari which has seen encouraging volume trends.”

Citi also lowered its target price on London Sumatra shares to 1,750 rupiah from 2,605, to reflect its earnings downgrade of about 27 percent.

Shares of the company were down 6.59 percent at 1,560 rupiah. The broader index was up 0.08 percent.

1459 (0209 GMT)

(Reporting by Andjarsari Paramaditha in Jakarta, Editing by Anupama Dwivedi)

*************************************************************** 15:15 STOCKS NEWS INDONESIA-Antam cuts 2013 nickel ore production target Indonesia’s second-biggest nickel producer PT Aneka Tambang (Antam) cut its 2013 production target for nickel ore, and said it planned to raise 1 trillion rupiah ($103 million) through a corporate bond issue this year to finance expansion.

The miner now expects to produce 13 million tonnes of nickel ore in 2013, down from its prior forecast of 18.8 million tonnes.

PT Deutsche Securities Indonesia, PT Mandiri Sekuritas and PT Standard Chartered Securities Indonesia will act as the underwriters.

“We are studying two projects in Papua for nickel and gold mines,” Antam’s Chief Executive Tato Miraza told reporters on Tuesday.

Antam’s shares were unchanged at 1,370 rupiah while the Jakarta stock exchange index was up 0.04 percent.

1432 (0732 GMT) ($1 = 9,720.5 rupiah)

Reporting by Fathiya Dahrul,; Editing by Anand Basu

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