KEPERCAYAAN KONSUMEN

Company Update: TBIG
October 20, 2014 13:43 WIB

We raise our TP on Tower Bersama Infrastructure (TBIG) to IDR6,600 from IDR6,350 previously to factor in its acquisition of Mitratel via share swap. The acquisition will allow TBIG to grow faster given Mitratel’s towers’ low tenancy ratio and an increase in ability to assume more debt due to larger equity base . We expect EBITDA growth to accelerate to a CAGR of 34% in the next two years from our previous expectation of a CAGR of 25%. Nevertheless, there will be EPS-dilution from the increase in number of shares, minority interests, and interest expense from rising gearing level. That said, we cut our EPS estimate on TBIG by 17% in 2015  and 2016. We maintain SELL on the counter as the stock remain expensive compared to TOWR, trading at FY15F EV/EBITDA of 14.7x vis-à-vis TOWR’s of 12.4x.
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TRADE OUTLOOK

Trade Outlook September 2014
September 29, 2014 11:05 WIB

Total exports in July dropped 8.0 percent MoM, or down 6.0 percent YoY to US$ 14.2 bn. Compared to a month earlier, the decline in exports stemmed from 8.6 percent lower oil and gas exports and 7.9 percent lower non oil and gas exports. Furthermore, 2.9 percent lower export volume and 5.2 percent lower average aggregate prices also contributed to the slump in July exports.

The exports of two major products - which accounted for 29.5 percent of non oil and gas exports – rose slightly in July. Exports of animal and vegetable fats (HS 15) and mineral fuels (HS 27) rose by 1.7 percent and 0.8 percent, respectively. However, the exports value of other non oil and gas products, such as electrical machinery and rubber products tended to decline.

On a monthly comparison, non oil and gas exports to Indonesia’s major trading partners recorded a decline. Shipments to China and Japan weakened by 10.8 percent and 8.4 percent, respectively, while non oil and gas exports to the U.S. fell by 7.6 percent MoM.

The volume of July’s imports fell significantly by 10.2 percent, while the average aggregate prices slipped 0.3 percent. As result, the value of imports slumped 10.5 percent MoM, or 19.3 percent YoY to US$ 14.0 bn. Non oil and gas imports were down by 19.5 percent although oil and gas imports, by contrast, still grew 22.4 percent MoM. By product type, the imports of mechanical machinery and equipment (HS 84) sank 21.3 percent while imports of electrical machinery and equipment (HS 85) declined 13.3 percent.

Non oil and gas imports from Japan and China declined 12.7 percent and 19.3 percent, respectively, while shipments from Singapore still increased (+2.8 percent).

By classification, imports of all types of goods fell. Imports of consumer goods showed the largest decline (-27.3 percent), followed by imports of capital goods (-18.0 percent) and imports of raw materials (-7.2 percent). In the January-July period, imports of raw materials accounted for 76.8 percent of Indonesia’s total imports.

In contrast to June’s deficit, Indonesia recorded a trade surplus of US$ 123.7 mn in July. The surplus owed to a larger drop in imports than exports. In the first 7 months of 2014, Indonesia’s trade deficit reached US$ 1.0 bn, yet far lower than the deficit of US$ 5.7 bn recorded in the corresponding period of last year.

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CPI & SBI OUTLOOK

CPI & SBI Outlook September 2014
September 29, 2014 10:54 WIB

Inflationary pressures eased in August. The MoM inflation rate reached 0.47 percent, or lower than July’s 0.93 percent. Compared to August last year, inflation reached 3.99 percent. This is lower than July’s YoY inflation rate of 4.53 percent. Cumulatively, in the first 8 months of the year, headline inflation reached 3.42 percent, or far lower than the 7.49 percent recorded in the corresponding period of last year.

Price increases in most CPI components moderated compared to last month. The education component rose the most (+1.58 percent MoM), followed by the housing component (+0.73 percent), the prepared foods components (+0.52 percent), the foodstuffs component (+0.36 percent), the medical care component (+0.33 percent), and the clothing component (+0.23 percent). By contrast, prices in the transportation component fell 0.12 percent. Further increases in educational costs reflected the start of the new academic year which began in the July- September period. Inflationary pressures in other components of the CPI normalized following Ramadan and the Idul Fitri holidays.

For September, we don’t expect prices in the foodstuffs and prepared food components to show significant increases. Furthermore, prices in the education component will also tend to normalize as the new academic year is already underway. Against this backdrop, we predict inflation of 0.40 percent MoM, translating into YoY inflation of 4.66 percent.

Bank Indonesia held its benchmark policy rate at 7.5 percent, with the Lending Facility and Deposit Facility rates also kept unchanged at 7.50 percent and 5.75 percent, respectively. The outlook for inflation and the current account deficit will remain the major factors influencing central bank policy in the near term. Hence, we predict that the BI rate will stay at its current level going forward.

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Forecast For August 2014

Exports US$ 14.10 bn
Imports US$ 13.60 bn
Trade Balance US$ 461.80 bn


Forecast for 2014

Exports US$ 196.40 bn
Imports US$ 192.30 bn
Trade Balance US$ 4.10 bn

DRI Forecast for September 2014

Inflation
MoM(%) 0.40
YoY(%) 4.66

SBI
End of period(% p.a) 7.50

Forecast for 2014

Inflation(%) 5.53
SBI(% p.a) 7.50