RESEARCH CALLS
* Infrastructure – The land acquisition bill is currently in parliament. We think there’s sufficient support for the bill to be passed before the end of this year. The new law should enable the speeding up the land acquisition process, which has hindered the progress of infrastructure development. The most important reform in the bill, in our view, would be clarity on the procedures and steps in the government’s land acquisition, by allowing land-rights cancellation and limiting the timing of pricing discussion of land acquisition for public use.
* Jasa Marga (JSMR) – Upgrade to Overweight from Underweight, with a new Dec-11 price target of Rp3,600. Raise our FY11E and FY12E earnings by 8%: We change the percentage of tariff hike increase for JSMR from 10% in FY11-12 to 14% in FY11 and 11% in FY12 as we factor in higher inflation.
NEWS HIGHLIGHTS
* Indo bond rating – Indonesia is getting closer to obtaining an investment grade rating, its first since the Asian financial crisis more than a decade ago, after Fitch Ratings raised its outlook to positive from stable. "Indonesia only requires a small step toward investment grade," said Darmin on February 24. (vivanews).
* Inflation – Deputy governor Bank Indonesia Mr.Hartadi told the press that monthly inflation for February may come in under 0.5%. (Investor Daily).
* The government postponing the plan to let gasoline prices go up in Jakarta – ministry of finance Agus Marto told the press that the government will better prepare the fuel subsidy policy before making it effective. The comment follows the early signal by coordinating minister Hatta Rajasa. (Kontan).
* Indika (INDY) – short prospectus out on the local press for the IPO of PT Mitrabahtera Segara Sejati (MBSS), upon which time Indika will acquire a majority (51%) stake in the company. Bookbuilding period 1-15 March, listing on 4 April. Local underwriters are OSK and Mandiri Sekuritas. Up to 9M10, the company reported a net profit of Rp158bn (US$17.5mn). MBSS plans to list 215mn shares or 12.3% to buy 20-30 tug-boats with 1200-2800HP, 270-365 feet barges, and floating crane with capacity of 20-45 thousand tons per day. (Kontan).
* Agung Podomoro Land (APLN) – the company has revised up internal marketing sales target for year 2011 from Rp3trn to Rp4trn. Since IPO, the company has acquired three new projects namely Green Lake, Green Permata Residences (14ha for Rp190bn), and Grand Taruna (40ha for Rp35bn). (Kontan).
* Jasa Marga (JSMR) – the company plans to hike Jakarta-Cikampek toll tariff by between Rp500-2000 on 2 March, following completion of the Cikarang Utama gateway that is expected to cut down travel time by 20 minutes. (Bisnis Indo).
Analysis by: JP Morgan