Our Comment\r\n\r\nThe Central Jakarta District Court rejected Temasek’s appeal and found it guilty on the antimonopoly violation. Further, the court gave choice for Temasek: 1) to relinquish at least 50% of its shares in both Telkomsel and Indosat or 2) to sell entire stakes in either company within 12 month. On the other hand, the court did not agree with KPPU to lower Telkomsel’s tariff by 15%. On Temasek’s, we believe the case will take time to be settled. There will be a long process of court appeals among the parties involved.\r\n\r\nThe court decision is likely to create negative sentiment to foreign investors. The same goes to the telco sector. The amount of fine involved is relatively small. The big impact rather comes from the uncertainty over ownership, that could create delays in major/strategic decisions such as capex etc. We recommend HOLD for both Telkom and Indosat.\r\n\r\nPresident Yudhoyono plans to issue a new economic package later this month to improve investment climate and stabilizing the macro-economy and financial institutions. Two key issues being highlighted are 1) revision of government decree No. 1/2007 on income tax facilities for investment in certain sectors and regions 2). revision of cost recovery scheme for oil and gas producer, as well as transparency in the revenue and management of the energy and mining sector.\r\n\r\nRicardo Silaen\r\n\r\n \r\n\r\n \r\n\r\nHighlights\r\n\r\n• Arpeni (UND. REVIEW): To acquire 4 vessels of US180m\r\n\r\n• Mandom Indonesia: To conduct rights issue \r\n\r\n• Bhakti Investama: To conduct buy back shares\r\n\r\n• Astra Graphia: DPS=Rp40, yield 7%\r\n\r\n• IPO: Adaro Energy\r\n\r\n• Telco: Court upheld KPPU rulings against Temasek\r\n\r\nFrom our chartist desk\r\n\r\n• JCI: Dow Jones had deep correction, down -0,9% last Friday. We see regional markets are still in negative territory. But, in the short term JCI’s lower line of Bollinger band chart shows positive reversal to try 2384 level. Today’s trading range is between 2328-2350-2362 (supports) and 2384-2394-2416 (resistances) \r\n\r\n• INCO: The share price broke trend line yesterday. Bearish engulfing pattern is signaling a correction. EXIT \r\n\r\n• BBRI: Same pattern (bearish engulfing) like INCO. Moving average (MA-200 days) is strongly to continue downward. EXIT.
Our Comment\r\n\r\nDuring an analyst meeting Truba Alam stated that it has US$900m backlog from EPC projects. This will be recognized in its book in three years. Overall, this time the management provided less bullish figures compared to ones presented at end of FY07. On the positive side, however, we see that the management’s guidance is clearer, more achievable and more convincing. We are revisiting our forecast, recommendation and target price. \r\n\r\nThe government’s planning agency stated that research showed that fuel subsidy is mostly (82%) enjoyed by middle-upper income population, those who can afford to pay more for fuel. Hence, it makes a strong case for subsidy reduction. We see that this is part of the government socialization effort for the upcoming fuel price increase. \r\n\r\nThe US market was up as oil price was slightly down. Asian markets are up this morning. \r\n\r\nKatarina Setiawan\r\n\r\n \r\n\r\n \r\n\r\nHighlights\r\n\r\n• CP Prima: Analyst meeting\r\n\r\n• Truba Alam Manunggal: Analyst meeting\r\n\r\n• Bumi Resources (BUY): Share buyback at max Rp11,600\r\n\r\n• P Gas Negara (BUY): To conduct a stock split in FY08\r\n\r\n• Metrodata: To issue Rp100b bond\r\n\r\n• Economy: Indonesia consumer confidence Index fell 3.1 points\r\n\r\n• Retail sector: Mall owners plan to increase rental rates\r\n\r\nFrom our chartist desk\r\n\r\n• JCI: Dow Jones was up by +1% this morning, mainly due to technical rebound. The JCI chart: Exponential moving average (EMA 26 days) and momentum indicators are still intact, with its 2384-2386, as above test level. Today’s trading range is between 2325-2348-2363 (supports) and 2386-2395-2419 (resistances) \r\n\r\n• BUDI: Strong momentum, and moving average (MA-14 days) indicators. The share price broke up of trend line yesterday. BUY \r\n\r\n• PGAS: Trend line chart is strongly to continue upside. This stock is one of our preference stock. Target price at Rp13850. BUY.