Indonesia Market Summaries 27 May 2013

Panin Financial - Panin Life Insurance worth USD737m? (PNLF IJ; Rp295; Not rated)

It is reported that  Dai-Ichi Financial will soon close the deal to buy 40% stake in Panin Life Insurance, which is 62.9% owned by Panin Financial Tbk (the other 37.1% is owned by Panin International). Dai-Ichi is likely to pay around Yen30bn (US$295m) for the stake, indicating US$737m value for the whole company, which was has a total assets of Rp4.4tr in March 2013 and equity of Rp458b.

Comment: Using the Yen30b transaction value, the life insurance company is valued at 15x P/BV, well above the acquisition of Sinar Mas Life Insurance by Mitsui Sumitomo Insurance at the estimated 9-10x P/BV in 2011. (Kontan).

Inflation to reach above the 7% threshold this year

The National Development Planning Agency (Bappenas) projected that inflation post-subsidized fuel price increase could hover around 7.2% - 7.8% this year. Officially, the government proposed the lower bound figure of 7.2% in its plan revised budget (RABPN-2013) to the parliament.

for Indonesia Market Summaries 27 May 2013