Indonesia Market Summaries 31 May 2013

Bumi Serpong Damai to pay out Rp262bn dividend

BSDE announced that they will be paying out Rp262bn or Rp15/sh as dividend implying 20% payout ratio. (Bisnis Indonesia) Comments: The dividend payment implies a yield of 0.8%.

Erajaya Swasembada to disburse 40% dividend payout

Erajaya Swasembada (ERAA) at its AGM announced that a 40% dividend payout, higher than our 20% assumption. This translates into Rp174bn of payment or Rp60/share, giving a 1.8% yield at current price. (Company)

Cigarette TV advertisement to be banned

Based on the revision of the draft of regulation no.32/2002 regarding the airing of advertisement, all cigarette advertisements or programs & shows sponsored by cigarette companies that air on TV in Indonesia are to be banned. The regulation will impose a fine to TV stations who air any kind of cigarette advertisements that could reach Rp10bn. In 2012, cigarette producers spent Rp2.5tn on advertisement. (Kontan)

Cigarrette sector : KPI propose to ban cigarette TV advertisement (Under review)

Kontan Daily today reported that Indonesian broadcasting commission (KPI) will propose additional chapter in the revision of the draft of regulation no.32/2002 regarding the airing of advertisement, which all cigarette advertisements or programs & shows sponsored by cigarette companies that air on TV in Indonesia are to be banned. The regulation will impose a fine to TV stations who air any kind of cigarette advertisements that could reach Rp10bn. In 2012, cigarette producers spent Rp2.5tn on advertisement.

Our take: This kind of black campaign has been a prolonged issue in Indonesia cigarette industry which involve some political issue especially near to the election time next year. This is still premature stage and yet we believe the big names will have strong lobby to the government official not to pass the proposal. But if the worse thing happen, it may drive negative sentiment to the sector. And we believe big players like GGRM, RMBA, HMSP and WIIM are likely to survive given their strong equity brand and customer base. Indeed, they may gain more market share in volume as other small players will likely to collapse.

for Indonesia Market Summaries 31 May 2013