Indonesia Market Summaries 12 July 2013

• PT Borneo Lumbung Energi & Metal Tbk (BORN, Rp330) agreed to separate with Group Bakrie. BORN affiliated companies namely Ravenwood Pte Ltd has signed an agreement to buy a 23.8% Group Bakrie stake in Bumi Plc for U.S. $ 223 million.
  
  BORN will then increase its stake in Bumi Plc to 47.6% through the purchase of shares of Ravenwood. In addition, BORN will also continue to reduce its debt by some means. (Bisnis Indonesia)
• Dry ports of PT Kawasan Industri Jababeka Tbk (KIJA, Rp320) expects to serve as many as 100 corporate customers by the end of this year from the current position that has 18 companies.
  
  Dry port operator PT Cikarang Dry Port (CDP) is also targeting 30,000 units of container flows equivalent size of twenty-foot equivalent units (TEU), of a total capacity of 400,000 TEU. CDP also plans to expand its area so as to increase profits 10% this year. (Kontan)
• PT Lippo Karawaci Tbk (LPKR, Rp1.130) will build a superblock Embarcadero in Bintaro area. Construction will begin in September-October and will continue for the next 3 years with an investment of Rp2,2 billion on 260,000 square meters area.
  
  The area will include a shopping center, four condominium towers with a capacity of 650 rooms, Siloam Hospital with capacity of 300 bed, Pelita Harapan international school, and family club. (Investor Daily)

Indonesia Market Summaries 4 June 2013

DBS agrees to extend purchase deadline to 1 August 2013

DBS Group Holdings agrees to extend the deadline with Temasek for the purchase of 40% stake in Bank Danamon by 1 August 2013, two-months extension. This is the second time the acquisition deal deadline is extended. Comment: By regulation, DBS can only take up to 40% stake in Danamon and will have to wait for at least one and a half years before asking from the central bank to acquire more stake, providing they pass the GCG and financial condition/health status. We believe the group needs to wait for the MAS decision on reciprocal agreement between Singapore and Indonesia to open the banking industry to foreign banks, which will enable Indonesian state banks to open branches in the city-state country. Meanwhile the minority investment in Bank Danamon will lower DBS’ CAR under the Basel III accord.

Jababeka (KIJA IJ) partners with Plaza Indonesia (PLIN IJ) on mixed used development

Through its subsidiary, PT Grahabuana Cikarang, KIJA partners with PLIN in developing a mixed used for the mid-to-upper class costing approximately Rp4tn. The two companies will create JV companies PT Jababeka Plaza Indonesia (Ownership: 30% PLIN, 70% KIJA) and PT Plaza Indonesia Jababeka (Ownership: 70% PLIN, 30% KIJA) where the former will develop 4ha for residential and the latter develop 12ha for mall, hotel, and office. Funding will come from internal cash and bank loans. KIJA expects the project to take 6 years to complete since groundbreaking, which is expected to be next year. (Bisnis Indonesia)

Bakrie Toll Road sold for Rp140bn

ELTY managed to sell PT Bakrie Toll Road for Rp140bn to PT Karya Prima Investama on May 27. The proceeds will mostly be used to pay down debt. (Bisnis Indonesia)

Erajaya Swasembada revealed key dates on dividend payment

Erajaya Swasembada (ERAA) sets the cum and ex date for the dividend payment on June 25 and 26, while payment would be made on June 28. At the current price, its Rp60/share dividend payment (40% payout) gives a 1.8% yield.
for Indonesia Market summaries 4 June 2013

Property Sectors April 10 2013

Ciputra Property acquired 7.2ha land in Puri, West Jakarta

It was announced in the local news today for Indonesia Market Summaries that CTRP has completed the acquisition of 7.2ha land in Puri, West Jakarta with a transaction value reaching Rp1tn or Rp15mn/sqm. The company has yet to disclose the planned project in the area or its cost, but they will most likely build a high rise project. (Investor Daily)

Comments: Land ASP in Puri Indah is approximately Rp17-20mn/sqm, thus, the deal in our view is a good one for CTRP as the company is paying at a discount.

Kawasan Jababeka to diversify more into residential and commercial projects

Through its subsidiary, PT Graha Buana Cikarang, KIJA is planning to be more aggressive in developing residential and commercial projects. KIJA will allocate 600ha out of 5,600ha for their residential and commercial projects. The company just launched their Beverly Hills cluster, which is a homestay concept project, last month with an ASP of Rp2.3bn where one unit has 11 rooms. The cluster is currently sold out, but KIJA will launch its second phase this month with an ASP of Rp2.3-3.0bn. This year, KIJA expects revenue from residential and commercial to be more than half of the company’s total revenue last year of Rp1.4tn. (Kontan)

Super luxurious property ownership by foreigners is expected to be allowed

Property ownership by foreigners in Indonesia is starting to get attention from the government as regulation revisions regarding it is starting to be discussed. The Indonesia Market Summaries noted that The Public Housing Ministry (Kempera) suggested three revisions to the regulation:

1. Flats ownerships are limited to 750sqm in size and at least Rp5bn in value;
2. For landed housing, an area of at least 400sqm and value of at least Rp10bn;
3. Ownership timeframe to be changed from 25 years to at most 50-60 years. Therefore, only the premium apartments and landed housing are allowed to be owned by foreigners. (Kontan)

KIJA targets Rp 1,32 trillion recurring income

KIJA targets Rp 1.32tn recurring income

Kawasan Jababeka expects a 349% increase of recurring income to Rp1.32tn this year coming mostly from their new power plant business, which they expect to contribute around Rp1tn. Aside from their power plant, KIJA is also expecting recurring income from their dry port and other services. The company expects contribution from their dry port to grow by 285% this year. In 1Q13, KIJA claimed that they have already earned Rp300bn marketing sales out of their full year target of Rp1.2-1.5tn. (Kontan)