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| Buy Indonesia's Bumi resources, Alam Sutera, Danareksa says |
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09-JAN-2010 Intellasia | Bloomberg |
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9 Jan, 2010 - 7:00:00 AM |
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Indonesia's mining stocks such as PT Bumi Resources may rise as commodity prices advance, and investors should buy property developers for gains from low borrowing costs, PT Danareksa Sekuritas said.
Coal, nickel and tin prices will probably rise as the global economy recovers from a recession, said Metty Fauziah Wardhani, a mining analyst at Danareksa Sekuritas, the best Indonesian brokerage in 2009, according to an Asiamoney magazine poll. Lower mortgage rates and infrastructure development may boost developers including PT Alam Sutera Realty, Danareksa's Lydia Suwandi said.
The Jakarta Composite index rose 87 percent last year, making it Asia's second-best performer. Shares of Bumi more than doubled in 2009 after a 78 percent gain in oil prices improved the outlook for alternative fuels. Goldman Sachs JBWere Pty on January 7 raised its spot price forecasts for thermal coal to $86 a metric tonne on stronger demand from China and other buyers.
"I'm upbeat on nickel as there appears to be excess demand for the metal this year," Wardhani said. "Tin may rise on demand from electronics producers."
Wardhani recommends buying PT International Nickel Indonesia, the nation's biggest producer of the metal, and PT Timah, the nation's largest tin mining company.
Alam Sutera
Property developer Alam Sutera may extend last year's 110 percent gain after the government opened access to a toll road from the area of the company's housing project in Serpong, West Java, boosting transport links to Jakarta, said Danareksa's property analyst Suwandi.
"Infrastructure spending will be the catalyst for property stocks this year," Suwandi said.
Indonesia is building more roads, bridges and power plants to sustain economic growth, which Bank Indonesia forecasts at as much as 5.5 percent this year. President Susilo Bambang Yudhoyono pledged to double infrastructure spending to as much as $140 million in his second five-year term until 2014. The economy may expand 6.6 percent on average over the next five years, Yudhoyono said on January 6.
A drop in mortgage rates may also lift property sales, Suwandi added. Bank Indonesia cut its benchmark interest rate to a record low of 6.5 percent in August 2009, making housing loans more affordable. Slower-than-expected inflation in December widened the scope for the central bank to delay raising rates.
Suwandi also likes PT Summarecon Agung and PT Ciputra Development, Indonesia's third-biggest property developer.
http://www.businessweek.com/news/2010-01-07/buy-indonesia-s-bumi-resources-alam-sutera-danareksa-says.html
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