Shares of Indonesia's state-controlled mining company PT Tambang Bukit Asam rose as much as 8.62 percent on Monday after it was reported that the company would raise its stake in subsidiary Bukit Asam Transpacific Railway.
Rajawali Group, an Indonesian holding company, is ready to sell its 40 percent stake in PT Bukit Asam Transpacific Railway (BATR) to Bukit Asam, Rajawali managing director told local newspaper Investor Daily.
The coal firm currently owns 10 percent of Bukit Asam Transpacific Railways, a logistics and transportation company based in Sumatra that it acquired in August 2008, according to Bukit Asam's first-half financial statement.
"It will be a positive sentiment for PTBA future performance if it can get more ownership of the 307 km railway project (since the railways will provide coal hauling from PTBA's concession)," IndoPremier Equity Research said in a note.
"From the equity financing part, PTBA, under the new proposal, may need to provide US$250m for the project, which we believe should not be a problem for PTBA."
The stock was trading 6 percent up at 16,600 rupiah, with 15.67 million shares traded, the fifth highest turnover, while the broader Jakarta Composite Index was up 0.10 percent.
1425 (0725 GMT) (Reporting by Andjarsari Paramaditha in Jakarta)
**************************************************************** 11:34 STOCKS NEWS INDONESIA-CIMB sees ROE rebound in plantation sector next year
CIMB Research said it expects the plantation sector's return on equity to hit bottom this year before recovering in 2013, despite a flat crude palm oil (CPO) price assumption.
"ROE dips in 2012 due to lower price and higher cost. Cost normalisation and higher output should lift the average ROE by 4% pts in 2013," CIMB wrote in a note on Monday.
The research house said ROE seems to be a better determinant of medium-term valuation levels compared to CPO price movement and keeping the sector's rating as 'overweight'.
"ROE recovery despite our flattish CPO price outlook makes the sector an attractive medium-term investment given its historical medium-term correlation with ROE. However, CPO price remains a short-term catalyst for the sector. We continue to advocate collecting Indonesian planters in anticipation of a likely CPO price rally," the note said.
CIMB's said its top pick in the sector is PT Astra Agro Lestari. It said the company would be the biggest winner for its pure play and because it has the highest earnings sensitivity, ample liquidity, sound corporate governance and solid production growth.
Astra Agro's shares were down 2.17 percent at 22,500 rupiah while the broader index was up 0.18 percent.
1126 (0526 GMT) (Reporting by Andjarsari Paramaditha)