Reuters: Hot Stocks: STOCKS NEWS INDONESIA-UBS sees tenancy playing key role in tower sector

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STOCKS NEWS INDONESIA-UBS sees tenancy playing key role in tower sector Aug 9th 2012, 05:38 Thu Aug 9, 2012 1:38am EDT UBS Investment Research says it expects tenancy to play a key role in the Indonesian tower sector, and sees an increase in outsourcing by telecom operators to tower companies. "There is a structural shift among operators to outsource to tower companies with tenancies growing at a 39 percent CAGR over 2008-11, a trend we expect will continue in the medium term," UBS wrote in a note on Thursday. UBS said its top pick in the sector is PT Tower Bersama Infrastructure Tbk and raised its price target to 5,700 rupiah from 3,560 rupiah. It also raised its price target on PT Sarana Menara Utama Tbk to 22,600 rupiah from 15,200 rupiah. "Although we like both companies, we think TBIG has a better relationship with operators such as Telkomsel and Indosat. However, TOWR also has a good diversification story, with XL Axiata and Indosat being the new primary customers for its build-to-suit towers," UBS said. By 11:35 a.m. (0535 GMT), both Tower and Sarana shares were unchanged at 3,950 rupiah and 18,200 rupiah per share. The broader index was up 0.77 percent.

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