Reuters: Hot Stocks: STOCKS NEWS INDONESIA-Kim Eng rates Indonesia second-half outlook 'overweight'

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STOCKS NEWS INDONESIA-Kim Eng rates Indonesia second-half outlook 'overweight' Aug 14th 2012, 05:20 Tue Aug 14, 2012 1:20am EDT Maybank Kim Eng rated Indonesian equity market outlook in the second half of the year 'overweight', saying GDP growth came in strong despite deteriorating exports and budget deficits while market valuations allowed room for potential upside. Strong domestic demand drives the economy while low inflation and interest rates will continue supporting consumption and investment in the second half, the research house said. The country still remains a magnet for foreign direct investment, it added. Maybank Kim Eng analyst Katarina Setiawan said corporate earnings growth in the first half is on track, aided by healthy balance sheets with capex remaining strong to support future earnings growth. "Indonesia's market valuations still allow room for potential upside... We like the Consumer Staples, Financials(Bank and Property sub-sectors) and Utilities (Toll Road sub-sector)sectors. Our stock picks represent domestically-driven names with strong pricing power," Setiawan said in a note on Tuesday. Maybank Kim Eng's preferred picks were PT Indofood CBP Tbk , PT Jasa Marga Tbk, PT Summarecon Agung Tbk , PT Bank Rakyat Indonesia Tbk, PT Alam Sutera Realty Tbk and PT Astra Graphia Tbk By 1202 p.m. (0502 GMT), the Jakarta Infrastructure Index , Jakarta Finance Index and Jakarta Consumer Index were down 1.13 percent, 0.28 percent and 0.09 percent respectively, while the broader Jakarta Composite Index was down 0.26 percent. 1205 (0505 GMT) (Reporting by Andjarsari Paramaditha in Jakarta) **************************************************************** 11:11 STOCKS NEWS INDONESIA-Bumi Resources shares slide after S&P downgrade Shares in Indonesia's Bumi Resources, Asia's biggest thermal coal exporter, fell on Tuesday after S&P cut the company's rating on Monday. S&P lowered its rating on Bumi Resources to 'BB-' from 'BB' with a negative outlook, saying the company is unlikely to substantially lower its debt over the next 12 months. "We expect Bumi's operating cash flow to remain weak because of high production and financing costs and taxes, slower-than-anticipated production growth, and lower coal prices, thereby limiting the company's potential to reduce debt." S&P said in statement. "The negative outlook reflects our expectation that Bumi's financial performance is likely to be weak for the current rating over the next 12 months at least." At 1059 am. (0359 GMT) the stock was trading down 3.77 percent at 1,020 rupiah with 35.5 million shares traded, the third highest turnover on the Indonesian stock exchange. The Jakarta Composite Index was down 0.03 percent. 1101 (0401 GMT) (Reporting by Andjarsari Paramaditha in Jakarta) Link this Share this Digg this Email Reprints

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