Reuters: Hot Stocks: STOCKS NEWS INDONESIA-UBS cuts Ramayana to 'neutral'

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STOCKS NEWS INDONESIA-UBS cuts Ramayana to 'neutral' Aug 8th 2012, 04:11 Wed Aug 8, 2012 12:11am EDT UBS Investment Research downgraded shares of PT Ramayana Lestari Sentosa Tbk to 'neutral' from 'buy', saying same-store sales growth will weaken despite strong sales performance. "As at June 2012, Ramayana's sales performance has been 4 percent above management and our expectations. The strong sales have been driven by the new strategy of focusing on branded consignment products," UBS analyst Ronald Liem said in a note on Wednesday. "However, during Lebaran periods, we think SSSG may not be as high as 12 percent, and hence, maintain our 7 percent SSSG forecast for full-year 2012. This is because the increase in sales is mostly due to lower-income customers and their purchasing power is not as high as those who shop for branded consignment products. These customers may shop only once a year in Ramayana, during the special occasion." UBS, however, raised its target price on the stock to 1,375 rupiah from 1,200 rupiah, saying Ramayana's sales can outgrow the cost and higher long-term margin outlook. At 11:01 a.m. (0401 GMT) the company's shares were down 0.8 percent at 1,200 rupiah while the broader index was up 0.2 percent. 1104 (0404 GMT) (Reporting by Andjarsari Paramaditha) Link this Share this Digg this Email Reprints

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