Reuters: Hot Stocks: STOCKS NEWS INDONESIA-UOB cuts XL Axiata to sell

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STOCKS NEWS INDONESIA-UOB cuts XL Axiata to sell Nov 1st 2012, 07:26 Thu Nov 1, 2012 3:26am EDT UOB Kay Hian Research downgraded PT XL Axiata Tbk to 'sell' from 'hold', citing disappointing third-quarter results, hurt by loss of subscribers and drop in volumes of short message service (SMS). "3Q12 results came in below expectations with EBITDA margin eroded by infrastructure expenses from aggressive roll-out for 3G and negative impact from SMS interconnection," UOB analyst Jonathan Koh wrote in a note on Thursday. Koh added that the sequential growth in data revenue was also lacklustre despite the festive Lebaran season. For the third quarter, XL Axiata posted a net profit of 735 billion rupiah compared with analysts' estimates of 752 billion rupiah. Koh expects the pressure on margins to remain as long as XL Axiata continues its aggressive roll-out for 3G connection. The research house also cut its target price on the telecom operator to 6,000 rupiah from 6,100 rupiah, citing its inability to grow subscriber base for the past three quarters compared with peers PT Telekomunikasi Indonesia Tbk and PT Indosat Tbk. XL Axiata's shares were down 8.03 percent at 6,300 rupiah, while the broader index was down 0.91 percent. 1349 (0449 GMT) (Reporting by Andjarsari Paramaditha, Editing by Anand Basu) *************************************************************** 13:28 STOCKS NEWS INDONESIA-Bank Rakyat drops on 9-month results Shares in the world's biggest micro lender, PT Bank Rakyat Indonesia fell 2.7 percent on Thursday after it reported nine-month results on Wednesday. "Loan growth remained weak at 15 percent year-on-year (yoy) vs. the sector's 24 percent. Combined with falling NIM and rising costs, nine-month's pre-provisioning operating profit dropped 2 percent yoy to form only 68 percent of our full-year 2012 forecast," Jakarta-based CIMB analyst Mulya Chandra said in a note on Thursday. "Provisioning saved the day, but this appears unsustainably low," the analyst said. The bank's nine-month net profit rose 24.7 percent to 13.01 trillion rupiah compared with 10.43 trillion in the same period a year earlier, the company said in a statement to the stock exchange. CIMB raised Bank Rakyat's target price to 7,400 rupiah from 6,600 but kept its 'underperform' recommendation. UBS Investment Research raised the bank's target price to 8,900 rupiah from 8,500 and kept a 'buy' recommendation, citing growth recovery in micro loans, salary-based loans, the small business segment and better-than-expected operating expense. At 12.47 pm the stock was down 1.35 percent at 7,300 rupiah, with the second biggest turnover as 49.3 million shares changed hands, while the broader Jakarta Composite Index was down 0.69 percent. 1327 (0627 GMT) (Reporting by Andjarsari Paramaditha, Editing by Anupama Dwivedi) Link this Share this Digg this Email Reprints

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