RISET FR CIMB 17 APRIL 2013

RISET FR CIMB 17 APRIL 2013 :

1.Plantations   | A less fruitful outlook
NEUTRAL - Maintained
by Erindra KRISNAWAN, Erisca WIRAATMADJA 

Cost pressure remains a key risk and sector profitability has been dented by our recent earnings cuts for Indonesian planters on the heels of a CPO price downgrade. But the sector's lower returns are priced in as the sell-off has taken EV/ha to the low end of market transactions. We remain Neutral on the Indonesian plantation sector as the CPO price outlook is less upbeat and production costs are on the rise. We now prefer planters with strong output growth and better estate profitability which will mitigate margin erosion from weaker prices and higher labour costs. This is the reason why BW Plantation (BWPT) is our top pick.

Sector Comparisons :
AALI Neutral TP 19,900
BWPT Outperform TP 1,500
LSIP Neutral TP 2,000
SIMP Neutral TP 1,058
SGRO Neutral TP 2,250

(16 April 2013)




2.Alpha Edge | Gold breaks its legs by Nigel FOO,

Gold's key support trendline gave way at the end of last week with prices cascading a shocking 14% in only two trading days. There is further downside for gold, in our reckoning. The Continuous Commodity Index's weekly chart shows the index in a sideways channel consolidation since last Sep with support at 500 and 525. We remain bullish on crude oil as long as prices do not fall below US$84/barrel. (ASIA - 16 April 2013)




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