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STOCKS NEWS INDONESIA-CLSA cuts Mitra Adiperkasa to 'underperform'
September 26, 2012 / 6:06 AM / 5 years ago

STOCKS NEWS INDONESIA-CLSA cuts Mitra Adiperkasa to 'underperform'

CLSA Asia Pacific Markets downgraded Indonesian retailer PT Mitra Adiperkasa Tbk to ‘underperform’ from ‘outperform’, saying a drop in gross margin for the first half reflected material cost pressures and higher rental and salary expenses.

The brokerage also slashed the target price on Mitra’s shares to 6,500 rupiah from 8,000.

“While we believe MAPI’s long-term structural story remains intact, we don’t see current cost pressures abating in the short term,” CLSA analysts Jane Suhardjo and Dee Senaratne wrote in a note on Wednesday.

“Aggressive expansion from retailers has inflated the prices of prime mall space, shifting the power balance from the retailer to the mall operator. MAPI currently rents 100 percent of its shop space, which makes it more vulnerable.”

The minimum wage increases and an increased build-out in professional headcount will place upward pressure on wage costs, the note added.

The broker cut the retailer’s earnings forecast by 9 percent each for 2012 and 2013, saying these factors will limit margin and earnings growth, with regulation uncertainty around franchising rules an additional overhang.

Shares of the branded retailer were down 1.56 percent at 6,300 rupiah. The broader index was down 0.65 percent.

1213 (0513 GMT)

(Reporting by Andjarsari Paramaditha in Jakarta)

**************************************************************** 10:52 STOCKS NEWS INDONESIA-Ristia Bintang jumps after suspension lifted Shares in Indonesia’s construction firm PT Ristia Bintang Mahkota Sejati jumped on Wednesday after Indonesia’s stock exchange lifted a suspension on trading in the company’s shares.

Trading in Ristia Bintang shares was suspended on August 31 after the share price jumped to 205 rupiah, or 135.63 percent, from Aug. 2 to 30, according to a statement from the exchange.

The stock is trading up 24.39 percent at 255 rupiah while the broader Jakarta Composite Index is down 0.64 percent. 1037 (0337 GMT) (Reporting by Andjarsari Paramaditha)

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