Morgan Stanley upgrades Indocement to overweight

Morgan Stanley upgrades Indocement to overweight
Published: 17 December 2010

Morgan Stanley upgrades Indocement to Overweight from Equalweight and raises the target price to IDR19,000 from 18,000 following a 15% price correction over the past 3 months.

"We are positive on Indonesia’s cement consumption outlook and forecast 8.5% demand growth on the back of 6.5% GDP growth for 2011."

The house believes the recent deceleration in demand growth is weather induced and temporary. It reckons the long-term fundamentals of rising income, low per capita cement consumption and higher infrastructure spending remain intact and supportive of strong cement consumption growth.