Indonesian cement kept ’overweight’ on robust growth outlook

Indonesian cement kept ’overweight’ on robust growth outlook
11 February 2008

PT Trimegah Securities said in a note to clients it has kept its "overweight" rating on Indonesian cement stocks on a strong growth outlook for this year.  
Trimegah said it has "buy" call on all three listed cement producers, with a target price of IDR7,700 for  Semen Gresik, IDR8,850 for PT  Indocement Tunggal Prakarsa and IDR2,100 for PT Holcim Indonesia.
It said its top pick in the sector is the country’s biggest cement maker by sales volume, the state-owned  PT Semen Gresik, as it offers the biggest upside. 
The brokerage expects domestic cement consumption to grow to 36.6Mt this year from 34.2Mt in 2007.  
It also forecast a 7.3 per cent rise in the cement selling price to 40,100 rupiah per bag.  
Such optimism is supported by robust residential sales, hefty property loan growth supported by low interest rates and scarce supply amid strong domestic demand, especially in Sumatra and eastern Indonesia.  
Published under Cement News