Coal, nickel and tin prices will probably rise as the global economy recovers, making mining stocks such as PT Bumi Resources a good investment, while property developers will benefit from lower borrowing costs, analysts at state-owned brokerage PT Danareksa Sekuritas said.
“I’m upbeat on nickel as there appears to be excess demand for the metal this year,” said Metty Fauziah Wardhani, a mining analyst at Danareksa, the country’s best brokerage in 2009, according to an Asiamoney magazine poll. “Tin may rise on demand from electronics producers.”
Metty recommends buying PT International Nickel Indonesia, the nation’s biggest tin producer, and PT Timah.
The Jakarta Composite Index rose 87 percent last year, making it Asia’s second-best performer. Shares of Bumi, owned by the Bakrie group, more than doubled in 2009 after a 78 percent gain in oil prices improved the outlook for alternative fuels. Goldman Sachs on Thursday raised its spot-price forecasts for thermal coal to $86 a metric ton on stronger demand from China and other buyers.
“Bumi and [other] Bakrie group stocks were the favorite stocks during 2009 as the group’s corporate actions successfully attracted investors’ interest,” said Syaiful Adrian, an analyst at PT Ciptadana Sekuritas.
Investors should also buy property developers as lower mortgage rates and infrastructure development should help developers, including PT Alam Sutera Realty, Danareksa property analyst Lydia Suwandi said.
Alam Sutera may extend last year’s 110 percent gain in its share price after the government opened access to a toll road from an area adjacent to the company’s housing project in Serpong, West Java, boosting transport links to Jakarta, Lydia said.
“Infrastructure spending will be the catalyst for property stocks this year,” she said.
The government is building more roads, bridges and power plants to sustain economic growth, which Bank Indonesia has forecast at as much as 5.5 percent this year. President Susilo Bambang Yudhoyono pledged to double infrastructure spending to as much as $140 million in his second five-year term, which ends in 2014.
A drop in mortgage rates may also lift property sales, Lydia added. Bank Indonesia cut its benchmark interest rate to a record low of 6.5 percent in August 2009, making housing loans more affordable. Slower-than-expected inflation in December widened the scope for the central bank to delay raising rates.
Lydia also likes PT Summarecon Agung and PT Ciputra Development, the nation’s third-biggest property developer.
The mining sector dominated trades on the Indonesia Stock Exchange (IDX) in 2009, making up Rp 387 trillion, or 39.7 percent, of the total Rp 975 trillion worth of shares traded, according to IDX data.
Infrastructure came in second with 17 percent of total trades by value.