Blue or black?<\/p>\n
By Riyadi<\/p>\n
JAKARTA (JP): In this time of uncertainty, only risk-taking
\ninvestors with liquidity to spare would dare invest in equity to
\nseek higher gains.<\/p>\n
But for those who are wary of taking a high risk but still
\nwant to benefit from potential big gains from stock markets would
\nbe advised to invest their money in blue-chip stocks.<\/p>\n
Some would argue that compared with world-class exchanges such
\nas the New York or London stock exchanges, the Jakarta Stock
\nExchange (JSX) does not really have blue chips. But if investors
\ncompare stocks with their peers on the JSX, they can still pick
\nblue chips.<\/p>\n
According to Eva Nilayanti Muis, head of research at Kim Eng
\nSecurities, blue-chip stocks are normally sought after stocks.<\/p>\n
They are big enough in market capitalization to drive the
\nmarket up or down.<\/p>\n
They should be among the most liquid stocks, so that they can
\nbe easily bought and sold.<\/p>\n
And most importantly, they must have good fundamentals.<\/p>\n
According to Kim Eng Securities, JSX's top 10 stocks -- those
\nthat can be categorized as blue chips -- are cigarettemakers
\nGudang Garam and Hanjaya Mandala Sampoerna, foodstuffs producer
\nIndofood Sukses Makmur, international telephone operator Indosat,
\ndomestic telephone monopoly Telkom, consumer products company
\nUnilever Indonesia, retailer Ramayana Lestari Santosa, cement
\nproducer Semen Gresik, pharmaceutical and health care producer
\nTempo Scan Pacific and carmaker Astra International.<\/p>\n
Monthly financial magazine Asiamoney's latest Best Managed
\nCompanies Poll named Ramayana, Gudang Garam, Sampoerna, Unilever
\nand Astra as investors' favorite Indonesian companies.<\/p>\n
The poll, conducted annually, was based on 258 responses from
\n214 institutions in the Asia-Pacific region -- including Japan
\nand Australia --, Europe and the United States.<\/p>\n
Following are the characteristics of these stocks.<\/p>\n
Gudang Garam: With average annual sales of more than 70
\nbillion cigarettes, Gudang Garam is the country's largest
\ncigarettemaker. Despite its low free float of 15.7 percent,
\nGudang Garam is the second largest stock in terms of market
\ncapitalization, trailing just after Telkom. Its market cap as of
\nMarch 7, 2001 reached Rp 26.1 trillion. Not only is Gudang Garam
\nthe second largest capitalized counter, it also has solid
\nfundamentals, with no foreign currency debt. Moreover, the
\ncigarette industry has always been one of the better-performing
\nsectors on the JSX. Last year, its stock prices plunged by 32.29
\npercent to Rp 13,000, and dropped further to Rp 12,950 on March
\n9. Gudang Garam still trades at an attractive price earning ratio
\nof below 10 times, much lower than its average of above 20 times
\nduring the past five years.<\/p>\n
HM Sampoerna: Considered the most innovative, transparent and
\naggressive Indonesian cigarettemaker, Sampoerna is the fourth
\nlargest stock in terms of capitalization, totaling Rp 12.5
\ntrillion as of March 7. Sampoerna managed to reduce significantly
\nits foreign debt to about US$101 million last year from $370
\nmillion recorded in early 1999. Sampoerna stock prices fell by
\n19.57 percent last year to Rp 14,900, and dropped further to Rp
\n13,250 on March 9. Sampoerna currently trades at an attractive
\nprice earning ratio of below eight times, far lower than its own
\nhistorical valuation of above 20 times.<\/p>\n
Indofood: The firm is the country's largest food producer,
\nwith its noodle products found in the majority of Indonesian
\nhouseholds. It is the sixth largest capitalized stock, totaling
\nRp 10.2 trillion as of March 7. It managed to reduce its foreign
\ndebt from above $700 million in 1999 to $452 million as of Sept.
\n30, 2000. The company also claims that 84 percent of its foreign
\ndebt is hedged. Indofood reported a 54 percent drop in net profit
\nto Rp 646 billion last year, with operating profit rising 5
\npercent to Rp 2.4 trillion. Indofood stocks fell by 55.33 percent
\nlast year to Rp 775, but then increased to Rp 900 on March 9.<\/p>\n
Indosat: The state international telephone operator is one of
\nthe few companies that has a clean and strong balance sheet. It
\nheld cash and cash equivalents of Rp 2.3 trillion as of the first
\nnine months of last year, while its debt amounted to only Rp 25
\nbillion. It reported a strong net profit of Rp 1.75 trillion last
\nyear, a 27 percent increase from Rp 1.38 trillion recorded in
\n1999. It is the fifth largest capitalized stock on the JSX,
\ntotaling Rp 11 trillion. Indosat stock prices dropped by 45
\npercent last year to Rp 9,000, but rose this year to close at Rp
\n10,000 on March 9. At this price, the stock still trades at an
\nattractive price earning valuation of around six times.<\/p>\n
Telkom: The country's domestic telephone monopoly is the
\nlargest capitalized stock on the JSX, totaling Rp 30 trillion as
\nof March 7. Like Indosat, Telkom also booked a strong net profit
\ngrowth of 17 percent last year to Rp 2.54 trillion from the Rp
\n2.17 trillion recorded in 1999. Telkom's stock price dropped by
\n52.87 percent to Rp 2,050 but rose this year to Rp 2,775 on March
\n9. At this level, the stock still trades at an attractive price
\nearning ratio of around nine times.<\/p>\n
Unilever: A producer of household products, the company is
\nclaimed to be one publicly listed company unaffected by the
\neconomic crisis. It is the third largest capitalized stock,
\ntotaling Rp 15.8 trillion as of March 7. After a stock split,
\ntrading in Unilever stocks is increasingly on the rise, making
\nthe stock more liquid. Unilever stock was the only stock among
\nthe top 10 stocks that gained last year. The stock rose by 8.7
\npercent last year to Rp 12,500 and soared further this year to Rp
\n17,250 on March 9.<\/p>\n
Ramayana: The company, which operates a chain of supermarkets
\nand department stores across the country, has been chosen by
\nworld financial institution Morgan Stanley as one of the index
\nbarometers for investment managers for the company's brilliant
\nachievement all through 1999, rising from the destruction caused
\nto its outlets during the May 1998 riots. The company recorded
\nsales of Rp 2.3 trillion last year, increasing by 43 percent from
\nRp 1.65 trillion in 1999. Ramayana's stock price dropped by 15
\npercent last year to Rp 2,625, but rose this year to Rp 2,750 on
\nMarch 9. At the current price, the stock trades at an attractive
\nearning multiple of around nine times.<\/p>\n
Semen Gresik: Currently the country's largest cement producer,
\nSemen Gresik has a production capacity of 17.25 million tons of
\ncement per annum. But if the plan to spin off Semen Padang and
\nSemen Tonasa from Semen Gresik proceeds, the company will no
\nlonger be the country's largest cement producer. But the effects
\nof the spin-off will not be entirely negative, as part of the
\nproceeds could be used to repay some of the company's outstanding
\ndebts. Semen Gresik's stock fell by 48.44 percent last year to Rp
\n5,800, but then rose to Rp 6,000 on March 9. The stocks trade at
\nan earning multiple of around 10 times.<\/p>\n
Tempo Scan: A conglomeration of pharmaceutical, health care
\nand cosmetics manufacturing companies, Tempo Scan has been chosen
\nas one of the top 10 stocks because its wide range of products
\nreaches most urban people in the country. In addition, the
\ncompany has also settled all of its debts. The company's stocks
\ndropped 48.3 percent last year to Rp 3,075 and slid further to Rp
\n3,050 on March 9.<\/p>\n
Astra International: A major diversified investment holding
\nand operating company with significant interests in a number of
\nsectors, Astra is better known as an automotive company, with the
\nKijang van being its most popular product. Astra, however, is
\ndogged by foreign debt. Although its debts have been
\nrestructured, they will still burden the company's finances in
\nthe future. Astra's stocks dropped 47.7 percent last year to Rp
\n2,000, and has since slid further to Rp 1,850.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/blue-or-black-1447899208",
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"sponsor": "Okusi Associates",
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