CIMB Equity Research raised its target price on the shares of Indonesian lender PT Bank Bukopin Tbk to 1,300 rupiah from 1,200 and kept its 'outperform' rating, saying higher net interest margin (NIM) in the second half could be the catalyst.
"Bukopin indicated that it is reducing its exposure to Bulog loans, which amounted to 23% of its portfolio in 2Q12.. This is positive as it could eventually improve NIM since the easing of the LDR (loan to deposit ratio) should alleviate any cost of fund risks and the blended yield should rise," CIMB Equity analysts Mulya Chandra and Hadi Soegiarto wrote in a note on Tuesday.
Bulog, or Indonesian bureau of logistics, is a state-owned enterprise that manages the supply, and controls the reserves and prices, of basic foodstuffs.
"Combining both factors, assuming that Bulog loan exposure drop to 15% in 2H12, NIM could rise by 74 basis point to 5.7%," they said.
The stock was up 1.56 percent at 650 rupiah with 41.6 million shares traded, the second highest volume, while the broader index was up 0.65 percent.
1203 (0503 GMT)
(Reporting by Andjarsari Paramaditha; Editing by Jijo Jacob)
((email@example.com)(+62 21 3199 7170)(Reuters Messaging: firstname.lastname@example.org))
Keywords: MARKETS INDONESIA STOCKSNEWS/BANKBUKOPIN