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Sunday, October 10, 2010

ADES stock prices: among the deepness of Nadine's cleavage, AQUA delisting, and high capital market euphoria

10/10/2010
Irvin Avriano A.

ADES stock prices: among the deepness of Nadine's cleavage, AQUA delisting, and high capital market euphoria

Riding on a gigantic white horse runs cross a plenteous field, Nadine Chandrawinata's semi-blond hair waved by the wind. With a backless-sexy white dress that overlooked her outdare cleavage, unfortunately only in seconds, the stupid-accused-2005-Miss Indonesia parse her hair which waving too frequent.

That is a 46 seconds advertising of Makarizo Hair Repair by hair cosmetics branded Makarizo, played in our local television network quite often these days.

The brand was hold by PT Makarizo Indonesia and the product produced by PT Damai Sejahtera Mulia, a company which commandeered by Daniel Hendro Tawang. Beside Makarizo brand which have been trademarked, Damai Sejahtera was also produced another brand, such as Vorsatz, Spa, Creator, T1, and MK3 which came from the same brand holder.

I wandered, after the falling of corporate's brand after its model, Luna Maya, trapped by sex scandal with Ariel and Cut Tari, they are very rare published an advertisement since last year. Is it a way to re-branding their fallen image? Or its related what happen to their producer?

The special one about the Makarizo is not only Nadine's cleavage, but also the stories that lies within, especially which related with capital market.

In September 21st, PT Akasha Wira International Tbk (ADES:IJ) whose bottled water brand relatively strong in the market, shockingly announce their plan to acquire Damai Sejahtera's whole asset and inventories worth US$5 million, or IDR44.56 billion (US$1 equals with IDR8,912).

But the information disclosure itself doesn't explain about the contract between Damai Sejahtera had with their brand holders, Makarizo Indonesia.

But the stock price already jumped 24,35% a day earlier from IDR780 to IDR970, and simultaneously had rocketed 275% until the end of September.

It is not to mention a phenomenon that happen in September 22nd, when its only competitor in the capital market, Aqua brand botled water producer PT Aqua Golden Mississippi Tbk (AQUA:IJ), pocketed its shareholders approval to leave the bourse board and go private. The approval that have been waited in almost last 10 years, finally gained.

Its believed by most of reporters in capital market also make the former Aqua investors to stampede the Akasha's shares.

PT Universal Broker Head of Research Satrio "Tomy" Utomo feels that the switchover possibilities as the jumping ADES share price causes are very thin, considered there are not much similarity in Aqua and Akasha, especially about the size of the business, despite of the similarity of their business.

"Not to mention the incident was occurred in the middle of the capital market conditions that bullish crazily and added an euphoria flavor in between, I think the most reasonable cause was the euphoria of Indonesia stock market, not the investors diversion or their acquisition plan," he told in a seminar.

Tomy's explanation wasn't without basis. The Indonesian Composite Index (also known as Jakarta Composite Index/IHSG) have strengthened about 43.35% since last year, and still try to break record again, even since they already brake thousand of record high this year.

Even though, the AdeS and Nestle Pure Life bottled water producer will use loan from PT Bank Internasional Indonesia Tbk (BNII:IJ), tenured 5 years and yielded 13% a year, for the asset buying scheme.

The business prospect also counted in by the Nestle bottled water producer. They estimate their EBITDA (earnings before interests, taxes, depreciation, and amortization) could arose IDR324 billion in 4 years, between 2011--2015. They also predicted can pocketed additional net profit worth IDR229 billion in the same years.

Still, its also depends on raised utilities from 29% to 35% in 2011 and 40% in the rest years.

But the question is, why the company dare to pledge their most of their valuable asset? That will cause the company ceased to operate when its fails to repay the debt?

And don't forget. As far as I read from the scheme announcement, they will buy the whole asset but the professional management that runs the company that have been spin for 20 years, added the new management with risk that they have to face.

Akasha Wira Director Th. M. Wishnu Adjie told that the company sees an enormous opportunity to wide up their business from formerly only in water consumer product to another consumer product: hair cosmetics.

"We do not attempt to do something else, we didn't plan it before. The opportunity came over us, and we are just take it."

He also feels that the uprising of his company's share price absolutely doesn't related with Aqua delisting plan.

Even thought, anything can be the exact answer as the cause. When the market grows (relatively) irrational, the investor and the company also move irrational too.

In a certain normal condition, you doesn't have to be a genius to read what the matter with a company hiking share price, whether it plan a big project or they have been spotted to bought by a strategist investor for an acquisition.

But in the conditions like in our market, everyone have a big hope, a bigger temptations, and a biggest opportunity.

Somehow it pushed everyone in the market to act fast, even the emitters should take a speed action to gain the advantage from market that flooded by euphoria. Either with IPO move for newcomers, or rights issue or bonds issuance for the old occupant.

Maybe it's too cliche to say that everyone infected by hunger viruses for new securities issuances. But it is the reality. There are a lot of people too afraid to buy, but there are plenty who still take an advantage in an unstable condition.

And it's all start to become frightening for everyone. Make several investors start to take a position to wait for a weakening and then, with a desperate move, to buy everything. Like a play called Waiting on Godot, we don't know when or what will stop the strengthened of the index.

Is this condition stands until the global recover? Or this will become a new basis for our future market? Or worse?

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