This is the link of data that provide the table, and also the graph of the Barito Daily Stock and IHSG Market Stock from 2 January till 30 October
http://www.4shared.com/document/osEoKwII/barito_pacific_tbk.html
you can download, and enjoy it.. Thx
Sabtu, 27 November 2010
Kamis, 25 November 2010
Analysis Of Company Stock and Business Portfolio of Barito Pacific Tbk
CHAPTER I
COMPANY PROFILE
PT Barito Pacific Tbk established on 1979 under the name of PT Bumi Raya Pura Mas Kalimantan. The Company started out as a wood based company. Barito Pacific is one the pioneers of sustainable HTI (Hutan Tanaman Industri), the Indonesian term for industrial forest estate). With this first truly sustainable industrial, timber estate operation in Indonesia at the time, The Company quickly built a reputation for being one of the early environmentally focused wood-based companies to emerge from Asia.
In 1993, the Company listed its shares on the Jakarta and Surabaya Bourses (recently merged to become the Indonesia Stock Exchange IDX). The result of this listing used by the Company to embark on a massive industrial forest plantation development programs and to secure sustainable supply of logs to feed supply the Company's wood processing mils. At the time, the Company had 5 processing mils altogether, producing plywood, blackboards, particle boards and woodworking products for exports to Europe, Asia, and America.
PT Barito Pacific Tbk has a vision, which is “To become a diversified and integrated resource based company that is able to grow and to develop continuously over the long term in order to provide added value to the stakeholders”. And the mission of this company are To establish footholds in the industry sectors that are renewable and resource oriented with significant growth from upstream to downstream through business diversification and integration into resource-based industry that provide a strong revenue stream for the growth and development in the future. Core Values of company are Good Corporate Governance, Transparency, Accountability, Responsibility, Independence, and Fairness. PT Barito Pacific Tbk are already fulfill those requirements and listed in LQ45 since period of august 2006-january 2007. Recently, LQ45 has newcomers but PT Barito Pacific Tbk still exists because they still can prove their performance through the year.
CHAPTER II
ANALYSIS OF COMPANY STOCK RISK AND MARKET RISK
Stock return and risk is an important thing when you buy or maybe study about stock. Stock return represented by capital gains/losses that calculated by the movement of stock prices. Market Return represented by gains/losses of market that calculated by the movement of market indexes in term of it we will use Indonesia Composite Index. The risk calculated by the deviation standard of stock return and market return.
Stock price index is an indicator that shows the movement of stock prices. Market index is a measure of the investment performance of overall market. Index has function as an indicator of market trends, which means the movement of the index describes market conditions at any time, whether the market is active or weak. Index will help us to know the trend of stock price movement today; whether it is rising, steady or falling. The movement of the index becomes an important indicator for investors to determine whether they will sell, hold or buy one or several shares because stock prices have quickly movement. In this explanation of the stock index we will focus in compare the Company stock index with the combination of all the stock index that is called Indeks Harga Saham Gabungan (IHSG), using all of the shares listed as a component of the index calculation.
When investors buy a stock, their return comes into two forms. There are dividend and capital gain or capital losses. Capital gain or capital losses can we see when the return is positive or negative. When the return is positive, it will be capital gain. When the return is negative, we can call it as capital losses.
Daily Stock Return
There are many formula that can be use to calculate the daily stock return, but we will use the simplest one using Single period with Arithmetic Return method.
We can calculate the daily stock return with this arithmetic return formula:
Ri =
After we using the formula above we can get the daily stock return (Ri) For example, we choose one of the data that is the highest data In September 27th 2010 we can see the return stock was very high that is 0.120967742 or 12.1 % It is a very high positive in the data of daily stock return of the barito pacific at that time. The return was positive and it is good for companies that have a positive return, investors will be trust to the company. Actually, that was a daily, so it was not wise if we judge the company by their one-day performance. If we looked at the data one day after we can saw that the return was negative at May 25th 2010 was -0.132653001or -13.26 %. It is very negative amount of the daily stock return and it will be bad for the company if this situation continuously happen. It is not good if you have a negative return. Seeing the daily stock return it's not guarantee that we will choose the right company to invested in. From the calculation above we can see that sometime the company are in a good condition, some time it can be in a bad condition. With this uncertainty what should we do is see the average of the company daily stock return to know the average performance of the company.
Average Daily Stock Return
After we calculate all of the daily stock return, what we should do is we sum all of the daily stock return data, and then divided by the number of the data. From the company data, we can get the average daily stock return. From the daily stock return of Barito Pacific Tbk it was 0.000235954 or 0.02 %. The average daily stock return was positive but in the small amount not as big as the highest value. Why this stock have the biggest value that is 12.6% but the average is only 0.02%? . Although it is better rather than have a negative value for the average daily stock return. With this condition we can say that this company stock return was very fluctuate. The fluctuation of the stock return can be happen by many factor. We know that the business of the Barito Pacific got the impact from global recession, global crisis and many more. After we analyse the daily stock return we will continue to look from the daily market return of the indonesia composite index and compare it to the company daily stock return.
Daily Market Return
To calculate daily market return we will use the same formula as if we calculate the daily stock return. The main difference between daily stock return and daily market return is, the daily stock return will calculate in the company stock index, and in the daily market return it will calculate the rate of return in the market index, like that we use now is Indonesia Composite Index (Indeks Harga Saham Gabungan). After we calculate the daily market return we choose one of the highest data In May 26th 2010 we can see the return stock was 0.0726537 or 7.2 % It is a very high positive in the data of daily market return of the Indonesia composite index. It shows a good positive that mean that in this date the condition of the company that list in Indonesia Composite Index is in a good condition.
Average Daily Market Return
In this average daily market return, it is shows that the return of the overall of the stock in Indonesia was positive. It was positive 0.001773027 or 0.17 %. Why It have a positive although it consist of many company that have different size of stock ? Maybe because the IHSG consist of the stagnant or maybe not responsive companies so, the movement can be zero or the recession or crisis does not affect directly to the small company so the IHSG still shown positive value. If the company shows the negative return, why the company still sold their stock or maybe the investors still trust and not sold their Barito’s Stock? Of course not because of any people do not want to buy the stock, but we must consider not only the return but also the risk of the stock. If you buy the stock with higher return but with highest risk it will be a big disaster when someday you saw your stock that falling down quickly.
So we cannot judge the stock by its return, we must consider the risk of the stock. We can see the risk of the bond with look at the standard deviation and the variance of the stock. The variance essentially measures the average squared difference between the actual returns and the average return. The bigger this number is, the more the actual return tends to differ from the average return. Also the larger the variance and standard deviation is, the more spread out the return. In choosing the right stock we should analyze carefully about the risk and return.
After we know the daily stock returns and the daily market returns ,average of the daily stock return and daily market return , we can compare the company stock to the daily market return. From this analysis we can see the power of the barito pacific stock return condition to the average of other company that have been list in the indonesia composite index. From the daily return we can see the fluctuation of both of the stock. When we see from the average of the stock return it is clear that both of them have a stable condition that they still in the positive amount.
Standard Deviation of the Daily Stock Return
See from the daily stock return we can calculate the standard deviation of the stock return to know the condition related to the each daily stock return and the average daily stock return. The standard deviation analysis is very important because it will show to us about the real condition of the company daily stock return. Calculated the standard deviation is the more specific one rather than we use the average of the daily stock return.
The formula for the standard deviation is:
The standard deviation for the Barito Pacific stock condition in their daily stock return is 0.026579 or 2.6% is it good that it has a positive amount. With this positive amount the investor will interesting to invest in this company, and the percentage is not too big that means that this company not have a high return, and also the high risk. Barito Pacific has also been the company that play a big role in petrochemical, and timber in Indonesia. The investor thing about this company because this company not just have one company but many SBU ( Strategic Business Unit). Of course, it will strengthen the position of the Barito Pacific Tbk itself. The thing that important is the Barito Pacific Tbk has a positive standard deviation, the meaning is although it's only 2.6% but it will be promising to the investor who want to invest in this company stock.
Standard Deviation of the Daily Market Return
Using the same formula to calculate the standard deviation of the daily stock return. The standard deviation for the Indonesia Composite Index daily market return is 0.012870943 or 1.2% is it good that it has a positive amount. With the positive amount the average condition of the company that listed in the Indonesia Composite Index is not bad. Barito Pacific has also been the company that not only listed in the Indonesia Composite Index but also become the LQ 45. With the small positive standard deviation it will reduce risk for the investor, it will comes to low return and low risk.
Analyze the Beta of the Company Stock
Beta, or the beta coefficient, measures the correlation between an investment's value and movements in the overall market. A high beta implies a stock price grows dramatically when the market is up, and falls dramatically when the market goes down. Small values of beta mean the stock price is relatively unaffected by the swings in the overall market.
Aggressive stocks have high betas, betas greater than 1.0, meaning that their returns tend to respond more than one-for-one to changes in return of the overall market. The betas of defensive stocks are less than 1.0. The returns of these stocks vary less than one-for-one with market returns. The average beta of all stocks is-no surprise here-1.0 exactly.
Because Beta is a comparison to the overall market, a benchmark or baseline representing the overall market is needed - usually, the S&P 500 is used, although betas can also be calculated against industry-specific indices. Precise methods for calculating Beta can differ.
In finance, the beta (β) of a stock or portfolio is a number describing the relation of its returns with that of the financial market as a whole. The beta coefficient is a key parameter in the capital asset pricing model(CAPM). It measures the part of the asset's statistical variance that cannot be mitigated by the diversification provided by the portfolio of many risky assets, because it is correlated with the return of the other assets that are in the portfolio. Beta can be estimated for individual companies using regression analysis against a stock market index.
The formula for the beta of an asset within a portfolio is
In order to make it simple we using regression analysis from the microsoft excel. after we use the daily stock return , and daily market return into regression analysis we get this data:
Regression Statistics
Multiple R 0.61387905
R Square 0.37684749
Adjusted R Square 0.37376258
Standard Error 0.02103335
Observations 204
ANOVA
df SS MS F Significance F
Regression 1 0.054043021 0.054043021 122.158207 1.6264E-22
Residual 202 0.089365182 0.000442402
Total 203 0.143408203
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -0.00201169 0.001486604 -1.35320831 0.17750154 -0.0049429 0.0009196 -0.00494294 0.000919567
X Variable 1 1.26768522 0.114696484 11.05252037 1.6264E-22 1.04152929 1.4938411 1.041529294 1.493841148
After we use the data analysis regression from the market index of the daily stock return (company) and daily market index (ihsg). If we see from XVariable1 we can get the beta for those two computation, because beta(β) is equal with XVariable1. From the data above we can know that the beta(β) for daily stock market-IHSG is 1.26768522. With those beta it can be considered as aggressive stock because the beta is more than 1.0, in term of aggressively. Compare to the IHSG Barito Pacific has an aggressive stock that they have a stock that can say as an aggressive stock compare to the other company that listed in the IHSG. Different with defensive stock that the beta is less than 1.0
Factors that influence the fluctuation of stock return and market return
Some market movers are obvious, while others creep up on us unseen. There are many factors that can make the stock fluctuate. Some of the economic, political, and societal issues that may cause the market to change direction or speed up or slow down its momentum.
A quick list of the obvious includes: inflation ,interest rates ,earnings ,oil/energy prices ,war/terrorism , crime/fraud ,and serious domestic political unrest
Many of these factor have serious long-term implications, while others may only cause temporary disruptions. However, the one factor not listed above that drives the market absolutely crazy is uncertainty. The market cannot stand surprises and when there is the chance that something may change, it rattles the market.
Surprising economic news, war or terrorism, and other unexpected events disturb the markets sense of control and often send it in a tailspin. Of course, really good news can cause a big bump in prices, but it seems like these days it’s bad news that captures most of the headlines.
For most investors, these market bumps are just that temporary bumps that soon smooth out. However, you need to be aware of the factors that move the market, since they can create opportunities as well as problems.
CHAPTER III
BCG Matrix in the Company Business Portfolio
The BCG Matrix made a significant contribution to strategic management and continues to be an important strategic tool used by companies today. The matrix provides a composite picture of the strategic position of each separate business within a company so that the management can determine the strengths and the needs of all sectors of the firm. The development of the matrix requires the assessment of a business portfolio, which include an organization’s autonomous divisions ( activities, or profit centers).
The BCG or growth- share matrix imposes a two- dimensional analysis on management of Strategic Business Units: a comparative analysis of business strength and an assessment of the environment. The business strength measure is the business;s Relative Market share. The environmental measure is the Market Growth Rate.
Below is the graph of the Growth Share Matrix that are very popular in analyze the condition of the market.
Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off.
Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.
Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom to dogdom.
Barito Pacific has many SBU ( Strategic Business Unit) that the Strategic Business Unit focus on Petrochemical, Timber, and Property.
1. PT TUNGGAL AGATHIS INDAH WOOD INDUSTRIES (Logging and Timber Manufacturing)
PT Tunggal Agathis Indah Wood Industries (“TAI WI”) was established in 1980, engaged in logging and timber manufacturing business.
2. PT KIRANA CAKRAWALA (Industrial Timber Plantation)
PT Kirana Cakrawala (“KC”) was established in 1992 to engage in the management of an Industrial Timber Plantation
3. PT MANGOLE TIMBER PRODUCER(Logging and Timber Manufacturing)
PT Mangole Timber Producer (“MTP”) was established in 1970. MTP engaged in logging and timber manufacturing business.
4. PT KALPIKA WANATAMA (Industrial Timber Plantation)
PT Kalpika Wanatama (“KW”) was established in 1992 to engage in the development of timber industrial estates as well as in related activities that enhance the productivity of the estates as well as to preserve the natural environment within and surrounding those estates.
5. PT GRIYA IDOLA (Property)
PT Griya Idola (“GI”) was established in 1989, originally under the name of PT Griya Idola Real Estate. It is now the owner and operator of the Barito Pacific twin towers office complex in Jakarta. GI has a land bank totalling 13,582 sqm in a prime district of Jakarta.
6. PT CHANDRA ASRI (Petrochemical)
(“Chandra Asri” or “CA”) is the leading petrochemicals producer in Indonesia. Since 2005 the overall utilisation rate has reached 100%. It has a dominant market position with over 50% share of the olefins market, with strong local customer base.
7. PT STYRINDO MONO INDONESIA (Petrochemical)
Acquired by CA in April 2007, PT Styrindo Mono Indonesia (“Styrindo Mono Indonesia” or “SMI”) is the only local producer of styrene monomer, mostly sold to domestic market with a total market share of 80%. SMI exported its remaining products to China and other Southeast Asian countries.
8. PT TRI POLYTA INDONESIA Tbk (Petrochemical)
Barito Pacific acquired a controlling interest of PT Tri Polyta Indonesia Tbk (“Tri Polyta” or “TPIA ”) in June 2008. The company produces polypropylene, including homopolymer, random copolymer, and impact copolymer materials which are commonly used food packaging and plastic utensils. The main raw material provider for TPIA is CA.
9. MARIGOLD RESOURCES Pte . Ltd (Holding Company)
THE BCG MATRIX BARITO PACIFIC TBK
Above is the BCG Matrix of the Barito Pacific Tbk subsidiary.
For the stars is PT Griya Idola because it units have high market share in a fast-growing industry. PT Griya Idola is not the biggest property development because it have many competitor like Lippo, Bakrie, Ciputra but it has a good prospect in the future. In the Stars what they need to do is maintain well the stars to become the cashcow.
From the Timber sector of the Barito Pacific Tbk like PT. Tunggal Agathis Indah ,PT. Kirana Cakrawala, PT. Mangole Timber, PT. Kalpika Wanatama I categorize this subsidiary into the Question marks because thus consume large amounts of cash, but because they have low market shares they do not generate much cash. With the environment issue the activities of the timber sector will be disturb like they have to closed their two branch in Maluku. In general some of them can become a stars because they have a good performance like PT Mangole Timber that they include in the company that have the biggest area to the timber resources. This company have a good opportunity to become star.
I think the example for the dog maybe is Marigold Resources, Pte. Ltd. It is operate in Singapore and I can't get the data about this company, and I think it's not a big company that can give a big contribution to the Barito Pacific Tbk. From the data we can see that the Barito Pacific are very professional in developing the petrochemical industries.
Different with PT. Chandra Asri, PT. Styrindo Mono Indonesia, and PT. Tri Polyta that three of them are become the biggest petrochemical sector in Indonesia. PT.Chandra Asri they dominantly catch the market of the Indonesia they become the only manufacturer of olefin in Indonesia that is further cracked into ethylene, propylene, py-gas, and mixed C4. Chandra Asri thereby enjoys as strategic foothold, at the very top of the petrochemicals supply chain for a whole range of manufacturing industries in Indonesia. PT.Styrindo Mono Indonesia maintains a market share of approximately 80% of the domestic market for styrene monomers and is a key player in export markets of China and Southeast Asia. The company plays an important role in Barito Pacific’s goal to become a fully integrated resource based company. PT. Tri Polyta is not different that currently the largest manufacturer of polypropylene resins in Indonesia. Polypropylene resins are produced in the forms of homopolymer, random copolymer and impact copolymer, including film and yarn resins, all of which are widely used for the manufacturing of food packagings, garments and fabric bags, tobacco wraps, paper laminations, woven sacks and many others. These three subsidiary has become cashcow of the company because they have been maintained well and very productive also have high market share These units typically generate cash in excess of the amount of cash needed to maintain the business. They have been in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
CHAPTER IV
Conclusion
Based on the analysis the movement of the market return from Barito Pacific compare to IHSG . The rate of return of Barito Pacific Tbk is highest, that makes Barito Pacific Tbk promising and profitable in the stock market. From the lowest and highest daily stock market Barito Pacific has an unstable in their daily stock data they daily stock return is too fluctuate, and it will make the investor doesn't save. In general, sometimes it has a very positive amount, but in the other time it have a very negative amount, although the average it’s still okay that's in the positive amount.
The stock return will influence the risk of company. If the return of daily market and stock change in large range, the risk will be lower. Reversely when the daily market of stock was change in few number risks will be higher. It means when the average of return in Barito Pacific Tbk is small so the risks will be high. And if we see from company daily stock return and IHSG the standard deviation are 0.026579 and 0.012870943. So the conclusions, the return and risk for the daily stock return are higher than IHSG. In General The return and risk of the daily stock return and daily market return(IHSG) are low so the risk and return of the company low.
BCG Matrix can be used in Analyze the condition of the company business to know in where level the business today. Barito Pacific Tbk is the company that have many SBU (Strategic Business Unit) that can be analyze using BCG Matrix.
References:
http://finance.yahoo.com/q/hp?s=BRPT.JK
http://www.barito-pacific.com/index.php/about/index/3
http://www.barito-pacific.com/index.php/about/index/4
http://stocks.about.com/od/whatmovesthemarket/a/Whatmovesmarket.htm
http://www.scribd.com/doc/2382132/BCG-Matrix-KFC
http://en.wikipedia.org/wiki/Growth-share_matrix
COMPANY PROFILE
PT Barito Pacific Tbk established on 1979 under the name of PT Bumi Raya Pura Mas Kalimantan. The Company started out as a wood based company. Barito Pacific is one the pioneers of sustainable HTI (Hutan Tanaman Industri), the Indonesian term for industrial forest estate). With this first truly sustainable industrial, timber estate operation in Indonesia at the time, The Company quickly built a reputation for being one of the early environmentally focused wood-based companies to emerge from Asia.
In 1993, the Company listed its shares on the Jakarta and Surabaya Bourses (recently merged to become the Indonesia Stock Exchange IDX). The result of this listing used by the Company to embark on a massive industrial forest plantation development programs and to secure sustainable supply of logs to feed supply the Company's wood processing mils. At the time, the Company had 5 processing mils altogether, producing plywood, blackboards, particle boards and woodworking products for exports to Europe, Asia, and America.
PT Barito Pacific Tbk has a vision, which is “To become a diversified and integrated resource based company that is able to grow and to develop continuously over the long term in order to provide added value to the stakeholders”. And the mission of this company are To establish footholds in the industry sectors that are renewable and resource oriented with significant growth from upstream to downstream through business diversification and integration into resource-based industry that provide a strong revenue stream for the growth and development in the future. Core Values of company are Good Corporate Governance, Transparency, Accountability, Responsibility, Independence, and Fairness. PT Barito Pacific Tbk are already fulfill those requirements and listed in LQ45 since period of august 2006-january 2007. Recently, LQ45 has newcomers but PT Barito Pacific Tbk still exists because they still can prove their performance through the year.
CHAPTER II
ANALYSIS OF COMPANY STOCK RISK AND MARKET RISK
Stock return and risk is an important thing when you buy or maybe study about stock. Stock return represented by capital gains/losses that calculated by the movement of stock prices. Market Return represented by gains/losses of market that calculated by the movement of market indexes in term of it we will use Indonesia Composite Index. The risk calculated by the deviation standard of stock return and market return.
Stock price index is an indicator that shows the movement of stock prices. Market index is a measure of the investment performance of overall market. Index has function as an indicator of market trends, which means the movement of the index describes market conditions at any time, whether the market is active or weak. Index will help us to know the trend of stock price movement today; whether it is rising, steady or falling. The movement of the index becomes an important indicator for investors to determine whether they will sell, hold or buy one or several shares because stock prices have quickly movement. In this explanation of the stock index we will focus in compare the Company stock index with the combination of all the stock index that is called Indeks Harga Saham Gabungan (IHSG), using all of the shares listed as a component of the index calculation.
When investors buy a stock, their return comes into two forms. There are dividend and capital gain or capital losses. Capital gain or capital losses can we see when the return is positive or negative. When the return is positive, it will be capital gain. When the return is negative, we can call it as capital losses.
Daily Stock Return
There are many formula that can be use to calculate the daily stock return, but we will use the simplest one using Single period with Arithmetic Return method.
We can calculate the daily stock return with this arithmetic return formula:
Ri =
After we using the formula above we can get the daily stock return (Ri) For example, we choose one of the data that is the highest data In September 27th 2010 we can see the return stock was very high that is 0.120967742 or 12.1 % It is a very high positive in the data of daily stock return of the barito pacific at that time. The return was positive and it is good for companies that have a positive return, investors will be trust to the company. Actually, that was a daily, so it was not wise if we judge the company by their one-day performance. If we looked at the data one day after we can saw that the return was negative at May 25th 2010 was -0.132653001or -13.26 %. It is very negative amount of the daily stock return and it will be bad for the company if this situation continuously happen. It is not good if you have a negative return. Seeing the daily stock return it's not guarantee that we will choose the right company to invested in. From the calculation above we can see that sometime the company are in a good condition, some time it can be in a bad condition. With this uncertainty what should we do is see the average of the company daily stock return to know the average performance of the company.
Average Daily Stock Return
After we calculate all of the daily stock return, what we should do is we sum all of the daily stock return data, and then divided by the number of the data. From the company data, we can get the average daily stock return. From the daily stock return of Barito Pacific Tbk it was 0.000235954 or 0.02 %. The average daily stock return was positive but in the small amount not as big as the highest value. Why this stock have the biggest value that is 12.6% but the average is only 0.02%? . Although it is better rather than have a negative value for the average daily stock return. With this condition we can say that this company stock return was very fluctuate. The fluctuation of the stock return can be happen by many factor. We know that the business of the Barito Pacific got the impact from global recession, global crisis and many more. After we analyse the daily stock return we will continue to look from the daily market return of the indonesia composite index and compare it to the company daily stock return.
Daily Market Return
To calculate daily market return we will use the same formula as if we calculate the daily stock return. The main difference between daily stock return and daily market return is, the daily stock return will calculate in the company stock index, and in the daily market return it will calculate the rate of return in the market index, like that we use now is Indonesia Composite Index (Indeks Harga Saham Gabungan). After we calculate the daily market return we choose one of the highest data In May 26th 2010 we can see the return stock was 0.0726537 or 7.2 % It is a very high positive in the data of daily market return of the Indonesia composite index. It shows a good positive that mean that in this date the condition of the company that list in Indonesia Composite Index is in a good condition.
Average Daily Market Return
In this average daily market return, it is shows that the return of the overall of the stock in Indonesia was positive. It was positive 0.001773027 or 0.17 %. Why It have a positive although it consist of many company that have different size of stock ? Maybe because the IHSG consist of the stagnant or maybe not responsive companies so, the movement can be zero or the recession or crisis does not affect directly to the small company so the IHSG still shown positive value. If the company shows the negative return, why the company still sold their stock or maybe the investors still trust and not sold their Barito’s Stock? Of course not because of any people do not want to buy the stock, but we must consider not only the return but also the risk of the stock. If you buy the stock with higher return but with highest risk it will be a big disaster when someday you saw your stock that falling down quickly.
So we cannot judge the stock by its return, we must consider the risk of the stock. We can see the risk of the bond with look at the standard deviation and the variance of the stock. The variance essentially measures the average squared difference between the actual returns and the average return. The bigger this number is, the more the actual return tends to differ from the average return. Also the larger the variance and standard deviation is, the more spread out the return. In choosing the right stock we should analyze carefully about the risk and return.
After we know the daily stock returns and the daily market returns ,average of the daily stock return and daily market return , we can compare the company stock to the daily market return. From this analysis we can see the power of the barito pacific stock return condition to the average of other company that have been list in the indonesia composite index. From the daily return we can see the fluctuation of both of the stock. When we see from the average of the stock return it is clear that both of them have a stable condition that they still in the positive amount.
Standard Deviation of the Daily Stock Return
See from the daily stock return we can calculate the standard deviation of the stock return to know the condition related to the each daily stock return and the average daily stock return. The standard deviation analysis is very important because it will show to us about the real condition of the company daily stock return. Calculated the standard deviation is the more specific one rather than we use the average of the daily stock return.
The formula for the standard deviation is:
The standard deviation for the Barito Pacific stock condition in their daily stock return is 0.026579 or 2.6% is it good that it has a positive amount. With this positive amount the investor will interesting to invest in this company, and the percentage is not too big that means that this company not have a high return, and also the high risk. Barito Pacific has also been the company that play a big role in petrochemical, and timber in Indonesia. The investor thing about this company because this company not just have one company but many SBU ( Strategic Business Unit). Of course, it will strengthen the position of the Barito Pacific Tbk itself. The thing that important is the Barito Pacific Tbk has a positive standard deviation, the meaning is although it's only 2.6% but it will be promising to the investor who want to invest in this company stock.
Standard Deviation of the Daily Market Return
Using the same formula to calculate the standard deviation of the daily stock return. The standard deviation for the Indonesia Composite Index daily market return is 0.012870943 or 1.2% is it good that it has a positive amount. With the positive amount the average condition of the company that listed in the Indonesia Composite Index is not bad. Barito Pacific has also been the company that not only listed in the Indonesia Composite Index but also become the LQ 45. With the small positive standard deviation it will reduce risk for the investor, it will comes to low return and low risk.
Analyze the Beta of the Company Stock
Beta, or the beta coefficient, measures the correlation between an investment's value and movements in the overall market. A high beta implies a stock price grows dramatically when the market is up, and falls dramatically when the market goes down. Small values of beta mean the stock price is relatively unaffected by the swings in the overall market.
Aggressive stocks have high betas, betas greater than 1.0, meaning that their returns tend to respond more than one-for-one to changes in return of the overall market. The betas of defensive stocks are less than 1.0. The returns of these stocks vary less than one-for-one with market returns. The average beta of all stocks is-no surprise here-1.0 exactly.
Because Beta is a comparison to the overall market, a benchmark or baseline representing the overall market is needed - usually, the S&P 500 is used, although betas can also be calculated against industry-specific indices. Precise methods for calculating Beta can differ.
In finance, the beta (β) of a stock or portfolio is a number describing the relation of its returns with that of the financial market as a whole. The beta coefficient is a key parameter in the capital asset pricing model(CAPM). It measures the part of the asset's statistical variance that cannot be mitigated by the diversification provided by the portfolio of many risky assets, because it is correlated with the return of the other assets that are in the portfolio. Beta can be estimated for individual companies using regression analysis against a stock market index.
The formula for the beta of an asset within a portfolio is
In order to make it simple we using regression analysis from the microsoft excel. after we use the daily stock return , and daily market return into regression analysis we get this data:
Regression Statistics
Multiple R 0.61387905
R Square 0.37684749
Adjusted R Square 0.37376258
Standard Error 0.02103335
Observations 204
ANOVA
df SS MS F Significance F
Regression 1 0.054043021 0.054043021 122.158207 1.6264E-22
Residual 202 0.089365182 0.000442402
Total 203 0.143408203
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -0.00201169 0.001486604 -1.35320831 0.17750154 -0.0049429 0.0009196 -0.00494294 0.000919567
X Variable 1 1.26768522 0.114696484 11.05252037 1.6264E-22 1.04152929 1.4938411 1.041529294 1.493841148
After we use the data analysis regression from the market index of the daily stock return (company) and daily market index (ihsg). If we see from XVariable1 we can get the beta for those two computation, because beta(β) is equal with XVariable1. From the data above we can know that the beta(β) for daily stock market-IHSG is 1.26768522. With those beta it can be considered as aggressive stock because the beta is more than 1.0, in term of aggressively. Compare to the IHSG Barito Pacific has an aggressive stock that they have a stock that can say as an aggressive stock compare to the other company that listed in the IHSG. Different with defensive stock that the beta is less than 1.0
Factors that influence the fluctuation of stock return and market return
Some market movers are obvious, while others creep up on us unseen. There are many factors that can make the stock fluctuate. Some of the economic, political, and societal issues that may cause the market to change direction or speed up or slow down its momentum.
A quick list of the obvious includes: inflation ,interest rates ,earnings ,oil/energy prices ,war/terrorism , crime/fraud ,and serious domestic political unrest
Many of these factor have serious long-term implications, while others may only cause temporary disruptions. However, the one factor not listed above that drives the market absolutely crazy is uncertainty. The market cannot stand surprises and when there is the chance that something may change, it rattles the market.
Surprising economic news, war or terrorism, and other unexpected events disturb the markets sense of control and often send it in a tailspin. Of course, really good news can cause a big bump in prices, but it seems like these days it’s bad news that captures most of the headlines.
For most investors, these market bumps are just that temporary bumps that soon smooth out. However, you need to be aware of the factors that move the market, since they can create opportunities as well as problems.
CHAPTER III
BCG Matrix in the Company Business Portfolio
The BCG Matrix made a significant contribution to strategic management and continues to be an important strategic tool used by companies today. The matrix provides a composite picture of the strategic position of each separate business within a company so that the management can determine the strengths and the needs of all sectors of the firm. The development of the matrix requires the assessment of a business portfolio, which include an organization’s autonomous divisions ( activities, or profit centers).
The BCG or growth- share matrix imposes a two- dimensional analysis on management of Strategic Business Units: a comparative analysis of business strength and an assessment of the environment. The business strength measure is the business;s Relative Market share. The environmental measure is the Market Growth Rate.
Below is the graph of the Growth Share Matrix that are very popular in analyze the condition of the market.
Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off.
Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.
Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom to dogdom.
Barito Pacific has many SBU ( Strategic Business Unit) that the Strategic Business Unit focus on Petrochemical, Timber, and Property.
1. PT TUNGGAL AGATHIS INDAH WOOD INDUSTRIES (Logging and Timber Manufacturing)
PT Tunggal Agathis Indah Wood Industries (“TAI WI”) was established in 1980, engaged in logging and timber manufacturing business.
2. PT KIRANA CAKRAWALA (Industrial Timber Plantation)
PT Kirana Cakrawala (“KC”) was established in 1992 to engage in the management of an Industrial Timber Plantation
3. PT MANGOLE TIMBER PRODUCER(Logging and Timber Manufacturing)
PT Mangole Timber Producer (“MTP”) was established in 1970. MTP engaged in logging and timber manufacturing business.
4. PT KALPIKA WANATAMA (Industrial Timber Plantation)
PT Kalpika Wanatama (“KW”) was established in 1992 to engage in the development of timber industrial estates as well as in related activities that enhance the productivity of the estates as well as to preserve the natural environment within and surrounding those estates.
5. PT GRIYA IDOLA (Property)
PT Griya Idola (“GI”) was established in 1989, originally under the name of PT Griya Idola Real Estate. It is now the owner and operator of the Barito Pacific twin towers office complex in Jakarta. GI has a land bank totalling 13,582 sqm in a prime district of Jakarta.
6. PT CHANDRA ASRI (Petrochemical)
(“Chandra Asri” or “CA”) is the leading petrochemicals producer in Indonesia. Since 2005 the overall utilisation rate has reached 100%. It has a dominant market position with over 50% share of the olefins market, with strong local customer base.
7. PT STYRINDO MONO INDONESIA (Petrochemical)
Acquired by CA in April 2007, PT Styrindo Mono Indonesia (“Styrindo Mono Indonesia” or “SMI”) is the only local producer of styrene monomer, mostly sold to domestic market with a total market share of 80%. SMI exported its remaining products to China and other Southeast Asian countries.
8. PT TRI POLYTA INDONESIA Tbk (Petrochemical)
Barito Pacific acquired a controlling interest of PT Tri Polyta Indonesia Tbk (“Tri Polyta” or “TPIA ”) in June 2008. The company produces polypropylene, including homopolymer, random copolymer, and impact copolymer materials which are commonly used food packaging and plastic utensils. The main raw material provider for TPIA is CA.
9. MARIGOLD RESOURCES Pte . Ltd (Holding Company)
THE BCG MATRIX BARITO PACIFIC TBK
Above is the BCG Matrix of the Barito Pacific Tbk subsidiary.
For the stars is PT Griya Idola because it units have high market share in a fast-growing industry. PT Griya Idola is not the biggest property development because it have many competitor like Lippo, Bakrie, Ciputra but it has a good prospect in the future. In the Stars what they need to do is maintain well the stars to become the cashcow.
From the Timber sector of the Barito Pacific Tbk like PT. Tunggal Agathis Indah ,PT. Kirana Cakrawala, PT. Mangole Timber, PT. Kalpika Wanatama I categorize this subsidiary into the Question marks because thus consume large amounts of cash, but because they have low market shares they do not generate much cash. With the environment issue the activities of the timber sector will be disturb like they have to closed their two branch in Maluku. In general some of them can become a stars because they have a good performance like PT Mangole Timber that they include in the company that have the biggest area to the timber resources. This company have a good opportunity to become star.
I think the example for the dog maybe is Marigold Resources, Pte. Ltd. It is operate in Singapore and I can't get the data about this company, and I think it's not a big company that can give a big contribution to the Barito Pacific Tbk. From the data we can see that the Barito Pacific are very professional in developing the petrochemical industries.
Different with PT. Chandra Asri, PT. Styrindo Mono Indonesia, and PT. Tri Polyta that three of them are become the biggest petrochemical sector in Indonesia. PT.Chandra Asri they dominantly catch the market of the Indonesia they become the only manufacturer of olefin in Indonesia that is further cracked into ethylene, propylene, py-gas, and mixed C4. Chandra Asri thereby enjoys as strategic foothold, at the very top of the petrochemicals supply chain for a whole range of manufacturing industries in Indonesia. PT.Styrindo Mono Indonesia maintains a market share of approximately 80% of the domestic market for styrene monomers and is a key player in export markets of China and Southeast Asia. The company plays an important role in Barito Pacific’s goal to become a fully integrated resource based company. PT. Tri Polyta is not different that currently the largest manufacturer of polypropylene resins in Indonesia. Polypropylene resins are produced in the forms of homopolymer, random copolymer and impact copolymer, including film and yarn resins, all of which are widely used for the manufacturing of food packagings, garments and fabric bags, tobacco wraps, paper laminations, woven sacks and many others. These three subsidiary has become cashcow of the company because they have been maintained well and very productive also have high market share These units typically generate cash in excess of the amount of cash needed to maintain the business. They have been in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
CHAPTER IV
Conclusion
Based on the analysis the movement of the market return from Barito Pacific compare to IHSG . The rate of return of Barito Pacific Tbk is highest, that makes Barito Pacific Tbk promising and profitable in the stock market. From the lowest and highest daily stock market Barito Pacific has an unstable in their daily stock data they daily stock return is too fluctuate, and it will make the investor doesn't save. In general, sometimes it has a very positive amount, but in the other time it have a very negative amount, although the average it’s still okay that's in the positive amount.
The stock return will influence the risk of company. If the return of daily market and stock change in large range, the risk will be lower. Reversely when the daily market of stock was change in few number risks will be higher. It means when the average of return in Barito Pacific Tbk is small so the risks will be high. And if we see from company daily stock return and IHSG the standard deviation are 0.026579 and 0.012870943. So the conclusions, the return and risk for the daily stock return are higher than IHSG. In General The return and risk of the daily stock return and daily market return(IHSG) are low so the risk and return of the company low.
BCG Matrix can be used in Analyze the condition of the company business to know in where level the business today. Barito Pacific Tbk is the company that have many SBU (Strategic Business Unit) that can be analyze using BCG Matrix.
References:
http://finance.yahoo.com/q/hp?s=BRPT.JK
http://www.barito-pacific.com/index.php/about/index/3
http://www.barito-pacific.com/index.php/about/index/4
http://stocks.about.com/od/whatmovesthemarket/a/Whatmovesmarket.htm
http://www.scribd.com/doc/2382132/BCG-Matrix-KFC
http://en.wikipedia.org/wiki/Growth-share_matrix
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