0 Sampoerna Becomes Most Valued on IDX

Tobacco giant HM Sampoerna is now the most valued company listed on the Indonesia Stock Exchange after the company’s rapidly rising share price pushed it past automotive firm Astra International. The total market capitalization of Sampoerna, which is controlled by tobacco company Philip Morris USA, reached Rp 317.8 trillion ($32.9 billion) on Thursday, accounting for 7.2 percent of the total market capitalization of companies listed on the local bourse. 

Astra International, the largest listed conglomerate, ranked second with Rp 313.7 trillion in market capitalization, or 7.1 percent of the market total. The 463 listed companies have a total capitalization of Rp 4,455 trillion. Merlissa Trisno, an analyst with security brokerage and research company CLSA Indonesia, said in a note to clients on Friday that since Philip Morris’s partial acquisition in 2005, Sampoerna has continuously gained market share in Indonesia. Shares in Sampoerna have gained 22 percent so far this year, following a 51 percent gain in 2012. 

In comparison, Astra’s shares have gained 2.6 percent so far this year but only gained 2 percent last year amid investor concern on the risk of its palm oil plantation, coal mining and heavy equipment businesses. According to data from research company Nielsen, Sampoerna’s market share reached 35.3 percent in 2012, from 32.5 percent in 2011. Merlissa said Sampoerna’s success was due to its strong brand equity, competitive pricing, and growth in the mild cigarette segment, which is still gaining market share despite its high base. 

One of Sampoerna’s brands, A Mild, held 12.1 percent in market share in 2012, up from 11.1 percent in 2011. “We believe strong wage growth, particularly in urban areas, to continue driving trade-up to premium brands, helping sustain share gains,” Merlissa wrote. She added that market share gain is critical since the cigarette market as a whole registered only 2 percent growth in 2012. Governments at all levels have recently taken some public health measures to combat tobacco consumption.

source : the jakarta globe