2nd Asignment

BERLIAN LAJU TANKER, Tbk
Profile
PT Berlian Laju Tanker, Tbk is an International Liquid Cargo Shipping Company, established in 1981, with operations primarily throughout Asia and the Middle East, as well as Europe. The Company's principal activities comprise of local and overseas shipping including tanker, barges and tugboat operations. It is operating 60 tankers with total tonnage of 1.53 million DWT and is the largest provider of seaborne transportation of liquid cargoes in Indonesia, one of the largest in the intra-Asian chemical tanker segment, both by tonnage and by number of vessels, and has the third largest sub-20,000 DWT chemical tanker fleet globally. In 1990, the Company became the first shipping company in Indonesia that listed its shares on Jakarta Stock Exchange and Surabaya Stock Exchange. The company is also listed in Singapore Exchange Securities Trading Limited starting the third quarter of 2006.
The Company has extensive international networks in terms of operation, sales and marketing. In addition to operational offices in Jakarta, Singapore, Hongkong, Bangkok, Taiwan, Shanghai, and Beijing, the Company also operates marketing offices in Dubai to serve Middle East customers, and Glasgow, to serve European customers. Holding to the motto of “Delivers with Safety, Competitiveness and Timeliness”, the Company has always been committed to quality service for all its customers. This commitment quality has let to the implementation of International Safety Management Code/ISM Code as well as achievement of ISO 9001:2000 certifications. All these support the Company in developing its future business.


ANALYSIS
After collecting data about the daily of closing stock price of the company and the daily of closing market index from January 2, 2008 till March 31, 2010. We try to calculate the daily stock returns and daily market returns in Berlian Laju Tanker Tbk. We can discuss based on two points of view, because there are two market indexs used that are Indonesia Composite Index (IHSG) and LQ45 Index. From that calculation, we get data about the highest and lowest for daily stock returns and daily market returns that based on IHSG and LQ45. Firstly, we discuss about stock return in every year started from 2008 until 2010. We can see there are 0.2 as the highest value in 2008 and -0,135338346 as the lowest value.
In 2008 there are many bad events, let’s take Lehman Brothers as one of the example. Collapsing of giant companies that bring harm to all stock companies in the world. Many companies suffer losses or even collapse. BLTA includes in one of the companies that suffered many losses. This may be reflected in its low value of stock returns in 6th November 2008. The lowest value of stock returns is -0.135338346. And 0.2 as the highest value in 17th December 2008. This is because the dollar value drops drastically and can not be controlled. In addition, many companies also are doing on their “buy back” toward stocks that have been invested to purchase shares of Lehman Brothers.
In 8th May 2009, BLTA has increased the value of the stock return to be 0.25 because of Berlian Laju Tanker Tbk (BLTA) can repair their company condition became better and known as “a leading of tanker operator in the world”. Founded in 1981 as domestic players Pertamina oil tankers, the company then evolved into tankers for chemicals and gases. BLTA not only growing in terms of products, but also in market coverage, network marketing and of course also with their tanker fleet. This is all necessary because over time, the company does not only rely on Pertamina but could even be the choice of oil and chemical companies leading the world, such as Exxon Mobil, Shell, BASF, SABIC and Dow Chemical. Such capabilities became stronger after BLTA acquire other tanker operators, including Tankers LLC of the United States in the year 2007. Other than through acquisitions, the company is also increasing worldwide network with the establishment of subsidiaries, among others: UK GBLT Ship management (UK) in Glasgow, GBLT Ship management Pte Ltd in Singapore, and Gold Bridge Shipping Ltd. in Hong Kong. To support that network, the company also has a presence in Bangkok, Shanghai, Beijing, Behai, Mumbai, Dubai, Westport, and Sao Paolo. So at this time, the company has a fleet of large tankers and in large amount as well as end-to-end operation, including in the face of tight regulation in various parts of the world's tanker operators associated with the business. With this extensive network, do not be surprised if the composition BLTA customers throughout the world, with no single customer accounts for more than 5 percent of company revenue, except for Pertamina for 6 percent. Although these companies get 90 percent of its income from abroad, but it seems the potential for growth in Indonesia has also become a target forward for BLTA, was in line with laws mandating the use of Indonesian flagged vessels to transport cargo between ports in Indonesia. With the condition that Pertamina currently still use foreign-flag operators in 70 percent of their rented boat, the company saw significant growth potential of this national market. But there is a case about Indonesia that decides to leave OPEC. This condition gives bad impact to BLTA. But because of BLTA in 2009 has good conditions, so the lowest stock price is not too bad. It decreased to -0.098901099, it’s still better compared to 2008.
In 8th February 2010, stock returns at the lowest point, -0.045454545 this is happening due to piracy in one of the carrier hired by the company BLTA. MT Pramoni that has been rented by PT Berlian Laju Tanker Tbk (BLTA) alleged to have been hijacked in Gulf of Aden waters located in the Indian Ocean between Yemen on the southern Arabian Peninsula and Somalia in Africa. There is no loss suffered by Berlian Laju Tanker company because they were helped by a guard the international waters. But this case also have bad impact to the stock price. Investors become afraid to invest their money in BLTA. They think if this situation would make companies suffer loss BLTA That gives impact to its stock price. In 19th January 2010 is the highest value, stock return at 0.057971014 because BLTA also have trade relations with China and in several years this economy of China is progressing quite significant. There is also a positive impact because they have BLTA trade relations. In 2010 many goods From China enter into Indonesia through the waters. China uses BLTA freight service, this causes the value of stock returns BLTA experienced a fairly stable.

Market Returns (IHSG and LQ45)
In our group, the changes value of market returns IHSG and LQ45 have the same reason because LQ45 includes in IHSG. LQ45 is the merger of 45 companies in Indonesia and IHSG is the merger of all companies in Indonesia so the changes value of market returns in IHSG definetly gives impact in LQ45. In 2008 Bakrie Sumatera Plantation Tbk (UNSP) that includes in three top of biggest company in Asia has problem about LUMPUR LAPINDO in 2006 that has long impact to the value of stock returns. This condition also has impact to the market returns. Then they try to fix this bad condition. It proves in 2009 that has better value of market value. LQ 45 stocks, shares of the Bakrie Group, and the shares of Astra Group still has the appeal of "special" for certain investors. So do not let one select and hopefully this Bullish trend continues.
Since the year 2001 - 2002, when the dot com giants of America reduced its contribution to their domestic economy, the American economy began a campaign, by bringing a new prima donna, namely the housing sector (real estate). Various government policies made to encourage the development of this sector, the developer is given full support in infrastructure and promotion of, and positive issues regarding real estate begin exhaled throughout American society. The project is managed properly. Since that year in the U.S. housing prices have continued to rise significantly, people are competing to invest in this area because of the level of lucrative profits, and the American general public use the housing loan to purchase their new home. This sector continues to billow, vigilance in the credit management of a slump. Population that should only be able to buy a standard house, promised hereafter by companies engaged in the "Quick Credit" to buy a new house or a bigger house. By the time they were asked where they would be able to pay their mortgage, the credit agency that still junior replied that home prices will continue to rise, and they can either re-Agun (refinanced) their home with a larger number of 2-3 year then, with the advantages getting cash to pay credit and other purposes. Consequently, the euphoria occurred, increased consumerism, and the housing sector to be excellent. Starting in 2004 - 2005 for financing the company needs funds, they combine their credits in the cluster-cluster and sell it to banks in America. Then, the financial experts on Wallstreet launched a new idea, which combines the credit clusters in one lot a larger container, called the letter "sub-prime mortgage." This letter is traded through the stock market and purchased by investment companies around the world, with a very large capitalization value, and continues ballooned in value from time to time as housing prices continue to rise. Actually, since 2006 there have been several experts expressed concern that they will this euphoria, but their worries disappeared storm of optimism. This situation continued until the end of 2007. In accordance with the laws of life, the bubble finally burst in late 2007. Total debt payments increasingly large can not be borne more by some of American society, and bad loans in the housing sector begins to appear. The situation worsened in 2008. The U.S. government tries to resolve internally, but financial markets global are not be influenced by too much. Because pessimism began to spread, stock indices started blocked and suffered a decline, until a new peak in October 2008, when several large investment banks such as Lehman Brothers suffered severe financial difficulties and fell, the world's financial markets experienced snap and come down. Because of the causes are fundamental, then the growing crisis of the financial crisis into an economic crisis that also attack the real sector. Unemployment increased, the threat of layoffs to be large, declining purchasing power, and it quickly spread throughout the world because America contributes about 30% of world GDP, today. Then, what about Indonesia? Like other countries, the first sector is directly affected by the stock market and money market. Foreign investors pulled their funds so that experienced a bearish market, the funds in the money market became very tight, especially in the fourth quarter 2008, stock index fell, and the rupiah sluggish. Actually, the Indonesian government did not remain silent. Several policy packages rolled out, starting with a reduction in the BI rate in the financial sector, the use of foreign reserves in the money market, stock exchange rules. Meanwhile in the real sector, these policies led to the nationalization of the economy (meaning: the domestic supply is absorbed by domestic demand). In addition, acceleration of infrastructure projects is also made to absorb and retain employment business field, which is expected to provide a multiplier effect across other sectors. Meanwhile, joint provision of emergency funds is also done with other Asian countries. Well, until now, the situation may not be too bad, because some effects of this crisis can still be "detained" by both the government and Indonesian entrepreneurs. However, in my opinion, these circumstances will not be passed in a short time and the extent to which government and Indonesian businessmen able to "restrain" their burden, so that follow-crisis spread to the whole society down and cause big domino effect. Since October 2008, world’s economy is shacked that caused by Great Depression which gives bad impact in America.
In 2010 there is a repairement about the American market. The U.S. economy will start growing the first quarter of 2010. Europe in the second quarter of 2010. The improving economy will stimulate demand, Indonesia's exports will recover. It’s include requests for a commodity (except gold) and an energy. Lately there are still depressed due to the strengthening of commodity dollar, but predicted oil prices will come back as economic growth (real demand) into the range of 80-100 USD / barrel.

DATA for stock returns and market returns (IHSG and LQ45)

Stock Returns (BLTA)
Highest
2008-12-7 0.2
2009-5-8 0.25
2010-1-19 0,057971014
Lowest
2008-11-6 -0.1353383466
2009-7-9 -0.098901099
2010-2-8 -0.045454545

Market Returns (IHSG)
Highest
2008-3-3 0.079212072
2009-1-5 0.060446744
2010-3-17 0.032459447
Lowest
2008-11-8 -0.103753671
2009-6-18 -0.036532977
2010-2-8 -0.028630043

Market Returns (LQ45)
Highest
2008-12-15 0.105327948
2009-1-5 0.076367714
2010-3-17 0.038331589
Lowest
2008-10-8 -0.118639863
2009-1-15 -0.041936618
2010-2-5 -0.032853701

BETA
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.
There are 5 types of beta :
1. A beta of 1.0 means that the security's price, historically, has moved with or has been equally as volatile as the market - when the market is up 10%, the security's price has generally also been up 10%.
2. A beta higher than 1.0 means that the security's price has been more volatile than the market - A beta of 2.0 means that when the market is up 10%, the security's price has generally been up by 20% (and down by 20% when the market is down 10%).
3. A beta lower than 1.0 means that its price has been less volatile than the market - A Beta of 0.5 means that when the market is up 10%, the security's price has been up 5% (and down by 5% when the market is down 10%).
4. A beta of 0 means that the stock is independent of the market and its movements are not correlated.
5. A negative beta means that the stock moves inversely with the market. When one rises, the other falls and vise versa. Precious metals and inverse ETFs often have negative beta values since their values tend to increase as the market falls.

Beta (BLTA – LQ45) 0,758465804

Beta (BLTA – IHSG) 0,921421833



We can see that both value of beta is less than 1, that means the risk is small. The changes of stock returns value almost consistant. This condition is good for investors who wants to invests their money with safety ways because of the small risk. But, they also can’t get more benefits from BLTA company because the increasing of stock values is not change so much. For investors who want to get much profits for the stock wouldn’t choose BLTA to invests their money because it’s a defensive company. Defensive stocks are not very sensitive to market fluctuation.

Hypothesis testing of regression
Hypothesis testing typically begins with some theory, claim, or assertion about a particular parameter of population. There are 2 kinds of hypothesis testing; one sample tests and 2 sample tests.
Based on CAPM (Cost Asset Pricing Model), risk premium equal to the stock’s beta times the market risk premium. Therefore,
Market risk premium = market return – risk-free interest rate
Expected return on stock = risk-free interest rate + (beta * market risk premium)
r = rf + β (rm – rf )
From the data, we get average stock return -0.00192%. This value would be used to test whether the formula above accepted or not.
H0 = r = -0.00192%
Ha = r ≠ -0.00192%
For significant level = 5% (0.05)
Z0.05 = -2.85 (from table 2.2 the cumulative Standardized Normal Distribution)
H0 rejected if Z*< -2.85 or Z* > 2.85
Using LQ45-BLTA data
For β = 0.76, and rf ranged between 6.5% - 9.5% (changed from 2008-2010), expected return value is 0.00386%.
Z* = (0.00386% + 0.00192%) / 0.0349% = 0.1656
Since Z*< -2.85 and Z* > 2.85, H0 accepted
Using IHSG-BLTA data
For β = 0.92, and rf ranged between 6.5% - 9.5% (changed from 2008-2010), expected return value is 0.00195%.
Z* = (0.00195% - 0.00192%) / 0.0346% = 0.1118
Since Z*< -2.85 and Z* > 2.85, H0 accepted

CONCLUSION
According to our group, we can say that Berlian Laju Tanker Tbk Company includes in defensive company, because the value of fluctuation has small changes and the beta’s value is less than 1. It also means that BLTA not too influence in IHSG and LQ45. We can see from both value of stock returns and market returns. But IHSG and LQ45 have special relation because LQ45 includes in IHSG and gives big contributions in the changes value of IHSG.













REFRENCES
• www.wikipedia.com
• www.google.com
• www.yahoo.com
• Statistic Managers using microsoft excel Fifth edison
• Fundamentals of corporates Finance