International Business Machines Corp.
) power systems and storage solutions are expected to boost Bank
Ekonomi Raharja's ("BER") IT infrastructure to support the
Indonesian bank's expanding clientele.
Headquartered in Jakarta, BER is owned by HSBC. BER has
presence in 29 cities with 97 branches across Indonesia. IBM's
industry proven power systems coupled with storage products and
services will upgrade the bank's IT infrastructure, helping the
bank to serve its clients better. Moreover, IBM will help BER to
expand services to rural and remote places through the bank's
mobile and online banking facilities.
IDC estimated early this year that Indonesia will be among the
top five 'IT spending hotspots' this year. The IT spending growth
was expected to be largely backed by the banking segment. IDC
expects the banking sector's IT budget to grow by 14.3% in 2012.
Another research by Business Monitor International predicted that
IT spending in Indonesia would grow 11% in 2012 to $5.9
We believe that IBM's significant presence in the region and
its wide array of IT solutions will be incrementally beneficial
for the company in the long term. IBM has offices in Jakarta,
Semarang, Surabaya, Makassar and Medan, to which the company
recently added Bandung.
We believe that IBM remains well positioned for long-term
growth based on its four key growth initiatives: smarter planet,
growth markets, business analytics and cloud computing, which are
expected to deliver at least $50 billion in revenues by fiscal
2015. We believe that IBM's strong product pipeline, expansion
into emerging markets and continuous acquisitions will help it to
achieve this target going forward.
However, unfavorable foreign currency, increasing competition
), and stiff year-over-year comparisons in the hardware segment
may hurt profitability in the near term.
Currently, IBM has a Zacks #3 Rank, which translates into a
short-term Hold rating.
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