THE
COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
Tel: (021) 351-1178
Fax: (021) 351-1186 Website: http://www.ekon.go.id
Trade and
Investment News[1], 9 February 2009
Highlights
National
·
Hilary
Clinton ‘reaching out to Muslims’ with
Politics
·
Survey
shows strong support for continuation of Yudhoyono-Kalla
team
·
Economic
crisis unlikely to be issue at polls, says VP
Terrorism
·
Singaporean
suspect linked to regional terrorist network, police witness says
Security
·
Fatal
protest in
·
Law & order
·
House
of Representatives passes law on human trafficking
·
Aceh-Nias reconstruction agency outlines record on corruption
Economy
·
Projection
for economic growth in 2009 revised downward to 4.7%
·
Bank
Business briefs
Macroeconomy
·
Central
Bank sees year-end inflation at 5%
·
Government
sticks to tax cuts to assist business community
Investment
·
ASEAN
investors may own up to 51% of shipping firms
State concerns
·
President
calls on business to avoid retrenchments
SOEs
·
PT
Telkom 2008 net profit predicted to fall by 10%
·
PT
Jasa Marga to seek debt to
expand toll road operations
Private sector
·
PT
Astra International finance unit to issue bonds for credit expansion
Banks
·
Central
bank tightens rules on shareholder intervention
·
Shariah sector disbursements reach Rp38 trillion in 2008
Power
·
PT
Bakrie Power to build 30 MW geothermal plant in eastern
Oil & gas
·
New
Pertamina chief to boost upstream output, improve
distribution
·
Tangguh LNG plant starts commissioning process
Mining
·
LG coal mining operation in
NATIONAL
New
"It's the biggest Muslim-population country in the
world," State Department spokesman Robert Wood told reporters who asked
why she included
Clinton, who will also visit
In his inauguration speech on January 20, President Barack Obama vowed to seek a
"new way forward" with the Muslim world "based on mutual
interest and respect," after eight rocky years under his predecessor
George W. Bush.
Indonesian authorities are now allowing the UN refugee
agency access to about 400 men from
The decision announced Friday comes days after a boat
carrying nearly 200 men belonging to Myanmar's Rohingya
minority, a Muslim group that faces severe discrimination in the predominantly
Buddhist country, was discovered off Aceh.
Another boat, also with about 200 Rohingya
aboard, was discovered in early January.
"We are prepared to engage the UN to deal with those
who are not willing to voluntarily go back to their home country," said Teuku Faizasyah, a Foreign
Ministry spokesman. "We are willing to do our best to find a way for the
remaining Rohingya to be settled in a wise
manner."
However, Faizasyah said that the
men would not be allowed to stay in
"Our policy remains the same, we are not a country for
refugees, nor are we a place for refugees to live temporarily," he said.
Govt., House agree to halt
creation of new regions
President Susilo Bambang Yudhoyono has called for a moratorium on the creation of new
administrative regions, following the recent death of the council speaker in
Yudhoyono’s call was greeted with immediate
support by House of Representatives Speaker Agung Laksono.
North Sumatra Legislative Council Speaker Abdul Aziz Angkat died of a heart attack on Tuesday,
just hours after an angry mob assaulted him during a violent protest demanding
the creation of a new
The crowd of around 2,000 protestors was incensed at the
council’s decision to delay a plenary meeting to discuss recommending the
establishment of the new province. The postponement had been decided upon after
the required number of councilors failed to show up.
“I have spoken about this matter with speakers of the
House of Representatives and regional legislative councils. I said let’s
have a moratorium; let’s first evaluate the creation of new administrative
regions, past and present,” Yudhoyono said on Friday.
“There are basic requirements that must be met to create
a new region. The establishment of some new regions has been a success, but
others haven’t. I therefore ask all parties to consider this issue
seriously.”
Govt. shuns plans to
convert more forests
The State Ministry for the Environment has instructed local
administrations to cancel any plans to convert natural forest areas into
commercial sites, claiming floods and landslides could worsen if clearing
activities continue, The
Last week, the Forestry Ministry said it had received an
unprecedented number of requests from local administrations for permits to
convert remaining forest areas into plantations and other profitable commercial
projects.
Soenaryo, an expert from the Forestry
Ministry, said his office had been investigating the potential consequences of
approving these proposals, and the results were alarming.
The environment ministry said Tuesday local administrations
should be focusing on conserving forest areas if they wanted to protect their
people in the long term.
"It is time for local administrations to think in the
long term rather than simply focus on the economic benefits of the short term,
because the threat of natural disasters will most likely increase with climate
change in the future," said Masnellyarti Hilman, deputy director for
nature conservation enhancement and environment degradation control at the
environment ministry.
She promised financial incentives for those regencies which
agreed to protect their forests.
POLITICS
Survey shows high support for SBY-Kalla duet
A survey by the Strategic Development and
“The survey covered 2,118 respondents from all over
the country,” Puskaptis director Husin Yazid said Thursday.
However, 30.5% of the respondents said Dr. Yudhoyono needs to pick a new vice presidential candidate,"
Yazid said.
Around 10.66% of respondents said the Yudhoyono-Kalla
pair should not be given another chance together and only 0.85% supported Kalla to run for president.
Yazid said that Yogyakarta Governor
Sultan Hamengkubuwono X was the next favorite running
mate for Yudhoyono with 17.43%.
The survey also showed that 31.27% of respondents said they
will vote for candidates who will lower the prices of fuel and other essential
commodities.
Another 29.91% respondents wanted candidates to be “down
to earth”, 25.46% wanted them to fix education, health and employment
problems while 8.31% of respondents said that ending corruption was the number
one issue.
Dr. Yudhoyono’s Democratic Party said on Friday that it
is content to wait for the results of April's legislative polls before
officially selecting its vice presidential candidate to run with Yudhoyono, The
Jakarta Globe reported.
Democratic Party chairman Anas Urbaningrum
said the party has other priorities. "Surveys have shown that our position
is good," Urbaningrum said, "so we want to
improve upon this and elevate our position even higher."
An Indonesian Survey Institute poll conducted in December
found the Democratic Party leading in popularity, supported by 23% of 2,200
respondents, ahead of the PDI-P's 17%.
Economic crisis unlikely a poll
issue: VP
The global economic slowdown is unlikely to affect the
outcome of
Speaking to The Straits
Times during his visit to
When asked if he would run for the presidency, Kalla merely laughed and tapped the reporter on the elbow
to signal the end of the brief conversation.
Kalla, who was in
He said it had weathered the current global slowdown
relatively well as it was not as dependent on exports or exposed to foreign
financial capital as compared with other countries in the region.
TERRORISM
Singaporean linked to
terrorist network
A National Police officer told a Jakarta district court on Thursday
that terror suspect Muhammad Hasan alias Fajar Taslim, a Singaporean man arrested last year in Indonesia,
was part of a terrorist cell operating within Indonesia, The Jakarta Post reported.
The terrorist network plotted to strike Changi
airport with a hijacked plane, witnesses said.
“We received information from the Singaporean police
that Taslim was part of Jemaah
Islamiyah’s (JI)
“However, Singapore intelligence managed to detect
them before they could carry out their actions,” Yudi Rahmaputera,
a police officer who helped arrest Taslim in
Palembang, South Sumatra, told the South Jakarta District Court.
“They fled to
Rahmaputera said Taslim
fled
The nine terror defendants are undergoing three separate
trials at the same court.
They are accused of planning to bomb the Bedudul
café in Bukittinggi, West Sumatra, and
planning the assassination of several Christian figures in
SECURITY
Fatal protest sparks
election security fears
The protest shocked many Indonesians while calling into
question the ability of the police to maintain public order.
With parliamentary elections due on April 9 and presidential
elections on July 8, the head of the national police said security would be
stepped up to ensure peaceful voting.
Indonesian Police Chief Bambang Hendarso
Danuri said he would reshuffle the heads of North
Sumatra province and
"This is a lesson for us, and my order to all
Indonesian police is that police have to be assertive in the 2009 elections and
not tolerate such action," Danuri said.
Abdul Aziz Angkat, council speaker
for
Security to be tightened near
new
The island of Nipah, Indonesia's
outermost territory, has been given a fresh lease on life as an agreed baseline
for Indonesia's maritime border with Singapore, after extensive reclamation
work carried out by the government, a Foreign Ministry official said, The Jakarta Post reported.
Arief Havas Oegroseno, the Foreign Ministry's Director General for International
Treaties and Legal Affairs, said the government had worked on the
revitalization of
Concerns have arisen that if the island disappears below sea
level during high tides, it would risk
A previous government report said Nipah
only measured a total of 0.62 hectares when the tide came in, and expanded to
60 hectares during low tides.
"The island has now been brought far above sea level,
just like before. We can already have buildings developed there and it has also
been divided into several zones for different purposes," Oegroseno said.
Navy chief of staff calls
for creation of coast guard
Indonesian Navy Chief of Staff Admiral Tedjo
Edhy Purdijatno has called
for the rapid establishment of a national Coast Guard in order for
Purdijatno called for a single body to be
given sufficient authority to manage existing capabilities and personnel and
equipment from various authorities tasked with maintaining territorial
integrity and upholding state laws in Indonesian waters.
Purdijatno said that current maritime security
and law enforcement arrangements were not as effective as they could be and
that the various relevant authorities were too egotistical when it came to
performing their duties, prioritizing their own interests over national ones.
He called for greater operational cohesion when carrying out
maritime security and law enforcement duties.
"It does not matter what the body is called, Coast
Guard or something else, it's time for it to be
established. The body needs to meet international and national demands and
requires effectiveness and efficiency in securing and enforcing law in
Indonesian waters," said Purdijatno.
LAW & ORDER
House passes bill on human
trafficking
The House of Representatives has ratified a protocol to
prevent, suppress and punish those involved in human trafficking, especially of
women and children, The Jakarta Post reported.
Once enacted, the protocol will allow law enforcers to
charge those responsible for people smuggling with the maximum possible
sentence in a move to crack down on trafficking syndicates.
"The House has supported this bill because it believes
in strengthening the capacity of law enforcers to fight human trafficking. I am
also expecting to see draft regulations being written up to back officials
working in the field," legislator Fachruddin Djaya from the Reform Star Party told a plenary meeting
Tuesday.
The bill requires the government to take responsibility for
providing protection to victims of human trafficking, particularly women and
children, and compliments articles within the United Nations Convention against
Transnational Organized Crime concerning people smuggling.
Under the UN Convention, all UN member countries are
required to forward all intelligence information regarding human trafficking to
the countries dealing with smuggling problems.
"Internally, law enforcement agencies will be
strengthened and legal assistance to victims increased," said Adji Farida Padmo
of the Democratic Party.
To date,
BRR points way to clean
dealing
The Aceh-Nias Reconstruction and
Rehabilitation Agency (BRR) announced that a total of 129 companies previously
engaged in local reconstruction projects had been blacklisted by the agency
over the past four years, The Jakarta
Globe reported.
BRR head Kuntoro Mangkusubroto said his agency found that some of the
companies won their contracts by bribing local officials, while others had
performed poorly and appeared unable to deliver on the terms of their
contracts.
The blacklisting, he said, was based on public complaints. "So
far, we have received 913 complaints involving 470 government reconstruction
projects," Mangkusubroto said, adding that 27
cases later ended in convictions, while the rest were still being investigated
by police.
Sixty percent of the companies were involved in housing
projects for people who lost their homes in the 2004 tsunami, while the rest
dealt with infrastructure and economic-facility projects.
"This is how we prevented corruption in the
reconstruction projects," Mangkusubroto said.
"We had to show contractors we meant business in fighting
corruption."
The former energy and mineral resources minister distanced
the BRR's central office from the irregularities. "The transactions in
question happened between BRR's local work units and contractors and
suppliers," he said.
Mangkusubroto said that unlike a number of other
agencies and ministries, BRR automatically revoked the questionable tenders and
opened fresh bids as soon as irregularities were uncovered. The rapid
termination of the contracts helped prevent more than Rp715 billion ($61.5
million) in potential losses to the state, he said.
ECONOMY
2009 growth target lowered
to 4.7%
The government has revised its economic growth target
downward to 4.7% from the previous level of 5% due to slackening global demand
for Indonesian products, Finance Minister Sri Mulyani Indrawati said Thursday, Antara reported.
The worst-case scenario for
"The total value of exports could grow by 0% to 5%,
much lower than the 9% to 10% in 2008," she said.
The initial growth target was no longer realistic as the
decrease in export and import volumes has been biting since October, earlier
than expected, Indrawati said.
Inflation for full-year 2008 was recorded at 9.17% and fell to
0.07% on-month in January, The Central Bureau of Statistics (BPS)
reported.
Exports slumped 9.57% month-on-month in December, after
falling 11.09% in November. On an annual basis, value dipped 20.56% in
December, compared with a 2.36% fall in the previous month, BPS said.
Import value fell 11.67% on a monthly basis in December,
after falling 17.87% in November.
Bank Indonesia Senior Deputy Governor Miranda S. Goeltom confirmed the country's economy might be expanding
more slowly than expected.
She said the fiscal stimulus prepared by the government
could significantly boost public consumption and help to sustain the desired
level of economic expansion.
Both Goeltom and the finance
minister said inflation was likely to come in at 5% in 2009, while Indrawati
added that the rupiah had found a new equilibrium at around Rp11,000 to the dollar, after weakening due to global factors.
Bank
The
government meanwhile replaced Ari Soemarno as
president director of state oil and gas company Pertamina,
installing upstream director Karen Agustiawan in his
place.
Agustiawan pledged after her inauguration on Thursday to increase oil
production and to improve the distribution of oil products in the country,
Reuters reported.
Indicators:
|
|
November |
December |
December
08/December 07 |
Cumulative
2008 |
|
Total exports |
$9.61 billion |
$8.69 billion |
-20.56% |
$136.78 billion |
|
Non-oil & gas exports |
$8.17 billion |
$7.45 billion |
-11.59% |
$107.9. billion |
|
|
December (y-o-y) |
December (m-o-m) |
January (y-o-y) |
January (m-o-m) |
|
Inflation |
11.06% |
-0.04% |
9.17% |
-0.07% |
|
|
Full year 2006 |
Full year 2007 |
First half 2008 |
Third quarter 2008 |
|
GDP growth |
5.5% |
6.3% |
6.4% |
6.3% |
|
Tourist arrivals |
November |
December |
Growth/loss (m-o-m) |
Growth/loss (y-o-y) |
|
|
524,200 |
610,500 |
16.46% |
17.69% |
Source: Central Statistics
Agency
BUSINESS BRIEFS
MACROECONOMY
2009
inflation estimated at 5%: BI
Inflation in 2009 could be at the lower range of the Bank
Indonesia (BI) projection of 5% to 7%, BI Senior Deputy Governor Miranda S. Goeltom said on Thursday, Antara
reported.
"BI’s latest assessment indicates inflation can
be at the lower range of BI’s projection," she told a hearing with
House of Representatives Commission XI, which deals with financial affairs.
She said that inflation could be curbed to a lower level of
5% as a result of reduced imported inflation and declining international
commodity prices as well as minimal output gap pressures and controlled
inflation.
Goeltom said that inflationary pressures as
a result of administered commodity and volatile food prices would decline as
well. "This will be in line with guaranteed supplies and food distribution
in 2009," she added.
She said the impact of fuel oil cuts in December 2008 and
January 2009 was reflected in the deflation recorded in the past two months. If
this was followed by a cut in transport fares, inflationary pressures could be
minimized.
Goeltom said she was convinced that the
inflation target set at 6.2% in the state budget would be achieved.
"These conditions are expected to give a chance to BI
to lower its rate and banks are also expected to follow suit, including
BI’s three-month certificates (SBI)," she said.
The Central Bureau of Statistics said on Monday that consumer
prices rose 9.17% on-year in January and fell 0.07%
on-month, Agence France-Presse
reported.
Finance Minister Sri Mulyani Indrawati said the result was
"the best" in many years and put
Govt. to maintain income tax cuts as
economic stimulus
The Finance Ministry maintains that
income tax cuts will remain to serve as a fiscal stimulus for the national
economy in 2009, an official said on Friday, Antara
reported.
"Fiscal stimuli in any country
are tax cuts and spending," said Anggito Abimanyu, chief of the Fiscal Policy Affairs of the Finance
Ministry.
He said the government maintained
its policy that tax cuts would be a fiscal stimulus instrument for the national
economy. "They are actually company` taxpayers` taxes. There are companies
which have a large number of employees. They can save costs from not paying
their taxes which will increase their profits," Abimanyu
said.
Darmin Nasution, the Finance
Ministry’s Director General for Taxation, said the regulation regarding
the incentives, which was formulated to ease the burden on companies amid the
ongoing financial crisis, would be introduced on February 10 at the latest, The Jakarta Post reported.
“We are running simulations to calculate tax
incentives needed in each sector so that we know the proper allocations,”
Nasution said after a hearing with Commission XI, adding that not all
businesses will receive the incentive.
The Finance Ministry said the allocation for the incentive would
amount to Rp6.5 trillion from the government’s Rp71.3 trillion ($6.3
billion) fiscal stimulus plan.
Rupiah’s weakening due to
global factors: BI
The continuing weakening of the rupiah was mostly caused by
global factors, Bank Indonesia (BI) Senior Deputy Governor Miranda S. Goeltom said on Friday, Antara
reported.
"At the international level, US dollar supplies are
tight so that almost all currencies in the world have weakened, including the
rupiah," Goeltom said.
She said each time countries grouped in the Organization for
Economic Cooperation and Development (OECD), or the
"If the markets are on alert it means they do not want a tight US dollar
supply to happen. At home, US currency supplies are tight and as a result the
rupiah has weakened," Goeltom said.
Referring to the tentative assumption of the rupiah value at Rp11,000 per US dollar in the revised state budget, Goeltom said that the assumption was an annual average rate
which she said was achievable.
BI cuts benchmark rate to 8.25%
Bank Indonesia (BI) Governor Boediono and the BI board voted
unanimously on Wednesday morning to cut interest rates by 50 basis points from
the current 8.75% to 8.25%, in line with analyst expectations, Nasdaq reported.
The rate cut was the third in as many months for the central
bank, which raised rates to a record 9.50% last November to combat runaway
inflation. The bank pared rates to 9.25% in December and then to 8.75% in
January before Wednesday's cut.
"Several indicators show that the global economy is
gloomier than estimated several months ago," BI said in a statement.
"The impact is being felt in the nation, particularly in sectors related
to foreign trade."
On Monday, the Central Bureau of Statistics announced that
the value of the nation's exports declined 9.57% month-on-month in December,
after falling 11.09% in November. On an annual basis, value dipped 20.56% in
December, compared with a 2.36% fall in the previous month. This was the
biggest decline since 2001.
Import value dropped 11.67% on a monthly basis in December,
after falling 17.87% in November. In December, exports were worth $8.69
billion, while imports totaled $8.72 billion.
The central bank expects growth to weaken to as little as 4%
this year, the slowest pace since 2001, from an estimated 6.1% in 2008.
INVESTMENT
ASEAN investors allowed to own 51% of shipping
firms
Investors from ASEAN member countries are allowed to have up
to 51% of shares in shipping and port operating companies, Transport Minister Jusman Syafii Djamal
said, Asia Pulse reported on Wednesday.
However, based on the regulation to be effective next year,
the investors have to buy the shares from share markets in the country or
abroad, Djamal said.
The regulation also requires a reciprocal offer from the
investor's country of origin, and the foreign investor is required to comply
with the cabotage principle, he said.
Under the cabotage principle, only
ships flying Indonesian flags are allowed to carry domestic cargoes.
Joint venture shipping companies, therefore, have to fly the
Indonesian flag with Indonesian crew if they want to operate in the country, he was quoted as saying by Bisnis Indonesia.
STATE CONCERNS
President
asks businesses to avoid layoffs
President Susilo Bambang Yudhoyono has asked national industries to reign in
spending in a bid to avoid mass layoffs when the economic downturn takes
effect, The Jakarta Post reported.
“The government has been working hard to save the real
sector and our business world. We have provided various incentives, including
tax cuts and excise discounts, so that businesses will survive,” the
president said Thursday during a visit to Japan-based printer manufacturer PT
Indonesia Epson in Cikarang, Bekasi.
“I hope businesses can take
the appropriate measures and strive for efficiency so they need not dismiss
workers,” he said.
President Yudhoyono also ordered
local administrations to temporarily accommodate sacked informal sector workers
to reduce the impact of the global recession. He said the ongoing financial
crisis had led to domestic industries dismissing around 250,000 workers so far.
Govt. may extend Bulog’s authority to
sugar, cooking oil
The government may extend state logistics agency Bulog’s current sole authority of stabilizing the
price of rice to other crucial commodities, including sugar and cooking oil, The Jakarta Post reported.
President Susilo Bambang Yudhoyono on Wednesday said that stabilizing the price of
rice during a time of skyrocketing global food prices had been among Bulog’s major achievements last year.
“I appreciate Bulog’s
role in stabilizing rice prices in our country. However the prices of (other
basic commodities) like cooking oil are hardly stable,” Yudhoyono said during a surprise visit to Bulog’s headquarters in
“Therefore, I’m asking Bulog
to think of what it can do to stabilize the prices of other commodities, as
long as it benefits our economy, our efforts to stabilize prices and keeps the
inflation rate at a good level.”
Yudhoyono said he had ordered Bulog executives and the minister for state enterprises to discuss
the issue.
2008 foreign tourist arrivals reach 6.43M
The number of foreign tourists who visited
Of the 6.43 million foreign tourists, 6.23 million arrived
in the country through 11 main and other gates while 194,500 were transiting in
He said the 2008 foreign tourist arrival figure represented
an increase of 13.24% compared to the 2007 figure of 5.51 million.
Rosidi said the total amount of foreign
exchange the foreign tourists spent in
The average occupancy rate of star-rated hotels in 14
provinces in December 2008 was 49.69%, a slight increase from 48.35% in the
preceding month.
SOEs
Telkom 2008 net may fall more than 10%: CFO
PT Telekomunikasi
He said
declining cellular tariffs last year reduced revenue from cellular services,
which traditionally contribute more than 30% to the company's total operating
revenue.
"Revenue for January to December of 2008 would only
grow below 10% due to lower cellular services tariffs," he added.
Last year, Telkom's cellular revenue fell to Rp250 per
minute from Rp1,000 per minute in 2007, Asno said. Telkom is due to report its 2008 result in
March.
In an effort to increase revenue, Telkom plans to acquire a
majority stake in an Iranian telecommunication company for $500 million in the
first half of 2009. He didn't name the company or its subscriber base.
"We plan to cooperate with an Iranian pension fund to
realize the acquisition plan which is expected to be completed in the first
half of 2009," Asno said.
Jasa Marga to
increase debt burden for 2009
Indonesia’s largest toll road operator, PT Jasa Marga, is seeking Rp2.82
trillion ($248.16 million) in bank loans to cover more than half of its capital
expenditures this year, The Jakarta Globe
reported.
The company has budgeted Rp4.7 trillion in capital
expenditures for this year, up 30% from last year’s Rp3.6 trillion.
The company plans to spend Rp2.3 trillion to construct five
new toll routes, and use the rest to increase capacity on its existing toll
roads and pay for routine costs.
“Our capex this year should
reach Rp4.7 trillion, of which 40% should come from our internal cash, and the
rest from bank loans,” Reynaldi Hermansyah, Jasa Marga’s finance director.
Frans Sunito, Jasa Marga’s president director, said that the company had
secured several commitments from state-owned banks like PT Bank Mandiri, PT Bank Negara
Jasa Marga,
Sunito said, had Rp6 trillion of existing debt, of which bonds account for
Rp4.3 trillion, with the remainder in bank loans set to mature between 2011 and
2013.
The company holds roughly Rp3 trillion in fresh cash brought
in by its initial public offering in late 2007 which could be used to finance
its expansion plans.
With more Jasa Marga-operated
toll roads expected to open this year, and
expectations of higher tolls and increased traffic, Sunito said that the
company expected to post a 12% revenue growth in 2009, from an estimated Rp3.3
trillion last year to Rp3.69 trillion.
PRIVATE SECTOR
Astra Sedaya
to issue bonds to bolster financing business
PT Astra Sedaya
Finance, a subsidiary of PT Astra International, will issue bonds valued between
Rp500 billion and Rp750 billion this month to support expansion of its
financing business, Antara reported on Friday.
Bunarto Tjondro,
president of the company, which offers credits for the purchases of Astra cars,
said the bond market had begun to improve with normal yields.
Tjondro told Bisnis Indonesia the three cuts in the Bank Indonesia benchmark interest
rate to 8.25% had led to bond interest rate cuts.
The bond issue has been planned
since last year but was delayed until market conditions improve, he said.
The company has named four
underwriters - PT HSBC Securities, PT Indo Premier Securities, PT ING
Securities Indonesia and PT Mandiri Sekuritas - to handle the sale of the bonds.
PT Astra Sedaya
Finance is set to spend Rp12.5
trillion on financing business this year, down from Rp13.8 trillion last year.
Pefindo affirms idA+
ratings for BCA Finance
Credit rating agency PT Pefindo
has affirmed its idA+ ratings for PT BCA Finance and
the company’s bond II/2007 worth Rp500 billion, declaring them to have
stable prospects, Antara reported.
The ratings reflect the strong support the company had from
controlling shareholders, the company`s strong business position, and
controllable quality of its assets, Yulia Ansari and Hendro Utomo, PT Pefindo analysts, said
in a press statement on Tuesday.
However, the ratings were constrained by the company’s
slight margin and increasing business and credit risks due to the unfavorable
macroeconomic conditions, they said.
PT BCA Finance could settle its obligation on bond II/2007
Series A of Rp100 billion due on February 27 by using
internal cash and credit facilities from several sources which have not been
used, amounting to Rp548.5 billion as per October 2008.
Bank Central Asia owns 99.6% of PT BCA Finance’s
shares, and the remaining 0.4% is owned by BCA Finance Limited.
The company focuses its businesses on consumer financing,
especially car financing, with 36 branch offices in 32 cities in
BANKS
BI revises rules to stop bank shareholder interventions
Bank Indonesia (BI) has revised commercial banking
regulations (PBI) as its response to a series of recent scandals in which
shareholders inappropriately intervened in key decisions at several financial
firms, The Jakarta Globe reported.
"Controlling shareholders may not use bank shares as
collateral in any third-party deals," BI ruled, according to a statement
released on Monday. "Controlling shareholders are also prohibited from
influencing decisions related to a bank's daily operations."
BI did not reveal why it added the two clauses in its latest
PBI revisions, but the changes, which went into effect on January 27, but they followed
several scandals in which the Capital Market and Financial Institutions
Supervisory Agency (Bapepam-LK) has alleged that
controlling shareholders inappropriately influenced senior executives at a
number of financial firms.
The central bank's PBI revisions did not affect any existing
regulations, including a Rp3 trillion minimum
investment requirement for start-ups. The new regulations apply to shareholders
with stakes of more than 25% — as stated by an earlier rule — as
well as to any minority shareholders who wield significant influence over key
decisions at a bank, whether directly or indirectly.
Investors who hold majority stakes in banks are also now
required to submit documents to BI stating that they have never filed for
bankruptcy or served on a board that was found to be legally responsible for a
bank bankruptcy within the previous five years.
Shareholders must also prove that they do not own stakes of
more than 25%, either individually or with others, in any other commercial
banks.
Shariah loan disbursement Rp38T in
2008
Bank Indonesia (BI) Governor Boediono said Wednesday that shariah banking loan disbursement was Rp38 trillion in
2008, or approximately 3% of total national banking loans during that period, StockWatch reported.
"The shariah banking loan was
disbursed through 1,470 branches of national shariah
banks," Boediono said during the opening of the Shariah
Economy Festival in
He said shariah loan disbursement
under the people's business credit (KUR Syariah)
program was Rp326 billion, while shariah banking
assets by the end of 2008 stood at Rp50 trillion or approximately 2.1% of total
national banking assets.
"Shariah banking has recorded
promising growth, but there is need to make it grow further," Boediono
said.
He said shariah banking is
expected to play a greater role in the years to come in boosting the national
economy.
"There has been considerable progress. In April 2008,
the House of Representatives ratified the Law on government shariah
bonds, so today we have more investment instruments which can provide
alternative financing for development," he added.
BII 2008 net profit up 36%
BII, controlled by
Consumer loans grew 36% to Rp12.1 trillion, while commercial
loans rose 22% to Rp13.1 trillion last year, it said. The bank’s
non-performing loan ratio was 1.56% at the end of 2008.
BTN, SMF launch mortgage-linked products
State lender Bank BTN and state secondary mortgage facility
provider PT Sarana Multigriya
Financial (SMF) launched
The securities, named Collective Investment Contract
Asset-Backed Securities (KIK EBA), are a fixed income security with quarterly
amortized principal payments and a coupon rate of 13% and an average maturity
period of 2.6 years.
The offering period will last until February 11 with a total
value of Rp100 billion ($8.6 million) in the first phase, sold at Rp5 million
per unit.
It will be traded electronically in the Indonesia Stock
Exchange on February 12, under the code DSMF-I KPR BTN Class-A EBA.
BTN president director Iqbal Latanro said the securities
could be used as an alternative funding instrument to solve ongoing maturity
mismatch problems, as all this time, BTN must fund long-term mortgages, which
are usually 10 or 15 years, using mid-term financing less than seven years in
duration.
BTN selected its own 5,060 residential mortgage accounts to
be used as the underlying guarantee for the securities, which must meet 32
criteria in order to ensure maximum protection for investors.
"Some of the criteria include adequacy of legal
documents, a minimum mortgage lapse of 18 months, no delinquencies for more
than 30 days, and every loan must be covered by fire and life insurance,"
SMF president director Erica Soeroto said.
"This is the main difference with the
Moody's rated KIK EBA with a "Aaa" (Triple-A) rating which means it is of the
highest quality and comes with the smallest degree of risk.
POWER
Bakrie Power to build 30 MW geothermal plant
PT Bakrie Power said it will spend $120 million on a 30 MW
geothermal power project in Sokoria, Ende, East Nusa Tenggara, Asia Pulse
reported.
The funds will be needed for drilling, exploration,
exploitation and to procure generator turbines, Ali Herman Ibrahim, president
of the subsidiary of the Bakrie Group, said on Tuesday.
Bakrie Power was named winner of a tender in January, a
director at the Mineral, Coal and Geothermal Directorate General, Sugiharto Harsoprayitno, said.
Sokoria is one of nine geothermal
concession areas with a total capacity of 680 MW offered by the government to
investors since last year.
Bakrie Power also has three coal-fired power plants which should
start construction this year and be completed in 2014, Investor Daily reported.
OIL & GAS
New
Pertamina president to raise oil output
The newly
appointed president director of state oil and gas company Pertamina,
Karen Agustiawan, pledged on Thursday to increase oil
production and to improve the distribution of oil products in the country,
Reuters reported.
Agustiawan said that under her leadership the firm would boost oil
output by about 10% to 171,000 barrels per day (bpd) this year, up from 156,000
bpd in 2008.
"From
the perspective of oil products distribution, we will improve security of
supply by increasing effectiveness and efficiency," Agustiawan
said after being inaugurated by State Enterprises Minister Sofyan
Djalil.
Energy
minister Purnomo Yusgiantoro
said the government wanted the new Pertamina chief to
boost the company's oil production and improve fuel supply.
"We
need to address two main issues. First, the increasing oil production because
it will affect state revenue. Second, distribution of fuel and LPG (liquefied
petroleum gas)," he said.
Agustiawan said she would retain her current position as upstream
director.
State
Minister Sofyan Djalil said
Pertamina's biggest current challenge was to increase
fuel production for the domestic market, currently flowing at 150,000 bpd.
"We're
also expecting Pertamina to invest upstream because
it is more profitable than downstream investment," Djalil
said.
Galaila Karen Agustiawan
was born in
Before becoming upstream director, Agustiawan
worked in the president director's office at Pertamina,
and before that in the private sector at Mobil Oil and as commercial manager for
consulting and project management for Halliburton
In March last year, Agustiawan
replaced Sukusen Soemarinda
as director of upstream, covering oil exploration and production.
Papua's Tangguh LNG project starts
commissioning
The long-awaited Tangguh liquefied
natural gas (LNG) project has begun commissioning, with first production
expected toward the end of the first quarter of 2009, BP's head of country for
"On January 27, 2009, Tangguh
introduced gas into train 1 to mark the startup of the LNG processing
facilities. It normally takes eight weeks from startup to produce LNG into the
storage tanks," the source said.
BP is the operator in the project with a 37.16% interest.
The first Tangguh shipment will be
delivered to South Korean companies K-Power and Posco,
which have inked agreements to buy a combined 1.15 million metric tons per year
(mt/year) of LNG for 20 years.
Last October, BP said it expected the projects first
shipment would take place in Q1 2009, but the company now says the first
shipment would be delayed to the second quarter due to technical problems.
The Tangguh project in
The field's proven and probable gas reserves are estimated
at 18.7 tcf, while its proven, probable and possible
gas reserves are estimated at 23.3 tcf.
State gets 65% of oil, gas revenues in 2008
The state received 65% of the gross revenues totaling $54.46
billion from upstream oil and gas industries last year, Upstream Oil and Gas
Regulatory Agency BP Migas said, Antara
reported.
"Nearly $35.39 billion or 65% of the total gross
revenues from the upstream oil and gas industries went to the state
coffers," BP Migas chief R Priyono
told a discussion on Wednesday.
The gross revenues from the upstream oil and gas sector in
2008 represented a 40% increase from a year earlier, he said.
The state revenues from the sector also rose to $35.39
billion from $23.79 billion the year before, he said.
Last year, Indonesia`s oil and condensate output reached
976,778 barrels per day (bpd), accounting for 99.96% of the government-set
target of 977,000 bpd.
Gas production stood at 9,740 million cubic feet per day (mmscfd) or 96.17% of the target of 7,757 mmscfd.
The government has set the target for oil and condesate production at 960,000 bpd and of gas production
at 7,560 mmscfd for this year.
MINING
LG’s
The soft coal mine has estimated coal deposits of more than
16 million tons. It will produce 1.5 million tons a year.
The trading company owns a 40% stake in the mine, while the
remaining 60% is held by local company PT Megaprima Persada.
LG International also has coal mines in
The company expects two other coal mines in
Three firms
in talks for
Churchill Mining PLC said on Wednesday that three companies
are carrying out due diligence regarding investing or entering into a joint
venture in the East Kutai coal project in East
Kalimantan, Reuters reported.
Churchill said it made the announcement following the recent
rally in the company's share price and other market speculation regarding
financing.
"Whilst the due diligence exercises are progressing
well, Churchill wishes to advise that no final deal has been completed at this
point and there can be no guarantee that a deal with any of these companies
will be reached," it said.
Churchill said recent adverse weather conditions and heavy
rainfall has delayed reserve drilling and surveying at
It expects the overall size of the resource, currently
estimated at 1.4 billion tons of thermal coal, to increase substantially, and
for reported reserves to be substantially ahead of the original 100 million
tons expected by management.
Adaro sees 2009 sales at 42-45M tons
Adaro on Wednesday said that sales volume, including
third-party coal trading, rose 9% to 41.1 million tons in 2008, despite bad
weather and weakening demand, while production volume increased 7% to 38.5
million tons.
Adaro, which listed on Indonesia's stock exchange last year,
previously reported a doubling in nine-month net profit to Rp686 billion, while
revenue rose 47% to Rp12.4 trillion. It has not reported full-year results yet.
"We achieved our 2008 production and sales targets,
despite sometimes difficult and challenging conditions such as poor weather at
the beginning of 2008 and deteriorating global economic conditions at the end
of 2008," president director Garibaldi Tohir
said in a statement.
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[1] This Trade and Investment News is a publication of the Coordinating
Ministry for Economic Affairs of the