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], 22 June 2009
Highlights
National
·
Government
freezes creation of new administrative units until year-end
Politics
·
Constitutional
Court orders re-count on Batam
Terrorism
·
Former
terrorism convict calls for more help with rehabilitation
Security
·
Finance
ministry backs budget increase for Armed Forces
Law & order
·
Extradition
treaty to be signed with
Health
·
Climate
change health impacts already being felt: Ministry
Economy
·
Business
starts to respond to emerging recovery
·
Government
to push ahead with financial oversight agency
Business briefs
Macroeconomy
·
Growth
forecast for 2009 trimmed to 4.3% from 4.5%
·
New
debt sales aims to net Rp2 trillion to fund deficit
Investment
·
British
American Tobacco to pay $494 million for fourth-ranked Bentoel
State concerns
·
Government
opens new export financing agency
·
Potential
seen for creation of production base for low-cost cars
SOEs
·
Fertilizer
producer PT Pupuk Kaltim to issue Rp1 trillion in bonds
Private sector
·
Komatsu
heavy equipment sales move forward 45% in May
Banks
·
Mandiri,
ANZ Panin join move to lower interest rates
Power
·
Operating
costs lower next year as PLN moves away from oil-fired generation
Oil & gas
·
Government
expected to extend contract for Husky gas project
Mining
·
PT
Indika Energy purchase of contractor PT Petrosea approved
NATIONAL
No new regions
until end of year: Home Minister
Home Minister Mardiyanto said the government will not
approve any bid for regional divisions until the end of the year, citing its
focus on the presidential elections, Antara reported.
“We have received 20 proposals to form new regions but no
new administrations will be approved until the end of 2009,” Mardiyanto said.
Mardiyanto said the government was evaluating the
performance of newly-formed regions and would revoke regional divisions if it
was found they failed to improve welfare within two years.
Meanwhile, all three presidential candidates said they are committed
to revising the regional autonomy law, already altered twice in the last
decade, to outline a clear relationship between the central government and
regions.
Incumbent President Susilo Bambang Yudhoyono said despite some
progress having been achieved with regional autonomy, many problems and
shortcomings still have to be addressed, including a revision of the 2008
regional administration law.
While the central government will maintain its key role,
governors and regents, through their administrations and local wisdom, should
attract investors to boost their regional economies, he said.
Former President Megawati Sukarnoputri said the law needed to
be revised because it contained too much "unclear language", which
led to multiple interpretations and subsequent friction between regional heads
and
Vice President Kalla and his running mate Wiranto also
promised to revise the law, claiming they would extend regional autonomy to
include villages.
The final goal should be to improve people's social welfare,
rather than create positions for local elites in the executive and legislative
bodies, Kalla said.
Space agency
to test satellite rocket next week
The National Space and Aeronautics Institute (LAPAN) said it
plans to launch its RX-420 rocket for the first time on July 2, Kompas reported.
The RX-420 rocket is the forerunner to
The announcement was made by Research and Technology
Minister Kusmayanto Kadiman in
During a meeting with Commission VII of the House of
Representatives, Kadiman said the launch of the RX-420 rocket, with a range of
100 km, will be conducted by LAPAN, which had successfully launched a RX-320
rocket in 2008.
He added that the RX-420 rocket possessed more power than
the RX-320 and its range could be increased to 190 km if the rocket's weight
was reduced.
"Its cruising range is equivalent to the distance
between
Apart from the scheduled launch in July, there are plans to
carry out further test launches in 2010 and 2011.
In 2014, LAPAN will have finished all its experimental
rocket launches and will have already developed a rocket with a range of 300 km
and speed of 7.8 km/sec allowing it to carry a small satellite into space, he
said, adding that this would be a “monumental achievement.”
POLITICS
Constitutional Court orders vote re-count in Batam
The
The vote recount must be carried out no later than 60 days
after the verdict is issued,
The verdict stems from a suit filed by the Indonesian Democratic
Party of Struggle over alleged vote miscalculations.
On June 16, the same court also ordered the Rokan Hulu KPUD
in Riau to hold new legislative elections in Tambusai and
The General Election Commission (KPU) said it is considering
the possibility of holding the court-ordered legislative repeat polls in
conjunction with the July 8 presidential election.
TERRORISM
Police should
do more on terror rehab: Ex-convict
The National Police’s anti-terror unit needs to help more on
the de-radicalization programs for released terrorists so that they can
reintegrate into society, a former extremist said.
Many former convicts were having difficulties in finding
jobs after their release as they were already labeled as terrorists, said
Usman, 28.
“The police should help provide more opportunities for
people like us,” he said.
Usman was released last month after serving a four-year jail
term in
He also acted as a courier for militant Abdullah Sunata, who
was convicted for weapons ownership and withholding information about escaped
terrorist mastermind Noordin M Top.
Usman said he intends to start a new life, studying at an
open university and opening a poultry farm in his hometown of Sukoharjo,
He said he has renounced his hard-line views and is now more
open-minded to differences in society.
SECURITY
Ministry spokesperson Teuku Faizasyah said the government
had sent a letter to the Malaysian government asking it to speed up
negotiations on the decades-old dispute.
"This would be our 14th negotiation," Faizasyah
said, adding
The Ambalat controversy has again fueled anti-Malaysian
sentiment in
The Indonesian government has said it will fight for the
maritime area, despite
Finance
Ministry backs defense increases: Indrawati
Finance Minister Sri Mulyani Indrawati said she has no
objection to raising defense spending by up to Rp10 trillion ($1 billion) next
year, but she said budget discipline must be applied in the procurement of
military equipment to avoid a “shaky” state budget, The Jakarta Globe reported.
The House of Representatives budgetary committee on Tuesday
agreed to raise defense spending by 8.5% next year from Rp33 trillion this
year, a figure immediately criticized by Defense Minister Juwono Sudarsono, who
said it was far less than he had expected.
The figure is still subject to revision as more meetings
with the government are needed before the House can reach a final figure.
The Rp2.8 trillion ($274.4 million) increase is the second
highest for any ministry after the Education Ministry, but far less than the
Rp7 trillion ($686 million) to Rp10 trillion ($980 million) approved last week
by House Commission I, which oversees defense.
On Wednesday, the Finance Minister attended another hearing
with the budgetary committee, where the defense budget was among the topics
discussed.
At the hearing, Indrawati said: “The Finance Ministry is
ready to fully back the plan, even for Rp10 trillion, if it can be fully
absorbed.”
She also agreed that the morale of soldiers must be
maintained by giving support for their needs and buying new military equipment.
“I understand the intention to raise the budget and I will
maximize efforts to achieve that,” she said, adding that such a huge increase
could cause a wider budget deficit.
LAW & ORDER
Extradition treaty to be signed with
The treaty was made as part of a general cooperation
agreement that was signed by President Susilo Bambang Yudhoyono and his Chinese
counterpart Hu Jintao in April 2007.
In May 2007, the Corruption Eradication Commission also
signed a Memorandum of Understanding (MoU) with
Separately, the House of Representatives has suspended
deliberations to ratify an extradition treaty between Indonesia and Singapore,
which aims at bringing back graft convicts and suspects hiding in the
neighboring country, Tempo reported.
Djoko Susilo, a member of the House of the Commission I on
defense and foreign affairs, said Thursday many lawmakers refused to link the
extradition treaty with a defense agreement between the two countries.
“We need an extradition treaty but not a defense agreement.
Parallel deliberation of defense and extradition agreements was the initiative
of
In April 2007, Foreign Minister Hassan Wirajuda and his
counterpart George Yeo signed the extradition agreement but lawmakers later
raised numerous concerns over the finer details of the defense agreement that
accompanied it.
Lawmaker Gayus Lumbuun said in the absence of the treaty the
government could still cooperate with Interpol to track down the whereabouts of
graft fugitives.
Supreme Court
agrees to enforce environmental laws
State Minister for the Environment Rachmat Witoelar and the
Supreme Court signed an agreement on Thursday to enforce laws in environmental
cases, The Jakarta Post reported.
Under the agreement signed by Witoelar and Chief Justice
Harifin A Tumpa, the Supreme Court will train judges to specialize in handling
environmental cases.
“We may train 100 judges to handle all the environmental
cases in the country. They could try these cases from region to region,” Tumpa
said.
The need for specialized judges to handle environmental
cases is critical, since the environment had long been neglected through poor
law enforcement in
Time magazine wins final appeal hearing
The Supreme Court has cleared Time magazine of charges it defamed the late former President
Suharto by alleging in a cover story that his family amassed a huge fortune
during his rule.
It said Thursday the publication did not have to pay $106
million in damages, The Associated Press reported.
The ruling, which marks the end of the appeals process, was hailed
as a victory for press freedom.
"We have been struggling to find justice for a decade
now," said Todung Mulya Lubis, the magazine's lawyer, adding that he hoped
the decision would give journalists the courage to do their jobs. "It has
been a long road."
Time ran a cover story in its Asian
edition in May 1999 saying Suharto's family had pocketed billions of dollars
during his 32-year reign — the bulk of it from oil and mining, forestry, property,
banking and petrochemicals — and that they'd stashed much of the money
overseas.
Lubis said the article was based on four months' reporting
in 11 countries.
Suharto, who died last year at the age of 87, initially
filed lawsuits against the magazine with the Central Jakarta District Court and
later the Jakarta High Court, both of which ruled in Time's favor.
In August 2007, the Supreme Court overturned the decisions,
prompting the magazine to demand a judicial review.
Supreme Court Judge Hatta Ali said Thursday the article
"did not violate the law" or breach "the press code of
conduct." He said Time owed no
money to the Suharto family.
HEALTH
Climate change health impacts already being felt: Ministry
The likelihood of increases in health risks will escalate in
line with rising temperatures caused by global warming, a Health Ministry
official said, The Jakarta Globe reported.
“Climate change is not a distant issue. It is occurring
right now and it is starting to affect the health of residents and contribute
to premature deaths,” said Wan Alkadri, director of environmental health at the
ministry told a World Health Organization (WHO) seminar Tuesday.
Health issues associated with global warming are going to
hit developing countries and coastal populations the hardest, Alkadri said.
“
Alkadri said climate change is already starting to damage
several local ecosystems and change rainfall patterns, which will likely result
in potentially fatal health problems.
“In Pekalongan,
These extreme events, he said, were tied to higher health
risks as they increase the number of transmittable disease vectors.
Rising temperatures, for example, contribute to more
breeding places for mosquitoes.
“Mosquitoes don’t survive in cold temperatures such as in
the mountains, but as the temperature there has been rising, they can now
survive there and transmit more disease,” Alkadri said.
He said climate change is adding to the burden of
eradicating malaria, dengue fever and other mosquito-borne diseases.
Sharad Adhikary, the environmental health director at WHO in
“No person or nation is immune to the impact of climate
change on human health,” he said.
ECONOMY
Business scents recovery
A number of business sectors appear to be experiencing a
boost, with higher sales in areas such as automotives and heavy equipment,
while banks are starting to lower credit rates, likely increasing the momentum
of recovery.
In the automotive sector, while Suzuki said it was reducing
output due to lower sales, the country's largest car producer, PT Astra
International, booked a 9.5% increase in car in May to 20,891 units.
Another Astra unit, PT United Tractors, said sales of
Komatsu brand heavy equipment rose 45% in May compared to April to 303 units on
orders from the mining and plantations sectors.
The Indonesia Life Insurance Association (AAJI) said it
expects revenue to grow by 30% in the second quarter, slightly higher than
first quarter growth as confidence in the economy is rising,
The government however dropped its estimate for full-year
growth to 4.3% from 4.5% due to the continuing impact of the global financial
crisis.
On the investment front, British American Tobacco paid $494
million for an 85% in the country’s fourth largest cigarette company, Bentoel,
and cell phone manufacturers Nokia and Samsung were both considering setting up
production plants in
The
government meanwhile took a new step to boost exports by establishing the
Indonesian Export Financing Agency (LPEI), to take over the role of state-owned
Bank Ekspor Indonesia (BEI).
On
banking supervision, Finance Minister Sri Mulyani Indrawati said the government
would go ahead with plans to set up a powerful new financial services authority
(OJK), The Jakarta Post reported.
On
Thursday Indrawati said that while the performance of the central bank had
improved, it has not done a "perfect" job.
"We
see in the past 10 years or more since (the) 1997-1998 financial crisis the
evolution of Bank
"The
government and BI have agreed that we have the same aim, that is the monetary
and fiscal authorities have an interest to design an economy in which the
financial system can expand, but it needs to be regulated and effectively
supervised," said Indrawati.
She added
the government and BI were finding the best form of OJK to be implemented in
The OJK
will need to focus on information sharing with other regulators, including the
central bank, to prevent a possible financial crisis, said Mulyani.
"Information
sharing or the flow of information needed by the two authorities should be
managed accordingly to create synergy leading to reactions if there are
problems," she said.
Fuad
Rahmany, the head of (Bapepam-LK), and BI deputy governor Muliaman D. Hadad,
who is in charge of the banking sector, are heading a team tasked to design the
most suitable type or form of OJK to be established in the country.
BUSINESS BRIEFS
MACROECONOMY
2009 growth forecast lowered to 4.3%
The government officially released new macroeconomic
assumptions for 2009 on Tuesday, with growth pegged at 4.3%, lower than the
earlier forecast of 4.5%, The Jakarta
Globe reported.
“This would be the lowest growth in three years,” said Finance
Minister Sri Mulyani Indrawati. On a sector-by-sector basis, the government
expects this year’s growth to be driven by agriculture, which showed resilience
in the first quarter by growing by 4.8%, Indrawati said.
“We are relying on agriculture because the trade and
manufacturing sectors are being heavily dampened by contracting global trade
volumes,” she said.
The agriculture sector, which contributes 14.6% of
The government projected that the manufacturing and trade
sectors, which together account for 41.4% of the country’s GDP, would grow at a
slower pace of 3.3% and 2.7% respectively, after growing 3.7% and 7.5% last
year.
Indrawati also said that fuel and electricity subsidies
would rise due to the rebound of global oil prices, adding that the government
expects oil prices to average $61 per barrel this year, as the commodity would
likely hover at about $70 per barrel in the second semester from as low as $40
per barrel in February this year.
The government had earlier assumed the oil price at $45 per
barrel in this year’s state budget.
Indrawati said the exchange rate was likely to remain at
about Rp10,600 per dollar as foreign capital continued to flow in to the
country.
She also indicated that the deficit could be as much as 2.6%
of GDP this year, above the original assumption of 2.5%, due to increasing
subsidies and a drop in import value-added tax.
The economy may accelerate by as much as 6% next year from
an estimated 4% to 4.5% this year, Indrawati said.
Govt. aims to raise Rp2T from debt sale
The government plans to raise Rp2 trillion ($195.1 million)
from an auction of government debt paper next week to help finance the budget
deficit, the finance ministry said in a statement on Thursday, Reuters reported.
The ministry plans to sell on June 23 treasury bills
maturing in 2010 as well as fixed-rate bonds maturing in 2016 and maturing in
2024.
The ministry raised Rp3 trillion at its last debt auction on
June 9, beating its initial target of Rp2 trillion, on expectations of
improving global economic conditions.
The government has so far raised about Rp96 trillion, or
more than two-thirds of its 2009 gross debt issuance target, which was
increased to Rp142.3 trillion after lower interest rates fanned demand for
bonds.
INVESTMENT
BAT buys 85% stake in Bentoel
British American Tobacco (BAT) said Wednesday it had bought
an 85% stake in PT Bentoel Internasional Investama for $494 million to produce kretek cigarettes, Agence France-Presse
reported.
"This transaction represents an excellent strategic
opportunity to enter the very large and growing Indonesian kretek market and will provide a platform for future growth,"
BAT's Asia-Pacific director John Daly said in a statement.
BAT will also offer to buy the rest of the Bentoel shares it
doesn’t own, and expects to complete the transaction by August, the company
said.
Bentoel is the fourth largest cigarette maker in
London-based BAT, which makes
Nokia, Samsung mull cellular phone plants
Electronic companies Nokia of Finland and Samsung of South
Korea are exploring the possibility of building cellular phone manufacturing
and assembling plants in
Director for Telematics Affairs at the Industry Ministry
Ramon Bangun said Nokia was serious with its plan to build a factory in
Samsung also saw good prospects in developing a factory in
"Samsung will only apply for a factory business
expansion license from the Capital Investment Coordinating Board (BKPM) because
they already have an electronics factory in
The cellular phone market in the country continues to
increase at an average growth of 15% per annum.
It is estimated that about 80 million cellular phone units
are in circulation. Bangun estimated that 20 million units are sold each year.
He said cellular phone industries would continue to grow in
the future with subscribers estimated to reach 130-140 million, or about 60-70%
of the population.
Bond agency to launch corporate yield curve in Q3
The Indonesia Bond Pricing Agency will launch a corporate
bond yield curve, the first of its kind in the country, later this year, the
agency said in a statement on Wednesday, Dow Jones reported.
The agency will publish a daily index of prices for
corporate bonds with tenors between one and 10 years to provide price guidance
for the secondary market, it said.
"We plan to launch it in the third quarter,"
director Hasan Fawsi said in a statement on the agency's web site.
The agency will monitor only investment-grade corporate
bonds.
"There are currently around 220 corporate bond series
outstanding in
Fawsi said that bond prices will be calculated using a
combination of mark-to-market and mark-to-model formulae.
Earlier this year, the agency launched a government
bond-yield curve that monitors 71 series of local-currency zero-coupon,
fixed-rate, variable rate and Islamic bonds, or sukuk, issued by
the state.
The current lack of an efficient pricing mechanism for
corporate debt in
STATE CONCERNS
Govt.
sets up export financing agency
The
government has taken a new step in its efforts to boost exports by establishing
an Indonesian Export Financing Agency (LPEI), an official said, Asia Pulse
reported on Thursday.
The
establishment of LPEI would change the status of state-owned Bank Ekspor
Indonesia (BEI) to a non-financial institution.
Fuad
Rachmany, head of the Capital Market Supervisory Board and Financial
Institutions (Bapepam-LK), said on Wednesday that
"LPEI
is not intended as a competitor for commercial banks but it is expected to fill
the gap which could not be filled in by commercial banks," he said.
LPEI
needs the support of Bank Indonesia (BI) because it will remain active in the
inter-bank money market although its status is no longer a bank, Rachmany said.
BI deputy
governor Muliaman D Hadad said with the change in the status of BEI into LPEI
based on Law No.2/2009, the BEI was no longer under the supervision of BI.
"This
is a progressive step. We hope that with becoming a non-bank financial
institution BEI would be able to carry out its vision and mission. We also hope
it could pass its transitional period well," Hadad said.
Sales of
low-cost cars could reach 600,000 units a year, said Johnny Darmawan, president
of PT Toyota Astra Motor (TAM), the largest car maker in the country.
Car sales
in the country currently average only 500,000 units a year.
The Association of Motor Vehicle Industries said car sales
in the country are predicted to rise to 40,000 units a month in June and July,
up from a monthly average of 34,000 units in the first five months of the year,
Asia Pulse reported on Thursday.
Sales in the whole of the year are forecast to reach 450,000
units if the trend continues for the rest of the year, the association said.
In the first five months of this year, car sales in the
country totaled 170,679 units, peaking at 35,818 units in May, association
chairman Bambang Trisulo said.
Good
opportunity for auto parts in
"We
have been exporting automotive components to
A number
of Japanese automotive firms had also set up car assembly plants in Indonesia
which used about 75% component parts made locally in models sold in Indonesia
such as the Avanza, Xenia, Terois, Rush, Inova, Forturner, Livina and APV.
He said
industries using local raw materials continued to develop, particularly at
Honda and Yamaha, which used 96% component parts.
"The
vehicles are 96% made in
Cement
market hit by property slump
It was
the steepest contraction in monthly consumption from 3.56 million tons in
April, the association of cement companies said.
Association
chairman Urip Timuryono said private sector property projects and government
infrastructure projects have been the largest consumers of cement in the
country.
A 0.5
percentage point cut in the bank credit interest rate was not enough to boost
the real sector, Timuryono said.
Sales in
2008 were especially high when the people in the regions enjoyed high prices of
commodities like rubber and palm oil, which are unlikely to be repeated this
year, he said.
SOEs
Pupuk Kaltim plans Rp1T bond issue in Q3
State-owned fertilizer company PT Pupuk Kaltim said it plans
to issue as much as Rp1 trillion in bonds in the third quarter of 2009, Dow
Jones reported.
The funds from the bond issue will be used to finance
business expansion, including the development of a fertilizer plant in
Nyakman said the company is in the process of choosing
underwriters for the planned deal.
PTPN
to sell 10,000 tons of sugar to maintain price
A total
of 10,000 tons of sugar, produced by state-owned plantation firm PTPN XI, will
soon be released to the market through state logistics agency Bulog, in order
to increase stocks in the market, an official said, Asia Pulse reported.
PTPN XI
Corporate Secretary Adig Suwandi said on Wednesday that the sugar, which was
milled in 2009, would be sold in the market at a price of Rp7,323 to Rp7,353
per kg.
"We
will release the sugar stocks to the market in an effort to respond to
complaints about shortage of sugar stocks in the market that has relatively
driven up sugar prices," he said.
"This
decision is taken to help maintain the price of sugar at the farmers` level so
that they would continue to be motivated in planting sugar cane," Suwandi
said.
The
distribution to the market of sugar was also done by other state-owned
plantation firms, namely PTPN II, VII, IX, X, XIV and PT Rajawali Nusantara
Indonesia (RNI), he said.
These
companies have agreed on a price based on the latest price auction on the
farmers` sugar production.
PRIVATE SECTOR
Astra books 9.5% boost in car sales
The country's largest car producer, PT Astra International,
booked a 9.5% increase in car sales in May compared to April, indicating demand
has begun to pick up in line with economic recovery, The Jakarta Post reported.
Astra sold 20,891 cars in May, up from 19,080 in April, a
release from Astra on Monday stated.
The figures show that the industry has begun to improve
after previously being hit by reduced demand during the economic crisis.
This was reflected by an increase in overall car sales in
May rising to 35,818 from 34,604 in April and compared to last year, when car
sales reached 50,718 in April and 51,642 in May 2008.
Astra increased its market share to 58% in May from 51% in
April, maintaining position as automobile sales market leader.
The country's automotive industry posted a new record last
year, selling 607,000 new cars, up nearly 40% from a year earlier with Astra
then taking a 59% market share.
UT’s Komatsu sales rise 45% in May
PT United Tractors (UT),
UT sold 303 units of Komatsu vehicles in May from 209 units
in April, the company said in an e- mailed statement Tuesday.
Sales fell 27% from a year earlier. Komatsu is the world’s
second-largest maker of earthmoving equipment.
Kalbe
Farma plans tender offer for unit
Pharmaceutical
firm PT Kalbe Farma said on Friday it plans to hold a tender offer for 31.81%
of the shares in its trading unit PT Enseval Putera Megatrading, Reuters reported.
Kalbe Farma
said in a statement published in Investor
Daily it had set a tender offer price of Rp870 ($0.839) per share for
725,239,000 shares in Enseval.
Based on
Reuters calculations, Kalbe Farma, which currently has a 58.19% stake in
Enseval, may need to set aside around Rp631 billion ($61.02 million) to buy the
shares.
PT
CIMB-GK Securities Indonesia on Friday upgraded Enseval's rating to outperform
from neutral and raised its share target price to Rp1,050 from Rp715
previously.
Kalbe
Farma plans a tender offer period of thirty days.
Insurance industry sets 30% growth target
The life insurance industry expects revenue to grow by 30%
in the second quarter, slightly higher than first quarter growth as confidence
in the economy is rising, the Indonesia Life Insurance Association (AAJI) said,
The Jakarta Post reported.
AAJI executive director Stephen B. Juwono said Tuesday the
industry's total premium revenue would likely reach Rp34.19 trillion ($3.35
billion) by the end of the second quarter, compared to Rp26.3 trillion recorded
in the same period a year earlier.
"The quick recovery in the capital market has grown our
investments beyond what we expected in the first quarter,” Juwono said.
Insurance companies usually reinvest their collected premium
revenues in other investment instruments such as the stock market, bonds and
bank deposits.
BANKS
BI
signals another key rate cut
Bank
Indonesia (BI) acting Governor Miranda Goeltom signaled another rate cut but
also said inflation this year could fall below 5%, the bottom end of the
central bank's forecast for end-2009 inflation, Reuters reported.
"It
could be even lower than the bottom of the range. That could be reached earlier
than later ... 5% could be reached in the next two months or even next
month," she said on Thursday.
Goeltom
suggested that BI would still cut rates again after a combined reduction of 2.5
percentage points since December.
"For
this year, we think there is still room (to ease monetary policy), but not much
anymore," she told Reuters in an interview in
“The size
and timing of any move would be decided upon the latest information that we are
going to collect at the end of the month," she said, adding that BI’s rate
decisions would also be affected by other factors.
These
included rate differentials with other economies, the health of local financial
institutions and sectors of the economy, like manufacturing, which have been
hit by the global downturn.
Rate
differentials can impact the rupiah, which attracts some foreign investment
based on
The
current central bank rate of 7%, for example, has a significant premium over US
rates that are virtually zero.
Goeltom
said the rupiah -- up 18% against the dollar since March -- had been behaving
normally and the central bank was more concerned about volatility than the
specific level of the currency.
BI cut
its policy rate on June 3 by 25 basis points to 7% and analysts had factored in
one more rate cut this year to 6.75% to support the slowing economy.
ANZ
Panin, Mandiri cut interest rates
PT ANZ
Panin Bank and state lender PT Bank Mandiri have decided to cut their credit
interest rates to follow the lead of Bank
Retail
banking director of ANZ Bank Panin Anthony Soewandy said the bank would cut its
credit interest rates by 50-125 basis points in the next two weeks from the
present levels of 13.5%-14%.
Soewandy
said the bank is encouraged to cut the interest rates with the increase in the
amount of its third party funds.
Meanwhile,
Agus Martowardoho, the president of Bank Mandiri, said the country's largest
lender in assets already cut its interest rates by 50 basis points. Starting
June 15 rates have been reduced to 11%-15%.
The bank
has also cut its deposit interest rate by 50 basis points to around 6%, he
added.
Bank Permata raises $100M from 12-year note
PT Bank Permata has raised $100 million from its 12-year
subordinated medium-term notes (MTN) to strengthen its capital, the bank said
in a statement on Tuesday, Reuters reported.
Increased capital will give the bank greater flexibility to
take advantage of growth opportunities, Bank Permata's president director
Stewart D Hall said.
The bank said Standard Chartered Bank and Astra
International were the main buyers of the medium-term notes.
A consortium comprised of Standard Chartered and Astra
International controls Bank Permata.
BCA maintains 15-20% credit expansion target
PT Bank Central Asia (BCA) has signed new credit agreements
worth Rp16 trillion ($16 billion) this year, prompting it to maintain its
credit expansion target of 15%-20% in the second half of this year, Asia Pulse
reported.
“The credit commitments are being processed, therefore,
credit expansion in the second half of this year will go faster,” said Jahja
Setiaatmadja, the president of the country's largest private bank.
He said demand for credit in the first months of the year
was lower than debt servicing by borrowers.
Large disbursements of new credits in the second half of the
year will make up for the low credit expansion in the first months of 2009,
Setiaatmadja said.
By March 2009, BCA's outstanding credit shrank to Rp107.27
trillion from a
POWER
PLN
sees lower oil consumption
State power
company PT PLN forecast on Thursday its consumption of oil products would fall
nearly 40% in 2010 as new coal-fired power plants come on stream, Reuters
reported.
"The
fall in fuel consumption is because some coal-fired power plants are expected
to begin operations at the end of 2009 and early 2010," PLN director
Murtaqi Syamsuddin told reporters.
PLN
expects combined consumption of oil to fall to around 5 million kilolitres (kl)
in 2010 from an estimated 8 million kl in 2009.
Syamsuddin
said that delivery of gas to power plants in
PLN’s 10,000
MW program to meet electricity demand which is growing at around 10% a year will
reduce the use of expensive crude oil as a feedstock, officials said.
PLN's
president director, Fahmi Mochtar, said previously the company consumed around
10 million kl of oil in 2008.
PLN to issue rupiah bonds in H2
State power company PT Perusahaan Listrik Negara (PLN) plans
to issue rupiah-denominated bonds sometime in the second half of the year to
top up funding for power projects, a company executive said Thursday, Dow Jones
reported.
"We have to look at...how much we need (to raise) and
the pricing before setting an issuance target,” PLN vice president director
Rudiantara told reporters.
Rudiantara said that of the Rp32.37 trillion in
rupiah-denominated funding that PLN needs this year for its crash program to
provide 10,000 MW of generating capacity, it has procured all but Rp4.5
trillion.
Rudiantara didn't specify whether PLN would seek to fund all
of that using rupiah bonds.
He also said that of the $5.8 billion dollar-denominated
funding PLN requires this year for the crash program, only around $900 million
has yet to be procured. He declined to comment when asked if PLN would consider
issuing dollar bonds this year.
MRT, PLN sign deal to power train route
PT Mass Rapid Transit (MRT) on Monday signed an MoU with
state power company PT PLN on supplying power to the project, The Jakarta Post reported.
Purnomo Willy, general manager of PLN’s
“We will use gas isolation technology that will enable us to
build the power plants inside the stations to accelerate the electricity
supply,” Willy said after the signing ceremony.
For the initial phase, PLN will provide 50 MW of electricity
to support the MRT, which is scheduled for construction starting next year and
is expected to be up and running by 2016.
PLN will use its Jawa-Madura-Bali networks to supply
electricity to the MRT, he added.
The MRT is expected to be able to carry up to 340,000
passengers a day and take 28 minutes to travel from Lebak Bulus to Dukuh Atas,
with an estimated headway of 4.5 minutes at each stop.
The MRT will also link up with other transportation
services, including Transjakarta buses.
OIL & GAS
24 new oil, gas blocks on offer
The Energy and Mineral Resources Ministry on Tuesday
officially offered 24 new oil and gas blocks in a drive to bolster energy
output and investment, The Jakarta Globe
reported.
Evita Legowo, Director General of Oil and Gas at the
ministry, said the blocks would be awarded through tenders and direct appointments.
Seven blocks will be offered directly, while 17 will be
offered through regular tenders, Legowo said.
Offshore blocks located in South Sulawesi, West Java and
Most of the 17 blocks up for offer are located in the
eastern part of the country, including the
The
She said proposals for direct appointments would be accepted
until July 30, while regular tender bids would be accepted until October 13.
The government expects to bring into state coffers at least
$56.5 million in signing bonuses from the 24 new oil and gas blocks put on
offer on Tuesday, Legowo said..
Govt. may extend Husky gas block contract
The government is considering extending a contract for a
natural gas block in
"Several companies have proposed extending their
contracts, including Husky, and we will look carefully at whether we will
extend or not," Evita Legowo, Director General of Oil and Gas at the
Energy and Mineral Resources Ministry, told reporters.
The contract for Husky and
Husky signed a gas supply agreement in 2007 with state gas
distributor PT Perusahaan Gas Negara to supply 126 trillion British Thermal
units (btu). The gas is due to come from offshore
Legowo also said the government is studying a proposal from
a unit of
"We are looking at the new terms and conditions for
extending the Mahakam block, including possible participation of state-owned
oil and gas company PT Pertamina in the block," Legowo said, adding that
Pertamina was interested in participating in both the Madura and Mahakam
blocks.
Total and Japan's Inpex each hold a 50% of stake in the
Mahakam block, which supplies most of the gas for Bontang liquefied natural gas
plant.
Total issues tenders to develop
Total SA has invited contractors to bid for four tender
packages to develop three discoveries in South Mahakam block, off
The first two tender packages comprise the fabrication of
topsides and jackets for three tripods. Two separate packages were tendered for
the transportation and installation of the three tripods and the installation
of the offshore pipelines.
The three tripods are to be installed into the East Stupa,
West Stupa and
Global Industries, Ltd, Saipem SpA, PT NISCONI and Hyundai
Heavy Industries Co., Ltd. are interested to participate in the pipeline
installation package. Local contractors will be looking at the packages
relating to the three tripods.
The fabrication and installation job is likely to occur from
2010 resulting in production start-up in 2011 or 2012.
The
MINING
Indika’s plan to buy 81.95% of Petrosea approved
Coal miner PT Indika Energy Wednesday got approval from its
shareholders to buy an 81.95% stake in PT Petrosea from Clough International
Singapore Pte. Ltd. for an indicative purchase price of $83.8 million, Dow
Jones reported.
"We expect to complete the acquisition of Petrosea by
June 30, and then will make a tender offer for the public shares we don't own
within three months," Indika's finance director Aziz Armand told
reporters.
He said the tender offer price will be $1.01 per share.
Armand expects Indika's revenue to rise to up to $400 million this year
following the acquisition of Petrosea, from $220 million a year earlier.
"Excluding the acquisition of Indika, our revenue in
the first half this year would only hit $100 million," he added.
Timah eyes spot tin sales on price climb
PT Timah, the world's biggest integrated tin miner, may
boost spot sales if tin prices climb to $18,000-$20,000 per ton after a fall in
sales earlier in 2009, Abrun Abubakar, the firm's corporate secretary, told
reporters on Wednesday, Reuters reported.
"But we still have to wait and see if prices can reach
that level. We don't want to push sales and then prices suddenly fall,"
Abubakar said.
The firm sold 46,438 tons of refined tin in 2008 with about
90% accounted for by contractual sales and the remainder by spot sales.
In trading on the London Metal Exchange last week, the price
of tin MSN3, which is used in food packaging and soldering of electronic
components, surged to an eight-month high of $15,870 a ton following a rally in
base metals.
The price
is still around 40% below an all-time high of $25,500 a ton in May last year. Tin
prices stood at $15,150 to $15,350 a ton on Wednesday.
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[1] This Trade and Investment News is a publication of the Coordinating
Ministry for Economic Affairs of the