Monday, 23 April 2018

Tax office trials “prepolulated’ SPTs
Individual taxpayers, particularly employees, could enjoy the convenience of having their annual tax returns (SPT) filled out by the tax office in the near future, as the tax authority continues to improve its services as part of sweeping tax reform. Under the new system, taxpayers can approve and sign SPTs filled out by the tax authority or revise them accordingly. Tax collection from employees’ income tax (PPh21) stood at Rp30.39tr in the 1Q18, a 15.73% yoy growth. The figure reversed a 0.12 yoy contraction in 2017.

Pertamina tightens grip on upstream side
After securing deals for eight blocks last week, Pertamina is set to control nearly half of Indonesia’s oil and gas production, reviving hope for the country in tackling surging fuel consumption. The takeover will subsequently boost Pertamina’s oil and gas lifting or ready to sell production. Throughout 2017, its domestic oil and gas lifting averaged at 238,599 bopd and 1,358.97 mmscfd, respectively accounting for 29.7% and 21.3% of national lifting. All in all, after taking into account additional lifting from the eight blocks, Pertamina’s oil and gas lifting has settled at around 350,058 bopd and 3,002 mmscfd, respectively accounting for 43.5% and 47% of national lifting last year.

Adaro struggles to find loan for US$280m project
Adaro Energy is facing difficulty in securing finance for its power plant project worth US$280m because of the unbankability of its power purchase agreement (PPA) with state electricity firm PLN. The facility is expected to generate 200 megawatts of electricity once it commences full operation by 2023.

Kimia Farma to acquire three hospitals to target BPJS customers
Kimia Farma plans to acquire three hospitals to diversify its businesses. The three hospitals are located in Jakarta, West Java and East Java. “We are targeting BPJS [Health Care and Social Security Agency] participants. In 2019, the health insurance will cover all levels of society. It means we have to be prepared to serve 270 million people,” said Kimia Farma president director Honesti Basyir. He said, the company had prepared between Rp500bn and Rp600bn for the hospital acquisition. He expressed the hope that the hospital acquisition would boost the performance of the company, which had prepared Rp3.5tr in capex this year. From the capex, the company plans to spend Rp1.2tr for the expansion of its core businesses by constructing factories in Banjaran and Cikarang, West Java, while the remaining funds will be used for other acquisitions, she added. The company also plans this year to acquire pharmaceutical factories and establish 200 drugstores, said Honesti, adding that 10 drugstores had been acquired as of March. Kimia Farma is also preparing to develop pharmaceutical factories in Saudi Arabia in cooperation with local company Bin Mahfouz Group. He declined to mention the investment for its factory in Saudi Arabia.

Bank Panin books Rp707bn profit in 1Q18
Bank Panin booked Rp707bn (US$50.9m) in net profit in the 1Q18, up 6.6% year-on-year (yoy), driven by an increase in net interest income and provisions made for impairments. The bank recorded total outstanding loans of Rp141.15tr, up 6.7% yoy. Meanwhile, its third-party funds rose 1.1% yoy to Rp147.32tr. “The majority of the loan portfolio, 61 percent, came from commercial loans, while the remainder came from the corporate segment,” Bank Panin president director Herwidayatmo said. The lender’s total assets rose to Rp214.54tr, up 3.8% from the same period a year earlier. Moreover, its equity stood at Rp37.29tr with a capital adequacy ratio (CAR) of 22.27%. Bank Panin’s gross non-performing (NPL) loan ratio in the first three months, however, increased to 2.99% from 2.91% in the same period last year. Its net NPL stood at 0.83%, compared to 0.84% in the past year.

Bank Indonesia intervenes to defend rupiah

Indonesia’s central bank has been buying sovereign bonds and selling foreign currency in “quite a sizable amount” to halt the rupiah’s depreciation since last week and will continue to stabilize the currency, its governor said. Governor Agus Martowardojo said that Bank Indonesia’s (BI) intervention had made the currency more stable this week, following a 0.7% fall against the dollar on Friday. On Tuesday, the rupiah touched a new two-year low of 13,899 a dollar, though volatility in the currency has subsided. “BI will continue to be present in the market to maintain the rupiah’s stability to reflect its fundamentals,” the governor said, adding that the rupiah’s swings so far this year have been smaller than those of the Brazilian real, Indian rupee and Philippine peso. BI’s holdings of sovereign bonds increased by Rp7.12tr ($512.78m) in two trading days to Monday, while foreigners sold a net Rp3.18tr in the sovereign bond market, according to Indonesia’s finance ministry. The yield on the benchmark 10-year sovereign bond jumped to 6.887% on Tuesday from 6.683% at the opening of Friday’s session.

Cabinet changes and other political appointments

Several 4G leaders have been given new responsibilities, according to a statement from the Prime Minister’s Office (PMO) announcing a widely-expected Cabinet reshuffle. Mr Lim Hng Kiang will step down as Minister for Trade and Industry (Trade). Mr Lim Swee Say will step down as Minister for Manpower. Dr Yaacob Ibrahim will step down as Minister for Communications and Information. Mr S Iswaran will be appointed Minister for Communications and Information. He will continue in the Ministry of Trade and Industry but be redesignated Minister‐in‐charge of Trade Relations. Mr Chan Chun Sing will be appointed Minister for Trade and Industry. He will relinquish his appointment in the Prime Minister’s Office. Mr Ng Chee Meng will be appointed Minister in the Prime Minister’s Office. He will relinquish his appointments as Minister for Education (Schools) and Second Minister for Transport. Mr Ong Ye Kung will continue in the Ministry of Education, designated as Minister for Education and be responsible for the whole Ministry. He will relinquish his appointment as Second Minister for Defence. Mrs Josephine Teo will be appointed Minister for Manpower. She will continue as Second Minister for Home Affairs, but will relinquish her appointment in the Prime Minister’s Office. Ms Indranee Rajah will be promoted to full Minister. She will be appointed Minister in the Prime Minister’s Office, Second Minister for Finance and Second Minister for Education.



Tuesday, 24 April 2018

Erajaya aims for double-digit growth 
Erajaya Swasembada is aiming for double-digit growth in its revenue and profit, along with the expansion of 250 stores throughout this year. Vice president director Hasan Aula revealed, with the addition of new outlets, ERAA is targeting its net income to reach Rp28tr, a 16% increase compared to last year’s revenue of Rp24.24tr. He added that for the bottom line, ERAA is targeting Rp380bn. The net profit targeted is 11.9% higher than the realization in 2017 worth Rp339.45bn. ERAA will allocate capex of Rp350bn for the outlets development, which will be obtained from a number of sources, according to Budiarto Halim, president director of ERAA. In addition to opening outlets in second and third tier cities in Indonesia, ERAA also plans to expand its business in Singapore and Malaysia by adding 30 Switch outlets and 13-15 M1 outlets. Currently, ERAA has 775 outlets and approximately 60% are located in Jabodetabek. (Bisnis Indonesia)

Puradelta cash dividend reach Rp626.6bn

Puradelta Lestari will disburse cash dividends worth Rp626.6bn or Rp13 per share of its FY17 net profit. The cash dividend payout ratio is 95.4%. The dividend payment plan has been approved at the AGM on Monday (23/4). The Rp626.6bn cash dividend includes cash interim dividends worth Rp313.3bn which already distributed in Dec 2017. The remaining Rp313.3bn or Rp6.5 per share will be disburse as final cash dividend on May 24, 2018. (Investor Daily)

Adaro sets a US$250m dividend
Adaro Energy set a dividend for 2017 year book worth Rp3.47tr (US$250m). The figure is equivalent to a 50% ratio of last year’s net profit of US$483.3m. The actual dividend for 2016 fiscal year only reached US$101.08m or equal to 30% of its 2016 net income. Adaro also revised its 2018 EBITDA target from US$1.3bn – US$1.5bn to US$1.1bn – US$1.3bn. This is in line with the government’s decision to cap ceiling price of coal for DMO at US$70 per ton.


Prodia targets EBITDA 16.8% in 2018
Prodia Widdyahusada targets EBITDA at 16.8% for 2018. The target is about 50 bps higher than last year’s realization. In 2017, PRDA recorded EBITDA of Rp239.05bn. To achieve this year’s performance targets, PRDA will add 5 to 7 clinical laboratories, 4 specialty clinics, 5 hospital laboratories and a minimum of 20 point of care (POC) services outlets. In 2017, PRDA recorded revenue of Rp1.47tr, grew by 8.09% year-on-year. Net income recorded at Rp150.79bn or up 71.98% yoy. PRDA also recorded an increase in the number of checks and visits. Last year, PRDA handled 15.1 million checks with earnings per check around Rp97,086. Until Dec 17, PRDA has 238 outlets spread across 118 cities throughout Indonesia


Leadership transition ‘well underway’ after extensive Cabinet reshuffle

The leadership transition spanning the next few years is “well underway”, PM Lee Hsien Loong said, and he described as “more extensive than usual” and one that would stretch the younger office-holders. Mr Lee said many younger leaders elected in recent polls will get new or expanded portfolios. “I have decided to stretch the younger ones, giving many of them two ministries and additional responsibilities. Younger ministers will progressively take over more responsibility for governing Singapore.”

Wednesday, 25 April 2018

46 power purchase contracts are difficult to get funding
A total of 46 power purchase contracts of renewable energy is having difficulties in funding. The contracts have been signed by PLN in 207. If it passes the deadline, PLN will terminate the agreement. Throughout 2017, there were 70 signed contracts of renewable energy. The capacity of the 70 contracts 1,214.16 MW, all of which are sourced from renewable energy. Of the 70 contracts, 3 have been in commercial operations, 17 under construction, 4 pre-construction, and 46 contracts have not received funding from banks.


WIKA added toll road project
Wijaya Karya is ready to build toll road in north Bandung area worth Rp9tr. The toll road is include in the project that initiated by the company, and there are still several other toll roads which still in the phase of feasibility study. WIKA is also still participating in a tender for the remaining 34-km of Serang-Panimbang toll road. Previously, its subsidiary Wika Serang Panimbang has been working on its 51-km portion of the total 84-km planned. In the AGM on April 24, 2018, WIKA’s former CEO Bintang Perbowo had completed his post-serving term for two periods, and is now replaced by Tumiyana, who previously served as the CEO of PTPP. WIKA also obtain shareholders’ approval of a 20% dividend ratio from its 2017 net profit worth Rp1.2tr.

Adaro to boost coking coal, logistics business
Adaro is set to strengthen its coking coal and logistics divisions in order to reduce its dependence on the highly volatile thermal coal business in the long run. Adaro’s AMC produced around 900,000 tons of metallurgical coal in 2017. Meanwhile, the soon-to-be-acquired Kestrel mine generated a total of 4.25 million tons of hard coking coal and 843,000 tons of thermal coal last year, respectively, providing 3.4 million tons and 674,000 tons of Rio Tinto’s production share last year. Moreover, Adaro plans to expand the business scope of its subsidiary Adaro Logistics from only working on coal-related shipments to also distributing other types of energy, including LNG. Adaro plans to allocated at least US$750m in capex this year, up significantly compared to last year’s figure of only US$229m. About US$300m will be used to procure new heavy equipment, while another US$300m will be for developing its subsidiary AMC.


New regulation on foreign workers part of administrative reform

President Jokowi underlined that Presidential Regulation No 20/2018 on foreign workers, which he signed last month, was part of an administrative reform to simplify the procedure of issuing permits to foreign workers. “We know that the regulation on foreign workers has become an issue; we want to reform the administrative procedure [related to them],” the President said. The new regulation has become a hot topic among lawmakers from opposition parties, who questioned the regulation and claimed it could trigger an influx of foreign workers into the country. “The government must protect local workers from a possible wave of foreign workers,” said House of Representatives Deputy Speaker Fadli Zon, a Gerindra Party politician. The Manpower Ministry, Indonesia currently accommodates around 126,000 foreign workers, he added. Meanwhile, Cabinet Secretary Pramono Anung assured that the regulation was merely an effort to simplify existing procedures involving visas and work permits.


Thursday, 26 April 2018

Mandatory disclosure of ultimate beneficiary owner
The government is currently preparing the infrastructure for implementation of the new regulation on mandatory disclosure of corporate ultimate beneficiary owner. Socialization and trials will be conducted and the provisions can be implemented starting end of 2018. The subjects will not be firms or institutions, but instead individuals

Jakarta-Surabaya Semi-High-Speed-Train project will proceed
The Semi-high-speed train project from Jakarta-Surabaya is claimed to have reached its final stage. Currently the project, which is funded by a Japanese investor, is just waiting for the government’s official decision. Previously, the Vice President cited that the project is ‘very feasible’. The government also reportedly have approved some of the recommendations to build a fly over and underpass along the route of the semi-high-speed train. The funding from the Japanese investor is a loan with a 40 year tenor (10 years of grace period) and 0.5% interest rate, with a total value of Rp60tr. The construction of the project will be divided into two phases: Jakarta-Semarang and Semarang-Surabaya. The train is expected to cut travel time from Jakarta-Surabaya from 9 hours currently using conventional trains to 5-5.5 hours.

Astra International increased its capex
PT Astra International increased its capex and consolidated investment for this year to Rp29tr from Rp25tr previously. ASII’s Director Prijono Sugiarto believes infrastructure and logistic have good prospects in the long term. On the other hand, the company will increase local components usage to offset the impact of IDR depreciation. Until last year, local component on ASII’s 2W reached more than 90%. Further, company will distribute dividend of Rp7.5tr off FY17’s profit, equal to 40% dividend payout ratio.

Pertamina Gas valuation is targeted to finish in Aug 2018
PT Perusahaan Gas Negara (PGN) is targeting to finish Petamina Gas valuation by Aug 2018. Pertamina’s Acting CEO Nicke Widyawati said the integration between PGN and Pertamina will be done gradually. She ensures that there will be integration of operations and investments.

Sun Life teams up with TCASH to market micro insurance

Sun Life from Canada, has launched its telco insurance service by collaborating with TCASH, Telkomsel’s electronic money system, to fulfill the needs of customers. Through this strategic partnership, Sun Life and TCASH offer insurance protection, namely Active Micro Protection, Siaga Micro Protection and DBD Micro Protection. According to Sun Life president director Elin Waty, “Sun Life’s partnership with TCASH of Telkomsel offers a way to reach a wider segment of society, in a faster, cheaper and easier way just as a sharp increase has occurred in digital-based financial transactions.”

Indonesia stocks hit 6-month low

Most SE Asian stock markets fell as a strong dollar and climbing US treasury yields saw investors unwinding greenback-denominated carry trades, while Indonesia slipped for a fifth straight session to levels unseen since October. The Jakarta index fell as much as 2.1% as foreign outflows continued to hurt the rupiah, which has been depreciating since last week. The Indonesian rupiah yield curve’s sharp flattening suggests a build-up of rate-hike expectations, Standard Chartered said in a note. Financials faltered, with Bank Central Asia falling as much as 2% and Bank Mandiri hitting a six-month low. The country’s index of 45 most liquid stocks was down 2%. Investors are reducing US dollar-funded carry trades in emerging markets after a broad rally of the benchmark currency and a subsequent spike in treasury yields dented equity risk premium. Benchmark US Treasury 10-year yield edged above 3% on Wednesday and may likely reach levels last seen in mid-2011.

BI ready to raise rates if rupiah endangers stability

Indonesia’s central bank governor said he would be prepared to adjust the benchmark interest rate if weakness in the rupiah currency threatened its inflation target or the stability of the financial system. The rupiah has lost nearly 5% of its value against the US dollar since late January and traded close to its weakest in more than two years on Thursday. The dollar has climbed to multi-month highs against a basket of currencies, supported by the rise in US long-term debt yields to a four-year peak. “If pressure continues and has the potential to hamper the inflation target and disturb the stability of the financial system, BI will not rule out adjusting the benchmark rate,” Governor Agus Martowardojo told a news conference, adding that any change in the rate would depend on economic data. Foreigners hold about 40% of the government bond market. Higher rates would stabilise the rupiah by widening rate differentials with the United States and also increase the carry or yield in the high-yielding bond market.

Singaporeans lack 80% of critical illness protection

In times of critical illness, economically active Singaporeans and permanent residents are only covered for a year of their expenses – or 20% of what is needed should they be out of the workforce for five years. The average employed person here has about S$60,000 worth of critical illness coverage, but requires about five times the amount to ensure their families are well taken care of, according to the Life Insurance Association (LIA)’s 2017 Protection Gap Study. The study, conducted by Ernst & Young Advisory, used public Government data of economically active individuals with at least one dependent. As of the end of 2016, there were about two million such adults in Singapore. They need a total of about S$663 billion in critical illness protection but are only covered for about S$125 billion, the study concluded.


Friday, 27 April 2018

Diplomat ‘cannot recognise’ the Singapore painted by Kirsten Han in The NY Times

Singapore’s ambassador to the US rebutted a New York Times opinion piece by freelance journalist Kirsten Han, saying she portrayed Singapore as an “authoritarian paradise, where critics of the government are squelched and drug traffickers are hanged”. Mr Ashok Kumar Mirpuri said that he could not recognise the country Ms Han described in her March 29 article, titled “What Trump is Learning from Singapore – and Vice Versa”. Ms Han wrote that US President Donald Trump and the Singapore Government are seemingly drawing lessons from each other on two issues. The first was Mr Trump’s reported interest in learning more about Singapore’s approach to drug trafficking, which includes the death penalty. The second was a Singapore parliamentary committee set up to mull over ways to tackle deliberate online falsehoods, or “fake news”, which she said hint at “new restrictions on the media”.

Astra Agro Lestari: Targets stable net profit growth in 2018.

Astra Agro Lestari (AALI) is targeting to mimic 2017’s net profit achievement of around Rp2t in 2018. This comes on the back of declining CPO prices since 4Q17. As a result of this, AALI posted a 1Q18 net profit of Rp355.46b, down by 55.03% yoy, from Rp790.45b in 1Q17.


Indika Energy: To take advantage of DMO; books US$809.03m revenue in 1Q18.

Indika Energy (INDY) is looking to take advantage of domestic market obligation (DMO) incentives by pushing up coal production by 10% to 36.5m tonnes in 2018, compared with its initial target of 33.5m tonnes. INDY’s subsidiary, Kideco Energy, will contribute around 35m tonnes to INDY. The company expects to ramp up production in 2H18, along with the expected rise in prices. On the other hand, INDY has succeeded in booking US$809.03m revenue in 1Q18, reflecting a surge of 264% yoy from US$222.53m in 1Q17. Net profit also jumped 164.47% yoy to US$58.37m in 1Q18.


Maybank Indonesia: Posts 1Q18 results, net profit down 5.5% yoy.

Maybank Indonesia (BNII) posted a 1Q18 net profit of Rp462b, down 5.5% yoy. The decline in earnings was due to an increase in provisions fees, which was up by 7.59% yoy to Rp682b in 1Q18. On the other hand, 1Q18’s lending increased by 2.2% yoy to Rp122t and NPL ratio was maintained at 3%.


Sawit Sumbermas Sarana: Targets 15% yoy earnings growth at minimum for 2018.

Sawit Sumbermas Sarana (SSMS) is targeting to see net profit growth of at least 15% yoy in 2018. SSMS is optimistic about its growth outlook as it expects its exports to increase, especially to China and India. As of 1Q18, SSMS produced 348.149 tonnes of fresh fruit bunches (FFB), up 20% yoy. CPO and palm kernel oil production volumes also increased by 23% yoy and 27% yoy respectively.