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Monday, 30 October 2017  

Japan vows to speed up infrastructure development

Japan has promised to expedite progress on several infrastructure projects it is working on with Indonesia. The projects include the revitalization of the railway connecting Jakarta and Surabaya, East Java, the deep-water port and access road in Patimbang, West Java, the tunnel section of the Padang – Bukittinggi – Pekanbaru toll road in West Sumatra and Riau, as well as the future phase of Jakarta’s MRT project. Public Works and Public Housing Minister Basuki Hadimuljono said the Japanese counterpart in the Patimban port project aimed to sign a loan agreement this year. Located in Subang regency, the port is expected to cater to demand from firms operating in the surrounding industrial areas, especially Japanese auto manufacturers. Japan is set to provide US$1.7bn in loans for the first phase. Moreover, Japan has agreed to fund the first phase of the access road connecting the port with Java’s northern coastal road (Pantura), as well as the 40-km access road to connect the port with the existing Cikopo – Palimanan toll road, slated to start construction in 2020. The second phase will need investment of Rp3.86tr.

Tax office allays concerns 

With three months left to meet its collection target, the tax office has assured the public that it has no intention of scaring away people of businesses in its drive to collect taxes. While confirming that the office had sent letters to the companies indicating preliminary evidence (bukper), which would give the office a basis for launching an investigation, Director general of Taxation Ken Dwijugiasteadi insisted that the office had relaxed its approach. Tax compliance is low in Indonesia with only some 36 million registered institutional and individual tax payers, more than half whom have not submitted annual tax return forms, according to the tax office. The tax office is hard-pressed to collect Rp1.28 quadrillion in taxes this year to build infrastructure and support hefty social spending. Economist and tax experts have projected the office will only achieve around 85% of the revenue target amid subdued economic growth. Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo said the tax office should focus on winning the public’s trust first.

PPRO to increase landbank and issue MTN 

PP Properti plans to increase landbank of 90 hectares in the remaining fourth quarter of this year. The funding acquisition is met from part of the issuance of medium-term notes (MTN) that are expected to be realized in the near future. Throughout this year, PPRO allocated capex of Rp1.9tr. 70% or about Rp1tr of the capex is sourced from rights issue proceeds in the 1H17, while the remaining Rp900bn will be taken from the proceeds of the bonds issuance in the near future. Based on information disclosure of KSEI, on Aug 30, 2017, PPRO issued MTN VI amounting to Rp287bn with a three years tenor. Then, on Sep 19, 2017, the company re-issued MTN VII worth Rp300bn with two series and tenured three years.

Adhi Persada Property seeks more funding 

Adhi Persada Property, ADHI’s property arm, is seeking new funding to expand its business after previously obtaining additional capital from its parent company. Recently, ADHI injected new capital into Adhi Persada Property through debt-to-equity swap with a total value of Rp828bn. Adhi Persada Property could leverage up to 3 times (up to Rp2.4tr). It now plans to issue Rp625bn of MTN, with an interest rate of 10.5% p.a.

More than 145,000 units of Meikarta were sold

Lippo Group officially holds a topping off ceremony of the two apartment towers in the Meikarta project, Cikarang, West Java. The investment value of both apartments is Rp1tr. Lippo claims to have sold more than 145,000 apartment units. Half of it has been processed as a serious buyer, meaning that the process has reached the stage of signing a purchase agreement, according to Ketut Budi Wijaya, Lippo’s president director. The two towers marked the beginning of the construction of Meikarta. Both contain a total of 900 units. Lippo targets the process of unit handover in 2018. The two apartment towers are part of the 200 towers that will be present in Meikarta. The total investment value of this project reached Rp278tr.

 

New jobs to be created in financial services and fintech

A total of 4,000 net jobs will be created annually till 2020 in the financial services and fintech sectors as part of the industry transformation map (ITM) for financial services. Three quarters of the new jobs will be added in the financial services sectors, and these cut across the areas of wealth management, insurance and IT, the Monetary Authority of Singapore (MAS) said. The roles include those in investment advisory, risk modelling and artificial intelligence. The industry has been buffeted by disruption, posting job losses which are expected to continue especially for the more traditional roles.

 

Myanmar charges Singaporean journalist for flying drone

Myanmar authorities have charged a Singaporean journalist and his Malaysian colleague for allegedly flying drones illegally over and around the government’s parliament buildings in Naypyitaw. Singaporean Lau Hon Meng and Malaysian Mok Choy Lin, who are working for Turkish Radio and Television, were detained along with their local interpreter and freelance journalist Aung Naing Soe after flying drones over the parliament building on Friday, police said. Their driver was also detained. The Police said the drone was imported without permission.

 

 

Tuesday, 31 October 2017

 

Bank Danamon Indonesia: Net profit rose 20.7% yoy.

Bank Danamon Indonesia (BDMN) booked a 20.7% yoy jump in net profit to Rp3.03t in 9M17, compared with Rp2.51t in 9M16. The growth in net profit was supported by a 3% yoy growth in net interest income (NII) to Rp10.58t in 9M17.

 

Metrodata Electronics: Net profit jumped by 36% yoy.

Information technology and communication company, Metrodata Electronics (MTDL), booked net profit of Rp155b in 9M17, up 36% yoy. Sales revenue grew by 2.8% yoy to Rp7.2t in 9M17, compared with Rp7.04t in 9M16.

 

Pembangunan Perusahaan: Allocates Rp6.7t capex to property business in 4Q17.

Construction and investment company, Pembangunan Perusahaan (PTPP), will allocate Rp6.7t of capex to property business in 4Q17, or 67% of year-end 2017 capex target of Rp10t. The firm is also planning to carry out an IPO on two of its subsidiary firms, PP Energy and PP Urban.

 

Singapore files fresh rebuttal against Malaysia’s Pedra Branca challenge

Singapore has filed a fresh rebuttal to Malaysia’s ongoing challenge to the Pedra Branca judgment at the International Court of Justice (ICJ). The latest documents were filed with the ICJ, in response to a second application by Malaysia on June 30 challenging the court’s 2008 ruling awarding the tiny island to Singapore. Putrajaya had asked the court to award waters around Pedra Branca, which sits at the entrance to the Singapore Strait about 30km east of Singapore, and a maritime feature south of it called South Ledge, to Malaysia.

 

 

Wednesday, 1 November 2017

MRT construction phase I reach 83%

The progress of MRT construction phase I as of Oct 25, 2017 reached 83%. PT MRT Jakarta is optimistic the 90% target for the construction by the end of this year will be achieved. MRT’s operation is targeted starting in March 2019. Currently all trace from Lebak Bulus to Bundaran HI are connected, thus it will now focusing on the construction of station and depot, according to president director of PT MRT Jakarta William P. Sabandar. Meanwhile, PT MRT Jakarta prepares a total of 13 stations, divided into seven elevated stations and six underground stations. PT MRT Jakarta is entrusted as the MRT operator for 30 years starting from the date of assignment and can be renewed at any time for a maximum period of 20 years. To note, MRT Jakarta passengers at the time of operation later is estimated at 173,400 passenger/day.

Employers squeezed by wage increases

Today is the last day for regional head to set the provincial minimum wage (UMP) for 2018. Although the government has set the rules for the UMP increase based on inflation rate and economic growth, however, there’s still a debate among workers. For example in DKI Jakarta, the workers propose UMP 2018 amounting to Rp3,91m, considering the KHL survey result. While the employers asks the government to stick with the UMP calculation based on the government regulation No. 78/2015. Referring to the formula, the UMP 2018 for DKI Jakarta is amounting to Rp3.64m, a 8.71% increase from 2017. Apindo head of labor department Harijanto said the wage increases to Rp3.91m will make some industries burn a heavy load.

Bank Indonesia expects 12% loan growth in 2018

Bank Indonesia is expecting the overall banking system loan to grow 12% yoy in 2018, higher than 8-10% expected for 2017. BI cited that it expects growth from the property sector. The central bank also expects NPL to be on a downtrend going forward. Currently, NPL has stabilized at 3%. On the other hand, it expects a 7.6% yoy deposit growth, which implies a 94% LDR by end of 2018, higher than 92% expected in 2017.

Waskita gets Rp5.9tr syndicated loans

Waskita Karya obtained a syndicated loans worth Rp5.9tr from 10 financial institutions, with an interest rate of 8.75%. Bank Negara Indonesia acts as mandated lead arranged and book-runner while, Bank of Tokyo – Mitsubishi UFJ acts as mandated lead arranger. WSKT recently signed the syndicated loan agreement to support the acceleration of the construction project of LRT Palembang. According to Waskita’s CFO Tunggul Rajagukguk the loan will be matured in Dec 31, 2018.

 

Minimum wage at Rp3.6m

The city administration reached a decision to set the provincial minimum wage at Rp3.6m (US$265). The figure is 8% higher than last year’s minimum wage of Rp3.3m. “Workers will enjoy the raise, while businessmen will not bear a heavy burden given recent sluggish economic conditions,” Jakarta Governor Anies Baswedan said. Labor unions previously demanded a minimum wage of Rp3.9m based on calculations that took into account the basic cost of living (KHL), while businesses asked for Rp3.6m.

 

Calls for tax reform as CPF relief benefits the rich

If a rich man contributes S$100 to his Central Provident Fund (CPF) account, he could get up to S$22 in income tax relief. In comparison, a person drawing S$3,000 a month would only get S$2 in relief. Pointing out these extremes in potential savings by different income segments, Singapore University of Social Science economist Walter Theseira said that the Republic’s CPF contribution tax relief policy should be reformed to troubleshoot the “regressive nature of CPF contributions”, where those who earn less contribute a greater fraction of their income to society than high earners.

 

Singaporean CEO of Razer to become a billionaire

After raising funds from Asia’s biggest investors, including Hong Kong tycoon Li Ka-shing and Singapore’s Temasek Holdings Pte, Razer Inc is turning to the market for an initial public offering that will make its co-founder Tan Min-Liang a billionaire. Mr Tan, a Singapore entrepreneur who’s also Razer’s chief executive officer, owns about 42% of the San Francisco-based maker of video gaming accessories such as mice and headsets, together with his family. Razer is offering more than a tenth of the company to raise at least US$400m (S$544.92m) in a Hong Kong IPO, giving Mr Tan a net worth of more than US$1.2bn.

 

                                                                                      

Thursday, 2 November 2017

Inflation to stay low until year-end

Inflation is expected to hover at the lower end of the target set by the government and central bank this year as the rate remained under control two months before the end of 2017, economist have said. Annual inflation stood at 3.58% yoy in October, as the monthly rate was recorded at 0.01%, the BPS announced on Wednesday. The figure, bringing year-to-date inflation to 2.67%, was lower than the 0.13% monthly rate in September, the agency’s data showed. Those figures were lower than BI’s projection of 0.09% of monthly inflation and 3.67% annually. The 2017 revised state budget earmarked the inflation target at 4.3%, but authorities, including the central bank, expect the rate to stay below 4% this year in the current climate.

Easier to do business in Indonesia 

With 16 economic deregulation packages, massive investment in expanding the electricity supply and a crackdown on illegal fees and levies, the government has put considerable effort into improving business competitiveness over the past three years. Climbing 19 places, Indonesia made its highest-ever jump to rank 72 out of 190 countries. A higher ranking indicates better and simpler conditions for businesses. However, Indonesia still lags behind many of its ASEAN peers. Thailand, a country gripped by military rule since being wracked by political chaos in 2014, scored the highest leap, of 20 spots, to rank 26 while Vietnam jumped 14 spots to 68th place. Thailand and Vietnam ranked higher as Indonesia scored poorly in the categories of starting a business, paying taxes, getting construction permits and red tape in cross border trading. According to the report, it requires 23.1 days on average for entrepreneurs to start a business in Indonesia, while it takes a mere 4.5 days in Thailand. It also takes 200.2 days in Indonesia to get permits to build a warehouse, while it only takes 104 days in Thailand. For export it takes 53.3 hours to meet border compliance, while for imports it takes 99.4 hours. Thailand, meanwhile, takes 51 hours for exports and 50 hours for imports. Despite the drawbacks, Indonesia has made a considerable improvement in starting businesses by reducing fees to set up a company and connecting to the electricity network. To ease export and import procedures, the government will reduce the number of prohibited and restricted goods and implement integrated risk management and utilize online systems, Darmin Nasution said.

KPR distribution grew 10.6% in September

Distribution of housing loans (KPR) grew positively with the relaxation of loan-to-value (LTV) and interest promotion from banks. BI recorded, housing loans (KPR) and apartment ownership loans (KPA) in Sep 17 grew by 10.6% year-on-year or reached Rp393.8tr, an increase compared to Aug 17 which grew 10.4% yoy. However, the growth is not in line with the property credit growth which slowed to 13.2%, from August 13.5%. Based on the money supply data from BI, lending rate has dropped 8 bps to level 11.6%, following the decline in BI 7-day reverse repo rate. BCA recorded a significant growth in its KPR distribution. Based on the company’s publication data, as of 3Q17, KPR grew 26.8% to Rp78.8tr. Meanwhile, on Oct 25, 2017, PT Sarana Multigriya Finansial (Persero) teamed up with Bank Pembangunan Daerah Banten to increase the capacity of KPR distribution.

 

DMAS optimist to achieve target

Puradelta Lestari is optimistic its revenue by the end of the year may increase, driven mainly by the realization of sales. According to Tondy Suwanto, director of DMAS, currently the company is working to complete the sale of industrial land of 20 hectares. US-based company Kohler has committed to investing in Indonesia by building a 20-hectare plant in the GIIC, which is part of Kota Deltamas. Previously, there are two leading automotive companies SAIC GM Wuling and Mitsubishi have been operating this year. As of end of Sep 17, DMAS total industrial land sales reached 37.5 hectares. Kohler’s transaction settlement will increase the total sales to 57.5 ha.

 

Association considers filing lawsuit against Alexis closure

Members of the Jakarta Entertainment Association considered the possibility of filing a lawsuit against Jakarta administration should the latter fail to provide a solid basis for terminating the business license of Alexis Hotel in North Jakarta. The city administration previously decided not to extend the permit of the premises due to public reports that it facilitated prostitution. The head of the association, Erick Halauwet, said the administration should provide an explanation and strong evidence of the prostitution accusations.

 

Growth for Indonesia’s Startup Industry

Venture capital firms are optimistic about the growth of the startup industry in Indonesia. More than 300 startup companies and 250 investors attended a two-day event Tech in Asia Conference at the Jakarta Convention Center. Tokopedia, Traveloka and Go-Jek are considered unicorns. Grab and Singapore-based Garena are two other unicorns based in Southeast Asia that have a market presence in Indonesia. Companies like Shopback.co.id, Mokapos.com, IDNTimes and Ruangguru.com have potential to be the next startup success story. East Ventures is preparing $30m in funding for two startup companies for next year.

 

E-application system for PR applicants

Those who wish to become Permanent Residents (PR) here must apply online from next month, the Immigration and Checkpoints Authority (ICA) said it has a new electronic application system as well as changes to the fees involved. Currently, those applying for PR must make an appointment with the ICA and submit physical copies of the relevant documents in person. Applicants can fill up an online application form on the ICA’s website, and electronically submit scanned copies of the necessary documents. The total fees paid by successful applicants will increase by S$20 to S$120 under the new system.

 

Visa approves Monaco cryptocurrency card

Visa Inc has approved a prepaid card backed by the cryptocurrency Monaco as the world’s largest payments network continues its foray into digital currencies. Monaco’s prepaid card has been approved for issuance to Singaporean residents, Visa spokeswoman Lea Cademenos said in an email. Visa approved the programme through Monaco’s issuer, Wirecard AG.

 

Friday, 3 November 2017

 

PP Properti: Issues medium-term notes for Rp213b and target capex of Rp1.2t in 2018.

PP Properti (PPRO) has issued a medium-term notes (MTN) for Rp213b with a coupon of 9.75% maturing in 3 years. The MTN will be distributed electronically on 3 Nov 17, with the first coupon payment on 3 Nov 18. PPRO has also set a capex target of Rp1.2t in 2018, with projected capex of Rp1.5t, Rp1.5t,

Rp2t, Rp2t in 2019, 2020, 2021, 2022 respectively.

 

Timah Persero: Records a 493% yoy spike in net profit to Rp300.57b in 9M17.

Timah Persero (TINS) recorded a huge 493% yoy increase in net profit to Rp300.5b in 9M17, compared with Rp50.65b in 9M16. Revenue grew by 44% yoy to Rp6.62t in 9M17, compared with Rp4.5t in 9M16, with sales volume in 9M17 jumping 16.1% yoy. Sales was strong due to a jump in sales of tin metal and tin solder by 38.16% yoy to Rp5.92. Sales of tin chemical rose by 206.66% yoy to Rp529.83b.

 

Waskita Karya: Obtains Rp1.4t loan to fund light rail transit (LRT) project.

Waskita Karya (WKST) has obtained a Rp1.4t loan to fund LRT project in Palembang, South Sumatra. As a result, WSKT booked total loan of Rp5.99t, from Rp4.59t previously. The loan was given by Bank Negara Indonesia (BBNI) as mandated lead arranger and bookrunner, and Bank of Tkyo-Mitsubishi as mandated lead arranger.

 

Indonesia named world’s top destination

Indonesia took home the award for the world’s top destination for two years in a row given by London-based Dive Magazine. Siladen Resort and Spa at Bunaken National Park in North Sulawesi was also named the best dive center and resort by the publication. A total of 13,845 votes were collected since the first polling in May, of which hundreds of nominated places and liveaboards were reduced to top 25 in each category. There were three categories presented to the online voters: Best destination, dive center or resort and liveaboard. The second voting period was conducted in October for one full month. In the best destination category, Indonesia earned the biggest votes with 1,067 or 11.45% from the total of 9,399 votes casted.

 

Police examining role of Goldman Sachs in 1MDB deals

Singaporean prosecutors and the police are examining Goldman Sachs Group Inc.’s relationship with the Malaysian state investment fund at the centre of global money laundering probes. The Commercial Affairs Department, the police’s economic crime unit, and city prosecutors have interviewed current and former Goldman Sachs executives who worked on bond offerings from 1Malaysia Development Berhad (1MDB), said the people, who asked not to be named because the queries are confidential.

 

Banker Wee Cho Yaw to retire from UOB board

Dr Wee Cho Yaw, 88, chairman emeritus of United Overseas Bank (UOB), will retire from the UOB board and relinquish all his responsibilities there after 60 years with the bank. As part of the changes to the board announced by UOB on Thursday (Nov 2), former Cabinet Minister Wong Kan Seng, 71, has been nominated by the board of directors to succeed Mr Hsieh Fu Hua, 67, as chairman of the bank. Mr Hsieh will retire next February.