Month: February 2017

Freeport Indonesia: How about Termination?

Posted by | Feb 4, 2017 | , ,

Shares of Freeport McMoRan (FCX) ended significantly lower by 5.83% in New York Friday (Feb 3rd) with significant trading volume. Other than tracking copper, which retreated by 2.47% Friday, investors were concerned about status of Grasbger gold-copper mine in Papua, Indonesia. Freeport and the Government are still disputing various issues surrounding status of mining rights, mandatory development of copper smelter, and export duty for copper concentrates.

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Dismissal of Pertamina Leaders

Posted by | Feb 3, 2017 | ,

After months of speculations, the government has finally dismissed Dwi Soetjipto and Ahmad Bambang as president and vice president director of state oil and gas company Pertamina, reportedly due to leadership row. “Leadership problems at Pertamina…Management shall be solid, the organization needs fresh bloods,” said Gatot Trihargo, deputy minister of state-owned enterprises, when asked about reasons behind their dismissal. Really?

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Dahlan & the Ill-Fated Electric Cars Project

Posted by | Feb 3, 2017 |

It has been a while since we last heard of anything related to the case of corruption in the procurement of electric cars for the 2013 APEC Summit. The case initially brought down the Minister for State-Owned Enterprises (BUMN) Dahlan Iskan. The first suspect in the case, i.e., the Director of PT Sarimas Ahmadi Pratama Dasep Ahmadi was found guilty in March 2016, but the court decided that Dahlan Iskan was not involved in the case. At the stage of cassation, however, the Supreme Court not only aggravated Dasep’s punishment, but they also declared that Dahlan was involved. In response, the Attorney General’s Office (AGO) named Dahlan Iskan as a new suspect in the case on January 26, 2017.

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More Pressure on Habib Rizieq & His Allies

Posted by | Feb 3, 2017 |

The West Java Police confirmed that they would examine Habib Rizieq Shihab, the leader of the infamous Islam Defenders Front (FPI), next week. It will be the first examination for Rizieq as a suspect for defaming Pancasila. In the meantime, the Jakarta Police has on Wednesday (Feb. 1) raided the private residence of Firza Husein to investigate the case that emerged from the steamy WhatsApp chat that allegedly happened between Firza and Rizieq. Firza, as we all know, is one of the 11 individuals suspected of plotting treason. Firza was arrested by the Police just before the December 2nd event organized by Rizieq and his allies in the FPI and the co-called GNPF-MUI as a part of the rallies against the incumbent Jakarta Governor Basuki “Ahok” Tjahaja Purnama.

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Banking Update: Improved Credit Quality

Posted by | Feb 3, 2017 |

The quality of lending in the banking sector started to improve last year, and the improvement trend is expected to continue this year. Some positive factors would help push down the non-performing loan (NPL) ratio. Banking lending experienced its lowest growth in September 2016 (6.4% year-on-year), while NPL ratio increased to 2.93% from previous 2.49%, reflecting a decline in the quality of assets in the banking industry. The lending in 2016 also increased, mainly for corporate and consumer segments, helped by acceleration of government’s spending.

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SBY vs Ahok

Posted by | Feb 3, 2017 |

Controversy continues on the suggestion that the Sixth President Susilo Bambang Yudhoyono (SBY) and the chairman of the Indonesian Ulema Council (MUI) K.H. Ma’ruf Amin may have once had a phone conversation to discuss the release of the blasphemy fatwa on the Governor of Jakarta Basuki “Ahok” Tjahaja Purnama. Ahok’s lawyer Humphrey Djemat was the one who brought up the suggestion while cross-examining witness Ma’ruf Amin in Ahok’s blasphemy trial. It looks like Ahok’s lawyer want to prove that his client is merely a victim of high-level political plot, and that the phone call between SBY-Ma’ruf Amin is the key to revealing said plot. SBY, on the other hand, immediately played victim and claimed that he may have been illegally wiretapped. So who will come out triumphant in this battle? Will Ahok’s team follow through on the suggestion that there’s a plot targeting their client, or will SBY’s spin succeed in turning the situation in his favor?

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Update on Patrialis Akbar’s Case

Posted by | Feb 3, 2017 |

The investigation into the bribery case that implicates the former justice of the Constitutional Court Patrialis Akbar continues. When examined by the newly-formed Honorary Assembly, Patrialis reportedly admitted to violating the Justices’ code of ethics. Prior to the examination, Patrialis had decided to resign from his post, but the Constitutional Court Board of Ethics are now considering to dishonorably dismiss Patrialis Akbar. The Corruption Eradication Commission (KPK), meanwhile, had managed to find more than 20 stamps bearing the name of a number of ministries and international organizations providing halal certification while raiding locations in connection to this case.

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Market Snapshot & Corporate Actions

Posted by | Feb 3, 2017 |

Global markets closed lower on Thursday (Feb 2) as investors continued to eye tension between U.S. President Donald Trump and other country leaders. In a meeting with lawmakers, Trump said he would like to speed up talks to either renegotiate or replace the North American Free Trade Agreement, Reuters reported. Investors weighed concerns on Trump’s protectionist bent against solid economic readings from around the globe on manufacturing and inflation that have suggested improving fundamentals in 2017 as they positioned ahead of Friday’s U.S. non-farm payrolls report. On Wednesday, the Federal Reserve left interest rates unchanged after its latest policy meeting even as it painted an upbeat picture of the economy.

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Coal Journal No. 5/2017: Output to Watch

Posted by | Feb 3, 2017 | ,

Thermal coal was traded at US$82.7 per ton on Thursday (Feb 2nd) to represent 57.8% gain year-on-year. The commodity has been hovering above US$80 since October 2016 as crude oil was also relatively stable above US$50 per barrel. Going forward, market participants need to watch closely policy changes in China and US plus difficulties to control output in Indonesia.

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Deliver or Pay

Posted by | Feb 3, 2017 | ,

Energy and mineral resources minister Ignasius Jonan has just signed three new regulations for electricity sector. One of them, Regulation No. 10/2017 about power purchase agreement (PPA) specifics, introduces deliver or pay mechanism, wherein independent power producer (IPP) is required to compensate PT Perusahaan Listrik Negara (PLN) in the event of failure to deliver the energy.

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