Day: March 2, 2017

King Salman & Jakarta Election Runoff

The King of Saudi Arabia Salman bin Abdul Aziz landed at the Halim Perdanakusumah Airport on Wednesday (Mar. 1) for his nine-day visit in Indonesia. President Joko “Jokowi” Widodo and Jakarta Governor Basuki “Ahok” Tjahaja Purnama were among those who welcomed the King at the airport. The most interesting sequence was that of King Salman and Governor Ahok shaking hands. This sequence is worth noting because of the religious tension that have risen since the start of Jakarta’s 2017 gubernatorial race.

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Infrastructure Journal No. 09/2016: Dam, Railway & Toll Roads

President Joko ‘Jokowi’ Widodo is determined to develop eastern part of Indonesia with acceleration of infrastructure projects. In East Nusa Tenggara, which has lots of potentials in tourism, fisheries, agriculture, and mining, for example, a total of 176 KM public road is being built, of which 48.19 KM has been completed, while 104 KM will be operational this year.

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HERO, JPFA and Other Results

Retailer Hero Supermarket (HERO) booked net profit of Rp120 billion in 2016, against loss of Rp144 billion in 2015, supported by the 34% growth in other income. The Company booked other income of Rp240 billion last year, compared to Rp179 billion in 2015. While its net sales declined 5% to Rp13.68 trillion from previous Rp14.35 trillion.

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Revisiting the DPRD Bribery Case in North Sumatera

The disgraced Governor of North Sumatera Gatot Pujo Nugroho, as we all know, is involved in four different cases of corruption, one of which is the bribery of the members of the North Sumatera Representatives Council (DPRD). The Corruption Eradication Commission (KPK) named 12 former members of DPRD as suspects in said case. The first batch of suspects were convicted in June 2016. On March 2, 2017, the last 7 suspects were convicted. As for Gatot, his trial for this case is being held in the Corruption Court of the Medan District Court in North Sumatera.

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The Need for A New Justice

After the resignation of Patrialis Akbar, the Constitutional Court is in need of one more Justice. It is all the more unfortunate that Patrialis was caught for bribery just before the simultaneous regional elections. The need for a new Justice to join the ranks has become more urgent now the Constitutional Court is reviewing dozens of election dispute lawsuits. The President has signed a Presidential Decree and formed a Selection Committee in search for the new Justice, but the cutoff date for the registration of candidates is March 31, 2017 whereas the examination of the dispute petitions will take place in the third week of March 2017, with the election runoff stage to be conducted on April 19, 2017. Can the Constitutional Court handle the burden for the time being?

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Corporate Results & Data

United Tractors (UNTR) started 2017 with strong performance in sales of construction machinery, coal production, and coal sales in January 2017. Delta Dunia Makmur (DOID) also reported 25% increase in coal production, but overburden removal grew significantly faster. Bank Danamon, meanwhile, enjoyed 11.5% growth in net profit last year despite 69% fall in the last quarter of the year.

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Red Market & Accelerated Inflation

Investors opted to sell local stocks on Wednesday (Mar 1) as the market sentiment was undermined by the inflation data for February. The rupiah also weakened further to Rp13,361 against the U.S. dollar. The composite index of the Indonesia Stock Exchange (IDX) fell 0.44% to close at 5,363 yesterday. Foreign investors booked net sell of Rp347 billion, bringing year-to-date net sell to Rp2.12 trillion.

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7 Eleven: Another Victim of Retail Competition

Hero Supermarket (HERO) booked net profit of Rp120.6 billion last year, an improvement compared to 2015 when it posted net loss of Rp144 billion. The profit, however, represents margin of 0.88% only. HERO has earlier been forced to leave smaller retail format Starmart, divesting some convenience stores to Wings Group. Ranch Market operator Supra Boga Lestari (RANC) has also given up convenience stores business under the Ministop brand name last year.

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Sinarmas Group in 2016 (2): GEMS & GEAR

PT Golden Energy Mines (GEMS) Tbk, coal mining subsidiary of Sinarmas Group, booked net profit of US$34.45 million last year, skyrocketed from US$2 million only in 2015, thanks to significant improvement in the fourth quarter. Strange, however, that sales revenues slipped 0.5% in the quarter, while average coal price jumped significantly in the period.

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Aneka Tambang (ANTM): FY16 Results & Outlook

State miner Aneka Tambang (ANTM) booked net profit of Rp65 billion last year against loss of Rp1.44 trillion in 2015. The Company’s performance improved significantly in the fourth quarter, thanks to higher prices of nickel. Still, with earning per share of Rp3 only, the Company needs to report 10 times of last year’s profit this year to justify the current stock price.

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