Day: March 16, 2017

Papua’s 2018 Election: The Incumbent & His Potential Contenders

The dynamics leading up to the gubernatorial election in Papua (which will be held next year) is important to watch for the result of the election will have bearing on the future of Freeport Indonesia in the world’s largest copper and gold mine Grasberg. Governor Lukas Enembe, who is likely seeking his re-election, recently mentioned several names that he believes to be his potential contenders.

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Update on Banking & Corporations

In terms of asset declarations, the Indonesian Government’s tax amnesty program (which runs until the end of March 2017) has been a success. In terms of asset repatriation from abroad, however, the program has been disappointing. That said, plenty of banks’ big clients have declared their hidden assets under this program. And so there is less need for banks to keep clients’ data secret from Indonesian tax authority. This may change banking information culture. After decades of the “banking information secrecy” in Indonesia, local banks may now be more willing to share clients’ financial information to tax authorities.

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West Java’s 2018 Election: The Big Five

Five names are now considered as potential governor candidates for West Java’s 2018 gubernatorial election. One of them is the popular Mayor of Bandung Ridwan Kamil, who has secured the endorsement of the Nasdem Party, a political party led by media mogul Surya Paloh.

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On the Disclosure of Information Concerning Permits and Concessions (Part II)

Two petitions for the disclosure of information—one on data concerning Rights to Cultivate (HGU) filed by Forest Watch Indonesia (FWI), and another on information concerning Forest Concession filed by Greenpeace Indonesia—have produced with two different outcomes. On FWI’s petition, the Supreme Court ruled that information concerning HGU constitutes public information must thus be made accessible to the greater public. Greenpeace Indonesia’s appeal for disclosure of information on Forest Concessions, on the other hand, was rejected by the State Administrative Court (PTUN).

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Pertamina CEO

Elia Massa Manik, CEO of PT Perkebunan Nusantara III, holding company for state plantations, will likely be appointed new chief executive officer (CEO) of state oil and gas company Pertamina. Manik, former CEO of Elnusa (ELSA), an oil and gas supporting services company controlled by Pertamina, has reportedly secured approval from President Joko ‘Jokowi’ Widodo to replace Dwi Soetjipto, who was dismissed last month.

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On the Disclosure of Information Concerning Permits and Concessions (Part I)

On March 6, 2017 the Supreme Court rejected the cassation filed by the Ministry of Agricultural and Spatial Planning (Kemen-ATR) against the order of the Public Information Commission (KIP) which requires the Government to make access to information on the right to cultivate (HGU) of oil palm plantations accessible to the public. Environmental activists welcome this ruling.

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Fed Rate Hike & Market

As expected the Federal Reserve decided on Wednesday (Mar 15) to raise the target range for its federal funds rate by 25 basis points to 0.75% to 1%. The hike came in line the development on the U.S. economy, which has almost met the Fed target of full employment and stable prices. Global investors welcomed the Fed rate hike. U.S. stocks surged on Wednesday. European stocks also closed higher. This morning futures indicate that most Asia-Pacific equity markets are likely to follow U.S. stocks higher.

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Bukit Asam (PTBA): FY16 Results & Outlook

Bukit Asam (PTBA), the state-owned coal producer, maintains its position as the most profitable coal producer in Indonesia with higher net profit margin than companies like Adaro Energy (ADRO) and Indo Tambangraya Megah (ITMG). One, however, shall closely monitor operation of the 2×100 MW mine-mouth power plant in South Sumatra and other new projects.

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Kimia Farma (KAEF): FY16 Results & Outlook

State-owned pharmaceutical company PT Kimia Farma Tbk (KAEF) booked net profit of Rp267.4 billion last year, relatively flat compared to 2015 (Rp261 billion). The Company actually posted strong sales revenue growth of 22% to Rp5.8 trillion. Its gross profit also improved substantially by 21% to Rp1.86 trillion, but operating profit improved only by 13.3%, while financial charges surged by 66%. Combined with significant increase in tax expenses, KAEF then posted flat growth in net profit.

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Revisiting Indonesian Alumina Industry

Last year was a better year for Indonesian alumina industry, at least in terms of sales revenues. Higher volume and average price of aluminium in international market, especially in the fourth quarter, contributed to the growth. PT Indonesia Chemical Alumina (ICA), a joint venture between Showa Denko (Japan) and Aneka Tambang (ANTM), for example, generated sales revenue of Rp471.95 billion, jumped by 64% from 2015.

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