Day: March 20, 2017

Victoria Securities v. Adyaesta Ciptatama: More Obstacles

In September 2016, the Attorney General’s Office (AGO) named several suspects of corruption in the sale of right to collect debts (cessie) of the Indonesian Bank Restructuring Agency (BPPN) involving PT Victoria Securities Indonesia (VSI) and PT Adyaesta Ciptatama (previously reported as PT Adistra Utama). Since then, however, the inquisition of the case has not shown progress.

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Corporate Actions & Results

State-owned construction firm Wijaya Karya (WIKA) expands into industrial estate, allocating Rp3.6 trillion for funding construction in the said segment. It allocates capital expenditure (capex) of Rp12 trillion for this year, with 30% portion aiming for construction of industrial estate.

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Taxation Journal: PMK No. 39/PMK.03/2017

By the end of March 2017, the Tax Amnesty Program will come to an end. The Ministry of Finance already have plans to further regulate on taxation issues. One of the regulatory products to be published is the Law on Tax Information Exchange Agreement or Automatic Exchange of Information. The Government is planning to promulgate this legal product in the form of Regulation in Lieu of Law (Perppu), but in the mean time, the Ministry of Finance published guideline in the Ministerial Regulation (PMK) No. 39/PMK.03/2017.

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Semen Baturaja (SMBR): FY16 Results & Outlook

PT Semen Baturaja Tbk (SMBR) has dropped 11.7% from its peak, but still considered the most expensive cement stock in the market. It is now traded with PE multiple 101.2 on its historical 2016 earnings, while market leader PT Semen Indonesia Tbk (SMGR) is traded with PE multiple 12. While sales revenues grew 4.2%, net profit collapsed 26.8% to Rp259 billion only last year.

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Jokowi’s Consolidation of Power: Regeneration in the TNI

President Joko “Jokowi” Widodo continues to consolidate his power in the Indonesian Military (TNI). Recently, Maj. Gen. Bambang Suswantono, a familiar figure within the State Palace circles, was named the new chief of the Navy’s Marine Corps to replace Maj. Gen. RM Trusono. Trusono was made the new commander of the TNI’s staff and command schools (Sesko).

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E-KTP Graft Case: Those Linked to Riza Chalid & Hatta Rajasa

The Rp5.9 trillion electronic identity card (E-KTP) project is estimated to have cost the State Rp2.3 trillion in financial loss due to graft. The Corruption Eradication Commission (KPK) has built a case on the two individuals suspected of graft in relation to the project —Irman and Sugiharto. In their indictment, many names are mentioned, including Setya Novanto of Golkar Party, those known to be close to former president Susilo Bambang Yudhoyono, and those linked to businessman Tommy Winata (TW). But there are other names mentioned that are linked to Mohammad Riza Chalid and SBY’s in-law Hatta Rajasa.

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Delta Dunia (DOID): FY16 Results & Outlook

Delta Dunia Makmur (DOID), parent company of coal mining contractor BUMA, booked net profit of US$37 million last year against loss of US$8.31 million in 2015, thanks to significant improvement in the fourth quarter of 2016. In the quarter, DOID’s sales revenues jumped by 31.6%, while operating profit skyrocketed 130% to US$53.3 million.

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Aggresive Foreign Buying

Foreign investors made a heavy buying in local stocks on Thursday and Friday last week, with combined net buy reaching Rp4.33 trillion. Foreign investors have now booked net buy of Rp4.29 trillion in local stocks year-to-date. The composite index of the Indonesia Stock Exchange (IDX) gained 0.4% to close at 5,540 on Friday last week, but it closed off its low of 5,499 as domestic investors opted to lock in profits in certain stocks.

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Unilever Indonesia & The Ballooning Tax-Trademark Gap

PT Unilever Indonesia Tbk (UNVR) is among the most profitable units of worldwide consumer giant Unilever. With equity of Rp4.7 trillion only, UNVR generated net profit of Rp6.39 trillion last year, an increase of 9.2% from 2015. Other than huge dividend payments every year to parent company, Unilever Indonesia paid Rp3.32 trillion for trademark, technologies, and service fees last year alone, jumped 36.6% from 2015.

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Oil & Gas Investments Update (2)

President Joko ‘Jokowi’ Widodo has late last week inaugurated commercial operation of eight mobile gas-fired power plants with combined capacity of 500 MW. This will grow domestic consumption of natural gas. Without new gas fields, Indonesia’s import of natural gas would continue to increase. In the first two months of 2017, import of natural gas already jumped 98.5% to 901,000 tons.

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