Category: Business

Trans-Sumatra & Hutama Karya’s Financials

The government initially proposed capital injection of Rp12.5 trillion to state EPC firm Hutama Karya in the State Budget 2019. The House of Representatives (DPR), however, might agree on a lower amount with some implications to the trans-Sumatra toll road program, especially those in early stage of development.

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Merger Update: GDST-JPRS

Shares of steel producer Gunawan Dianjaya Steel lost 0.56% to Rp178 on Friday last week. It has fallen 33.6% from its peak at Rp270 on June 26 this year. Shares of Jaya Pari Steel, meanwhile, was flat at Rp212, but it has fallen 41.7% from its peak at Rp360 on June 26. Both stocks have been the focus of trading since June following their merger plan.

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Update on IPO

Property developer PT Propertindo Mulia Investama will this week (Sep 26-28) offer 1.49 billion shares through the initial public offering (IPO), representing 15.01% of its total issued and paid up capital. It has set IPO prices at Rp175-225 per share, to raise total proceeds of Rp261.19 billion to Rp335.81 billion for funding investment and working capital.

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Market This Week

Global markets are expected to maintain gains this week, but a Fed rate hike would undermine market sentiment. In Wall Street, Dow Jones gained on Friday (Sep. 21) at an all-time high. But stocks will have to navigate the Fed’s rate hike on Wednesday (Sep. 26), and its new economic forecast and statement, which is expected to sound more hawkish than dovish, Cnbc.com reported.

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The Case for EVs in Indonesia

Jakarta city administration pledged to start using electric bus for public transportation this year pursuant to the suggestion from President Joko ‘Jokowi’ Widodo. Then vice governor Sandiaga Uno, who is now running mate for Jokowi’s competitor Prabowo Subianto, said the program will be started for trial operations in some routes of trans-Jakarta. The program was responded with a plan from PT Mobil Anak Bangsa (MAB) to supply 10 units of electric bus to PT Trans Jakarta.

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Notes on Commodities

Brent crude oil hovers around US$80 per barrel to represent 38.4% gain year-on-year. This is good for the State Budget 2018, but will likely contribute to bigger oil and gas trade deficit. Upstream oil and gas companies, including Pertamina, should benefit from the relatively strong price, but petrochemical company like Chandra Asri (TPIA) will see pressures on margin because naphtha price increased 33.3%.

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ENI + Pertamina in Biorefinery

Italy’s energy giant ENI and state oil and gas company Pertamina have on Friday (Sep 21) signed a memorandum of understanding for development of the so-called green refinery, i.e. converting Pertamina’s existing conventional refinery into biorefinery. 

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Improved Banking Sector

The Financial Services Authority (OJK) reported on Thursday (Sept 20) that the banking industry booked a net profit of Rp83.69 trillion in July 2018. It grew 8.36% year on year (y/y), higher than 7.95% growth in the previous month.

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Eased Trade Tension

Many were thinking that the trade conflict between the world’s top two economies is bad for U.S. growth. The U.S. economy will expand at a robust pace in coming quarters but slow to 2% by the end of 2019, according to forecasters polled by Reuters.

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Corporate Actions to Watch

Feeds producer Central Proteina Prima (CPRO) will boost its sales of processed shrimp to reach 9000 tons this year valued at US$100 million. The rupiah fluctuation affects costs of import of raw materials for feeds. Higher export would offset pressures on import cost due to falling rupiah.

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Revisiting Sekar Group

Integrated fisheries player PT Sekar Bumi Tbk (SKBM) has just established a new joint venture called PT Sekar Fuji Foods with Japanese company Fuji Foods Corporation. The new joint venture, where Fuji Foods controls 85% interest, will produce food seasonings and other food products. This will the third facility for Fuji Foods in Southeast Asia after Thailand and Malaysia, but  the one in Malaysia is only a sub-contractor for Fuji Foods.

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Walk The Talk: Coal-to-Chemical

China Coal Energy Co Ltd, one of the largest coal producers in China, produced 49.5 million tons of coal in the first eight months of 2018, down 4.1% from the corresponding period last year. The company’s coal-to-chemical business, however, pointed to 100% growth in production for polyolefins. 

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