Category: Market

Reshuffle at Pertamina

Minister of state-owned enterprises Rini Soemarno has finally dismissed Elia Massa Manik as president director of state oil and gas company Pertamina. Nicke Widyawati, director of human resources, has been appointed acting president director. Leakage of crude oil pipeline in East Kalimantan and supply disruption of subsidized gasoline have been mentioned as factors contributing to the changes. Really?

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Corporate Actions & Results

Flag carrier Garuda Indonesia (GIAA) claimed that its earning improved in the first quarter (Q1) this year, and so it is optimistic to book profit this year. Pahala N. Mansury, GIAA’s president director, said that the airliner had implemented some strategies that support earning improvement.

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Market & the Economy

Negativity on the Wall Street flowed through to Asian markets on Friday, with regional stock indexes tracking lower in early trade amid declines in the technology sector, Cnbc.com reported. Nymex’s crude oil declined 0.13% to US$68.20 per barrel in Asian trading this morning. Oil prices softened after having spiked to highs not seen since 2014.

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Bank Rates

Indonesia’s central bank (Bank Indonesia/BI) on Thursday (April 19) decided to leave its benchmark 7-day reverse repo rate (BI 7-day RR Rate) unchanged at 4.25% for the seventh straight meeting. Policymakers said that the current policy stance was consistent with efforts to maintain macroeconomic and financial stability amid rising external pressures.

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Steel Update

In the next couple of years the global economic situation is expected to remain favourable with high confidence and strengthening recovery of investment levels in advanced economies. And so steel demand in both developed and developing economies is expected to show sustained growth momentum with risks being relatively limited. That said, possible adverse impact from rising trade tensions, and the U.S. and E.U. interest rate movements could erode this current momentum.

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Commodities & The Economy

Brent crude oil advanced closer to US$74 per barrel in Asian trading this morning to make 40% gain year-on-year. The State Budget 2018 is set to report substantial windfall because the budget was composed on crude oil price assumption of US$48 per barrel (assuming minister of finance Sri Mulyani Indrawati was right in pointing to Rp1.1 trillion of net additional revenue per US$1 increase of oil price).

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Corporate Actions

Conglomerate Astra International (ASII) allocates capital expenditure (capex) of Rp25 trillion for this year funded by internal cash. It allocates Rp10 trillion for investment and focuses on long term business.

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Market Snapshots

Asian stocks headed for a mixed start following a U.S. session dominated by the drop in Treasuries, as investors continue to assess the speed of monetary policy tightening, Bloomberg reported. The Federal Reserve’s Beige Book reported a solid outlook for the economy despite trade concerns.

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Strong First Quarter for Bukit Asam

Pretty much as predicted, PT Tambang Batubara Bukit Asam Tbk (PTBA), subsidiary of state mining giant INALUM, booked net profit of Rp1.45 trillion in the first quarter of 2018, jumped by 67% from the corresponding period last year on improved margins.

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Update on Investment & Infrastructure

Indonesia and China marked their cooperation by the signing of two memorandum of understanding and five contracts worth US$23.3 billion on Friday last week (April 13) in Beijing, China. Coordinating Minister Luhut Binsar Panjaitan said this agreement was part of China’s Belt and Road Initiative (BRI), an ambitious road, rail and construction project spanning dozens of countries across Asia, Africa and Europe. The contracts were signed by companies from both countries, consisting of (1) two projects with total investments $17.8 billion to build a hydropower plant on the Kayan river (North Kalimantan), (2) a $700 million contract to develop facilities to convert coal to dimethyl-ether into gas, (3) Joint venture- power development in Bali worth $1.6 billion, and (4) the development of steel smelter worth of $1.2 billion.

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Corporate Actions & IPO

State-owned toll road operator Jasa Marga (JSMR) has obtained loan facility of Rp7.73 trillion from seven banks and one financing firm for infrastructure. This loan will be used to fund construction of Batang-Semarang toll road (75 km) which costs for Rp11.04 trillion. The said loan has a tenor of 15 years, carrying interest rates of 9.08%.

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Market & the Economy

Bloomberg reported that Asian equities headed for a higher start today after strong earnings from some industry heavyweights lifted U.S. equities. Chinese stocks pointed to a rebound after a surprise move by the People’s Bank of China to cut the reserve requirement ratio to improve funding arrangements for banks.

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