Category: Market

Corporate Actions & IPO

The Jakarta Government has gained approval from Regional Parliament (DPRD) to divest its shares in beer producer Delta Djakarta (DLTA) this year. Vice Governor of Jakarta Sandiaga Uno told reporters that his government is now seeking financial advisor for said transaction.

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Market This Week

Trading activity at Indonesia’s stock market this week should return to normal after the recent long holiday of Eid Al Fitr (Lebaran). The Stock Market opened for trading on Wednesday last week (June 20) with the composite index of the Indonesia Stock Exchange (IDX) falling 2.87% to close at 5,821 on Friday (June 22) following global bearish market.

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PT Newmont Nusa Tenggara v. Governor of West Nusa Tenggara

At the end of 2011, the Governor of West Nusa Tenggara issued two decrees authorizing two Regional Tax Assessments (SKPD) for PT Newmont Nusa Tenggara (now PT Amman Mineral Nusa Tenggara). The Company was required to pay taxes for heavy equipment motor vehicle, but the Company refused to comply with the decision and filed an appeal to the Tax Court two years later. The Tax Court sided with the provincial government and rejected the appeal petitions. The verdicts eventually became legally binding. In March 2014, however, the Company decided to file two Reconsideration petitions. It took the Supreme Court more than four years to rule.

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Corporate Actions

Unilever Indonesia (UNVR), the market leader for consumer goods, has on Thursday (June 21) gained approval from shareholders on divestment of its spread assets for Rp2.92 trillion value. Assets divested to PT Upfield Consulting Indonesia reach Rp2.66 trillion and assets divested to PT Sigma Silver Indonesia reach Rp195.48 billion.

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Market & Rupiah

Global markets extended correction on Thursday (June 21) as concerns about the trade dispute between the U.S. and China continue to weigh on investor sentiment. Today all eyes will be on OPEC and its allies as they meet in Vienna.

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Rates and Oil

Indonesia’s central bank (Bank Indonesia/BI) said it is consistently committed to and focuses on a short-term policy on strengthening economic stability, primarily the stability of Rupiah exchange rate. So the BI is ready to adopt further policies that are pre-emptive, front loading, and ahead of the curve in facing any new direction of the Fed’s and ECB’s policies in the upcoming Board of Governors Meeting in June 27-28, 2018.

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Market Concerns

Foreign investors sold off local stocks on Wednesday (June 20), the first trading day in Indonesia after the long Eid al-Fitr holiday. Foreign investors booked a net sell of Rp2.04 trillion yesterday, bringing year-to-date net sell to Rp45.48 trillion. Investors were focused on selling financial stocks (-3.54%), agriculture (-2%), consumer goods (-2.37%), and property (-2.96%). Banking stocks led market correction, with Bank Rakyat Indonesia falling 5.7%, followed by Bank Central Asia (-3.4%), Bank Mandiri (-3.6%), and Bank Negara Indonesia (-6.5%).

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Market Opens

Trading activity in Indonesia’s stock market will resume today after being closed for seven trading days due to Ramadan and Eid Al Fitr (Lebaran) celebration. On the last trading day (June 8), investors at the Indonesia Stock Exchange (IDX) opted to sell local stocks over global development concerns.

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Corporate Actions to Watch

Plantation firm Bakrie Sumatera Plantation (UNSP) plans to reduce its debt to Rp7.23 trillion by the end of this year from current Rp13.95 trillion, which represents half of its assets value. The Company is set to launch the reverse stock (10 for 1), entry point to convert debt into shares or equity under private placement scheme. This private placement will boost its authorized capital to Rp5.48 trillion.

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Upside Trend in Rates

Global interest rates are now on the upside trends. The U.S. Federal Reserve last week (June 13) raised the target range for the federal funds rate (FFR) by a quarter point to 1.75-2.00%, as widely expected, saying that the labor market continued to strengthen and that economic activity had been rising at a solid rate. Policymakers projected two additional hikes by the end of this year.

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Escalating Trade War

U.S. President Donald Trump threatened new tariffs on Chinese goods in an escalating trade war between the world’s two biggest economies, Reuters reported. Trump said on Monday (June 18) that Washington would impose a 10% tariff on US$200 billion of Chinese goods after Beijing’s decision to raise tariffs on $50 billion in U.S. goods.

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Update on Samin Tan’s Borneo (2)

First quarter of 2017 was promising for PT Borneo Lumbung Energi & Metal (BORN) Tbk, producer of coking coal, when it booked net profit of US$43.17 million. Dispute over status of contract of work (CCoW) of subsidiary PT Asmin Koalindo Tuhup, however, turned BORN back to loss in the first quarter of 2018.

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