Category: Market

Investment Update 

Indonesian Investment Coordinating Board (BKPM) Chief Bahlil Lahadalia pledged to fixed soon twenty-four investment projects worth Rp700 trillion currently stalled due to overlapping regulations and red tapes, such as land acquisition, licensing, or other issues. There are bottlenecks at both the central and regional government levels because of overlapping regulations that need to be synchronized.

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Corporate Actions

State steel producer Krakatau Steel (KRAS) plans to finalize the debt restructuring of US$2.2 billion in early 2020. The Company has to negotiate with four banks before accomplish the restructuring. KRAS CEO Silmy Karim said the Company still has debt with four banks; Bank CIMB Niaga (BNGA), Standard Chartered Indonesia, OCBC NISP (NISP), and PT Bank DBS Indonesia, which reached 22% of the total debt.

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Market This Week

Global markets gained on Friday last week (Dec. 13) and would continue this week after the so-called Phase One deal between the United States (U.S.) and China. That said, U.S. President Donald Trump limited trade deal with China. He suspended the planned imposition of new 15% tariffs on Sunday (Dec. 15) that would have hit US$160 billion in Chinese consumer goods just weeks before Christmas, including $115 billion worth of iPhones, laptops, and other electronics, Reuters reported.

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Corporations to Watch 

Pulp and paper producer Indah Kiat Pulp & Paper (INKP) will issue medium-term notes (MTN) worth Rp2.17 trillion. Sinarmas Group, including Bank Sinarmas (BSIM), PT Sinarmas Asset Management, and PT Asuransi Simas Jiwa, will buy almost said MTN. Asuransi Simas Jiwa will buy Rp1.877 trillion, Sinarmas Asset Management Rp1 billion, and Bank Sinarmas Rp7 billion. The three parties purchased a total of Rp1.88 trillion.

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Banks Acquisition

The largest private bank in Indonesia, Bank Central Asia (BBCA), and its subsidiary, PT BCA Finance, bought all shares of PT Bank Rabobank International Indonesia for Rp397 billion value. The transaction made Rabobank Indonesia a subsidiary of BCA.

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Markets Gain

MSCI’s global stock index hit a record high on Thursday (Dec. 12) after reports the United States has reached in principle a “phase one” trade deal with China, Reuters reported. Citing two people familiar with the trade negotiations, Reuters reported that the United States had offered to cut existing tariffs on Chinese goods by as much as 50%, and to suspend new tariffs due to kick in Sunday (Dec. 15) with an aim to securing a deal.

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Bangkok Bank & Permata Acquisition

Shares of Bank Permata (BNLI) gained 4.38% to Rp1,310 on Thursday (Dec 12) following news about acquisition of up to 89.12% shares by Bangkok Bank Pcl. At the last quoted price, Permata had market capitalization of Rp36.74 trillion. This ends years of speculations about the bank, which had total assets of Rp155 trillion.

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Corporate Actions & Results

Property developer PP Properti (PPRO) booked a net profit of Rp223 billion in the first nine months to September (9M) of 2019, declined 30.3% from Rp320 billion in the corresponding period of 2018, as revenues fell 24.7% to Rp1.37 trillion from previous Rp1.82 trillion. Sales of realty dropped 47.3% to Rp895 billion from Rp1.69 trillion.

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Update on Economy

The World Bank has cut Indonesia’s economic growth forecast to 5% for 2019, from the initial 5.1% in June. For 2020, the bank has set the growth to 5.1% from 5.2% earlier, as the country will be under long-term threat from increasing global trade tensions.

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Market & Fed Rate

Global markets are set to gain today following Wall Street overnight after the United States (U.S.) Federal Reserve held interest rates steady and signaled that borrowing costs are likely to remain unchanged indefinitely. The U.S. central bank said moderate economic growth and low unemployment are expected to continue through next year’s presidential election.

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Corporate Actions

On December 9, 2019, state telecommunications operator Telkom (TLKM), through MDI Ventures, and South Korean KB Investment agreed to establish a joint fund of US$30 million for startups in Southeast Asia. MDI Ventures and other investors invested $20 million in Hong Kong-based digital payments QFPAY recently. The new funding was led by returning investors Sequoia Capital China, Matrix Partners, and Japan’s Rakuten Capital.

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State Firms Gain & Thohir Effect

Investors welcomed Erick Thohir as Minister for State-owned Enterprises (SOEs) as reflected by gains in some stocks of state firms in the past month. The Minister surprised many with his bold move to reform and transform state companies.

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