Category: Market

Corporate Actions

Toll operator PT Astra Tol Nusantara (Astra Infra), a subsidiary of Astra International (ASII), and Canada Pension Plan Investment Board acquired 55% shares of Malaysia’ Khazanah Nasional Berhad in PT Lintas Marga Sedaya (LMS). That two companies bought the shares at a value of US$500 million. The transaction is expected to be completed in the fourth quarter (Q4) of 2019.

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Revisiting Mulia Industrindo

Ceramic producer Mulia Industrindo (MLIA) was traded flat at Rp1500 per share on Friday while Eka Tjandranegara, President Director of MLIA, sold all of his shares at the price of Rp119.92 billion. Said transaction took place on Sep. 11, 2019, at the price of Rp1100 per unit, aiming to boost liquidity.

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Market This Week

Global markets are expected to trade mixed and tend to lower this week on renewed worries over the trade talks between the United States (U.S.) and china. Chinese agriculture officials who were to visit U.S. farm had canceled their trip, dampening optimism on U.S.-China trade talks.

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Banking Update

The Bank Indonesia (BI) reported on Thursday (Sep. 19) that the banking industry has adequate liquidity. Liquidity in the interbank money market has been maintained, as reflected by a high average daily transaction volume of Rp20.03 trillion in August 2019. 

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Corporations to Watch

State miner Aneka Tambang (ANTM) obtained an investment loan facility of US$129 million from Bank Mandiri (BMRI) used to pay matured debt. Currently ANTM is working on some projects; ferronickel plant in East Halmahera (North Maluku) with installed capacity of 13,500 tons of nickel in ferronickel per year, and Smelter Grade Alumina Refinery (SGAR) in Mempawah (West Kalimantan) partnering with PT Indonesia Asahan Aluminium with a capacity of 1 million tons in the first phase.

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Market and BI-7day RR Rate

As expected, on Thursday (Sep. 19), Bank Indonesia (BI) decided to cut its benchmark interest rate (BI-7day repurchase repo rate) by 25 basis points (bps) to 5.25%, in an attempt to boost economic growth amid low inflation expectations. It was the third straight cut in three months, amid growing concerns about global growth due to continued trade tensions and a number of geopolitical risks. The overnight deposit and lending facilities were also trimmed by the same amount to 4.50% and 6.00%, respectively.

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Corporations to Watch

State pharmaceutical firm Kimia Farma (KAEF) targets to raise Rp3 trillion from its rights issue program. It will issue 1.57 billion new shares, representing 22.14% of its enlarged capital. Currently, public investors only hold 9.9% KAEF shares. The rights issue proceeds will be used for developing retail business (Rp300 billion), raw materials of medicine (Rp1.9 trillion), and other (Rp1 trillion). 

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Update on Policies

The Government injected fresh capital of Rp700 billion to state firm PT Geo Dipa Energi, used to install two geothermal power projects in Java Island during 2020 with US$350 million. Geo Dipa’s President Director Riki Firmandha Ibrahim said the fund would be sourced from banks and multilateral agency’ loans.

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Expected Fed Rate Cut

As expected, the Federal Reserve on Wednesday (Sep. 18) lowered the target range for the federal funds rate to 1.75-2% but offered few signals on the next move. It was the second rate cut this year, amid global trade and growth concerns and muted inflation pressures. Policymakers’ projections for the economy were little-changed, with growth seen at a slightly higher 2.2% this year and 2% through 2020.

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Market Snapshots

Global markets ended mixed on Tuesday (Sep. 17) as worries over oil supply faded. Saudi Arabia’s energy minister said oil production had been fully restored after the weekend attacks on its oil facility. A source told Reuters Saudi Arabia was close to restoring 70% of its oil production lost after the weekend attacks on its refinery.

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Corporate Actions

Pay television operator MNC Sky Vision (MSKY) plans to conduct a private placement to raise funds of Rp847.6 billion. The operator will release 906.53 million shares with an exercise price of Rp935 each. MNC Sky Vision’ director Janis Gunawan said, the parent company, MNC Vision Networks (IPTV), was approaching with several strategic investors to absorb the new shares. As known, French company Vivendi SA and Hong Kong-based investment firm Argyle Street Management are interested in investing in Hary Tanoesoedibjo’s companies.

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Market Crash

The Indonesian stock market crashed on Monday (Sep. 16) on pressures from domestic and global fronts. The composite index of the Indonesia Stock Exchange (IDX) dropped 1.82% to close at 6219 yesterday. The rupiah weakened back to Rp14,020 against the United States (U.S.) dollar.   

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