Category: Market

Banking Update

The relative high lending rates, currently at 11.77% and 11.83% last month, is also factor for the weak people purchasing power. The demand for lending is also weak. The lending rate tends to increase when the market is tight, otherwise tends to decline when the market is saggy.

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Investment Update

The Government will set up a task force for investment in the ministries, government institutions, and regional governments with the aim of easing or facilitating incoming investment. This said task force will be included on the the 16th Economic Policy to be issued in the near future.

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Budget 2018: What It Means? (3)

The government pins hope in tax collections to finance State expenditures next year because non-tax revenues might grow by less than 3%, while 2019 political dynamics prompted the governnent to set lower debt financing target. The government expects income tax to grow 8.8%, mostly from 10.1% increase in collections from non oil and gas.

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Budget 2018: What It Means? (2)

The government proposes State expenditures of Rp2204.37 trillion next year, an increase of 4.5% from 2017 State Budget (revised). This is substantially lower than the government’s initial plan. Two months ago, minister of finance Sri Mulyani Indrawati said the government expected Rp2349 trillion of expenditures next year.

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Budget 2018: What It Means? (1)

President Joko ‘Jokowi’ Widodo has on Wednesday (August 16) submitted draft of 2018 State Budget to the House of Representatives (DPR) for series of discussions in the coming months. Next year’s State Budget is interesting in the context of 2019 election cycles.

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Jonan & Arcandra Have Different View on Mahakam

Total E&P and INPEX Corporation’s contract in the Mahakam Block will expire on December 31, 2017. The Block is now in transition to full rights being managed by PT Pertamina, particularly PT Pertamina Hulu Mahakam (PT PHM). The Ministry of Energy and Mineral Resources (ESDM), however, still allows Pertamina to partner with Total in the management of the Block. The Government previously set the maximum participation of the other contractor at 30 percent, with Pertamina firmly holding the balance. Total is interested, but they’ve asked for 39 percent instead. Minister of ESDM Ignasius Jonan and Vice Minister of ESDM Arcandra Tahar have a different view on this request.

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Economic Growth Target

Indonesian President Joko Widodo is delivering his annual speech before the parliament. The President is presenting the Government’s budget draft for 2018 (RAPBN). The Government is targeting GDP growth of 5.4% next year, from an estimated 5.2% this year. Southeast Asia’s largest economy saw its annual growth of 5% in the second quarter (Q2) of this year.

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Market Snapshots & Corporate Actions

Domestic investors kept buying local stocks on Tuesday (Aug 15), lifting the composite index of the Indonesia Stock Exchange (IDX) by 0.58% to close at 5,835. Investors also tracked gains in regional and global markets. Foreign investors stopped selling mood as they booked a net buy of Rp58.5 billion yesterday, bringing year-to-date net buy to Rp4.05 trillion.

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July Trade Data & Indonesian Economy

In contrast to most predictions, Indonesia suffered trade deficit of US$271 million in July 2017, mostly due to enlarged deficit in oil and gas trading and substantial drop of trade surplus in non oil and gas trading. In the first seven months of 2017, however, Indonesia’s trade surplus expanded by 55.2% to US$7.39 billion.

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Revisiting United Tractors

United Tractors (UNTR), subsidiary of Astra International, revised up its sales target for heavy equipment to 3,250 units this year, while maintaining coal production and overburden removal. Expecting coal price is stable at around US$70 per ton, UNTR predicts heavy equipment sales to grow about 10%, while revenues from sales of spare parts and maintenance services for heavy equipment to grow by 10-15%. The production of coal and overburden removal from mining contractor business is expected to grow 5-10% next year.

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Market Update & Corporate Actions

Tracking gains in regional and global markets, domestic investors kept buying local stocks on Monday (Aug 14), lifting the composite index of the Indonesia Stock Exchange (IDX) by 0.6% to close at 5,801. Foreign investors, on the other hand, continued to book a net sell of Rp298.1 billion, cutting year-to-date net buy to Rp3.99 trillion only.

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Muamalat Speculation & Performance of Sharia Banks

Shares of Minna Padi Investama Sekuritas (MINA) have dropped nearly 34% from its recent peak, including this morning’s further correction. Still, the stock is among the best performing stocks in the past four weeks or so with 213% gain following speculation surrounding acquisition of Bank Muamalat, the second largest sharia bank in Indonesia.

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