Fighting Gas Brokers: Walk the Talk
Luhut Binsar Pandjaitan, the interim energy and mineral resources minister, admitted that existence of brokers in domestic gas distribution contributed to significantly higher price paid by consumers, including industrial customers like steel, ceramic, tire, and other manufacturers. The previous minister Sudirman Said had once announced a plan to end such practice. The problem, the whole system seems not serious enough to act.
Rights Issue of J Resources
PT J Resources Asia Pacific (PSAB) Tbk plans to issue 2.64 billion new shares, representing 10% of its enlarged shares capital, through non-preemptive rights issue scheme. The gold producing company, controlled by the family of Johan Lensa, expects up to Rp954 billion from the action, which will significantly strengthen the balance sheet.
Commodities & The Economy
Weak price of most commodities weighed Indonesian economy from higher growth in the second quarter. Volatility remains out there, but most of them improved significantly since July, lifting hopes for economic recovery in producing areas in Sumatra, Sulawesi, and Kalimantan. Reentry of Indonesia in the aluminium and nickel chains might also help both export and State revenue side in the third quarter.
Coal: Further Rally?
The government has set coal reference price (HBA) for September 2016 at US$63.93 per ton, an increase of 9.83% from the same month last year and 9.5% above August 2016.This is also the highest price since May 2015. How further up the commodity will be?
Tax Amnesty in Action (16)
One conglomerate known for overseas assets and thousands of shell companies is said to publicly announce his participation in the tax amnesty program this afternoon. As to whether this is real, let’s wait. Yesterday, however, was the new record in the program, where 2397 taxpayers declared Rp27.3 trillion worth of assets.
Relaxation of Mineral Ore Export: Self-Destructing (2)
Acting minister of energy & mineral resources Luhut Binsar Pandjaitan told lawmakers Thursday (Sept 1) that relaxation of mineral ore export is needed to help cash-flow of companies building the smelting facilities. We believe this is a self-destructing policy, given ongoing pressures in the metals market and sacrifices by some companies already investing in mineral processing.
Brighter Second Quarter for Adaro
PT Adaro Energy Tbk (ADRO) is among the best performing stocks with 107% gain year-to-date as investors anticipated new equilibrium in the coal market. The Company’s sales revenue declined 15.9% in the first half, but net profit inched up 2.5% to US$122.11 million.
Pertamina vs Petronas in First Half
Manor Racing Team has replaced Indonesian Formula One driver Rio Haryanto by Mercedes protege Esteban Ocon following Rio’s failure to meet financial requirements for the remaining of the 2016/17 season. State-owned oil and gas company Pertamina is Rio’s main sponsor. Petronas, Malaysia’s oil and gas giant, meanwhile, continues to become partner of champions Mercedes Benz Team.
Further Coal Rally?
Like palm oil, further rally in thermal and coking coal would help Indonesian economy significantly. Coal contributes to the State revenue through corporate income tax and royalties. Some indicators suggested further rally in the commodity.
Palm Oil Journal
KPB Nusantara, the joint marketing office of state plantations, sold most CPO packages auctioned off Friday (August 26) at Rp8950/Kg (VAT excluded). The same day last year, similar packages were sold at Rp5180/Kg. Current prices accordingly represent 73% gain.