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.
Sugih Energy, KKR & Lemang Block
Stock market authority suspended the trading of Sugih Energy (SUGI) effective this morning after losing its value significantly in the past few trading days. Trading was suspended last Friday but resumed Monday morning. After two consecutive days of losing substantial value, IDX halted again the trading pending further decisions. As you know, SUGI dropped from Rp320 on July 22 to Rp114 yesterday, losing 64% in one month.
Commodities & The Economy
Structural reforms take sometime. New growth engine, manufacturing, including mineral processing, will only been seen in more than five years. In the short-medium term, Indonesia still need recovery of commodities to support the State Budget and overall economic growth. Developments in the past two weeks were quite promising, but volatility remains out there.
Coal & China Factor
International media reported yesterday that Vietnam’s coal imports surged 141% year-on-year to 1.31 million tons in July. It is indeed a good news. Market players, however, expect more good news from China, which is still the world’s single largest user.
Commodities & The Economy
The government sets a modest 5.3% GDP growth next year on lacklustre commodities. State revenues from tax and non-tax of natural resources (oil & gas, coal, minerals, palm oil, natural rubber) are set significantly lower next year due to prolonged weakness in the commodities.