Revisiting XL Axiata
XL Axiata (EXCL) has recently issued Rp2.18 trillion worth of Sukuk, proceeds of which would refinance existing debentures. Investors responded well the successful fund raising with 32.5% gain year-to-date. Still, EXCL is now valued only 1.5 x equity, nearly half the valuation of Indosat’s equity and one-third of market leader Telkom (TLKM).
Growing Optimism for Connectivity (II)
Greater Jakarta is considered the world’s second largest megapolitan area with a population of over 30 million people. Decades of inaction, however, makes it the worst to live in. People spend five-six hours per day to commute. This is also an area with the most inefficient use of fuel. Compared to the previous administrations, we have to admit that Jokowi-Kalla regime has been lot more aggressive in improving connectivity.
Growing Optimism for Connectivity (I)
For decades, investment and economic activities were focused in western part of Java Island thanks to its more established infrastructure. Things, however, started to diversify easternwards and outside Java in the past few years. Cement consumption in Java grew 7.3% in the first four months of 2017, but western part of Java (Banten, Jakarta, and West Java) was flat at 5.3 million tons.
Infrastructure Journal No. 18/2017
President Joko ‘Jokowi’ Widodo has two more years to accomplish some major infrastructure projects—water reservoirs, railways, including mass-rapid transit (MRT), light-rail transit (LRT), and high-speed train (HST), roads, including toll roads, ports, and airports.
Toll Road Projects Update
For some, President Joko ‘Jokowi’ Widodo is the will of history when it comes to infrastructure development. Around 1,000 KM of toll roads are being built in Java, Sumatra, Sulawesi, and Kalimantan, substantially higher than around 600 KM built in the previous 40 years, with total investment of around US$10 billion. Progress?
Cement Market Review
Domestic cement sales grew 11.5% year-on-year to 5.06 million tons last month, while export skyrocketed 124.7% to 224,277 tons (including clinker). This is the strongest monthly sales so far this year, lifted by strong demand in Jaba, Sumatra, Sulawesi, and Nusa Tenggara. Accordingly, domestic cement market grew 3.4% to 19.82 million tons in the first four months of 2017.
Mass Transportation and The Growing Oil & Gas Deficit (2)
Traffic congestion in most major cities in Indonesia will cost the State significantly if politicians resume fuel subsidy policy in the event of substantial hike in oil price. The central government has initiated some mass public transportation projects, but without participation of provincial and city administrations all over the country, the country will continuously under threat of the growing population of cars and motorcycles.
Mass Transportation and The Growing Oil & Gas Deficit (1)
Minister of transportation Budi Karya Sumadi defended the government’s policy in developing mass public transportation infrastructures such as light-rail transit (LRT), mass-rapid transit (MRT), bus rapid transit (BRT), and railways, saying they would not only easing off traffic congestion, but improving air quality and energy efficiency.
Toll Road Projects So Far
Physical construction progress of Medan-Binjai toll road Section II and III have reached 93.31% and 93.78% respectively as of May 5th, 2017. That means these sections will soon enter commercial operation. Progress for the whole project, however, was 60.57% due to land acquisition issues at Section I.
Infrastructure & Tourism Industry
About 3.01 million foreign tourists visited Indonesia in the first quarter of 2017, an increase of 15.07% from the corresponding period of last year. Interestingly, number of tourists entering the country through cross-border posts jumped 28% to 128,824 people. Very small compared to the total visits, but today President Joko ‘Jokowi’ Widodo is scheduled to inaugurate new cross-border post in Skouw, Papua.