One Fuel Price policy
Last week the President announced that fuel prices are to become the same across the entire archipelago. The President made the announcement while he was visiting Papua—due to weak infrastructure and poor distribution channels, prices of gasoline and diesel are about ten times as expensive in Papua compared to Java. In order to realize President Joko Widodo’s “One Fuel Price” policy, state-owned oil and gas company Pertamina will need to invest about Rp380 billion in additional infrastructure.
Q3 Corporate Results: Telkom
Telco giant PT Telekomunikasi Indonesia (TLKM) Tbk booked net profit of Rp14.73 trillion in the first nine months of 2016, an increase of 27.6% from the corresponding period of 2015, thanks to strong performance in the first half. In the third quarter, Telkom’s growth in sales, operating and net profit were moderated.
Q3 Corporate Results: Jasa Marga
State-owned toll road developer and operator Jasa Marga (JSMR) booked net profit of Rp1.3 trillion in the first nine months of 2016, an increase of 30.3% from the corresponding period of 2015, despite softening in the third quarter.
Corporate Results for 9M 2016
Textile and garment giant PT Sri Rejeki Isman Tbk (SRIL) booked net profit of US$44.9 million in the first nine months of 2016, an increase of 17.2% from the corresponding period of 2015. The Company’s third quarter was significantly stronger than the same period last year, but weaker than the first half of 2016.
Automotive Market Update
Indonesia’s car sales reached 783,470 units in the first nine months of 2016, an increase of 2.5% from the corresponding period of 2015. Monthly sales slightly rose 0.13% from September last year, but it was a 3.3% decline from August. Motorcycle sales, meanwhile, dropped by 9.7% in the first nine months of 2016.
Growing Presence of MCC Overseas in Indonesia
MCC Overseas Ltd (MCCO), an international EPC service company wholly owned by Metallurgical Corporation of China Ltd (MCC), gained more grounds in Indonesia market, thanks to growing involvement of China in funding infrastructure projects and processing/refining of minerals.
Weaker Third Quarter for HM Sampoerna
PT HM Sampoerna (HMSP) Tbk, the largest cigarette producer in Indonesia, booked net profit of Rp9.01 trillion (US$693 million) in the first nine months of 2016, an increase of 19.5% from the corresponding period of 2015. Overall, however, the Company reported weaker performance in the third quarter.
Metals & Steel Industry
Steel is among the best performing product with almost 50% gain in the past 12 months or so. This contributed to rally in iron ore prices, which advanced almost 5% this month and 11.3% since October 2015. Tin, zinc, and lead also followed with double digit gains in the period, but copper lost ground.
Restriction for Investments in Nickel (and other Mineral) Smelters
Compared to other minerals (iron, bauxite, and copper), nickel has attracted lots of investments in smelting facilities in the past few years. Consistency in implementing nickel ore export ban and crackdown by the new government in the Philippines for environmental concerns might benefit Indonesia in the long run, especially if metal prices recover.
Stronger Third Quarter for Kalla’s Bukaka: Next?
Bukaka Teknik Utama (BUKK), a company controlled by the family of vice president Jusuf Kalla, booked net profit of Rp25 billion in the first nine months of 2016, an increase of 33.6% from the corresponding period of 2015, lifted by stronger performance in the third quarter.