Steel Update
Roberto M. Cola, the chairman of the Southeast Asia Iron and Steel Institute (SEAISI), recently said that the global excess steel capacity was seriously affecting the viability of the biggest steel companies of the world. The World Steel Association is forecasting a decrease in world steel demand by 0.8 % for 2016 following a contraction of 3% in 2015. In the past 3 years global steel products were under pressure. Global industry capacity reached 2 billion tons while its production reached 1.5 billion tons.
Cement Data & Regional Imbalances (3)
President Joko ‘Jokowi’ Widodo proceeds with new tradition of celebrating Idul Fitri outside Jakarta. This year, he opted to be in Padang, the capital city of West Sumatra province to strengthen his campaign of developing the whole archipelago, not just Jakarta and Java Island.
Lahmeyer’s Power Plant Contracts
Other than final investment decision (FID) for Tangguh LNG Train 3 worth US$8 billion, Indonesia’s energy sector provided positive news from the signing of engineering, procurement, and construction (EPC) contracts with Lahmeyer International (Germany) for the development of 17 power plants with combined generating capacity of 935 MW this week.
Promising Tourism and Transportation Stats
The number of foreign tourist arrivals in Indonesia rose 7.37% in May from a year earlier, the statistics bureau said on Friday. In the meantime, number of air transportation passengers grew 12.05% to 6.9 million in May from April, contributing to 18.04% growth in the first five months of 2016.
Medco-Newmont Deal: Conspiracy Theories
Shares of Medco Energy (MEDC) surged 21.3% in the opening minutes of trading at Indonesia Stock Exchange (IDX) Friday morning shortly after market participants got confirmation about Medco Group’s acquisition of PT Newmont Nusa Tenggara (NNT) despite limited understanding about details of the deal. The deal was announced in less than three days after the House of Representatives (DPR) passed tax amnesty bill into law.
Oil & Gas Journal
The Government of Indonesia is planning to accelerate the development of 16 oil and gas block in Natuna. So far, only 5 working areas are in production while 7 areas remain in exploration stage and 4 areas in transmission phase.
Key Takeaways from Medco-Newmont Deal
Shares of Medco Energi (MEDC) gained 5.63% Thursday (June 30) as some investors responded confirmation of acquisition of shares in PT Newmont Nusa Tenggara (NNT). Shares of Bumi Resources Minerals (BRMS), which sells indirect interest 18% in PTNNT in the structured deal, meanwhile, advanced 4% with 343 million shares exchanged hands.
Medco-Newmont Deal
Newmont Mining Corporation has entered into a binding share sale agreement with PT Amman Mineral International (AMI) to sell its 48.5% interest in PT Newmont Nusa Tenggara (NNT) for a total consideration of US$1.3 billion. A consortium of Medco Group and AP Investment then acquiring 82.2% shares of NNT from PT AMI for US$2.6 billion.
More Actions in Manufacturing
Shares of Champion Pacific (IGAR), a packaging material producer, soared 25% Wednesday (June 29) with significant trading volume upon confirmation about acquisition of majority shares by Japanese investors. Rally in the stock continued with another 25% gain Thursday morning, also with significant trading volume.
Suspicious Changes at Sugih Energy’s Oil Trading Business
PT Sugih Energy Tbk (SUGI) has just released its full year 2015 results with some suspicious changes made in the fourth quarter related to its oil trading business. In the quarter, SUGI placed Sugih Energy International Pte Ltd, the oil trading subsidiary, as non-current assets held for sale.