Merger & Acquition Updates
Australia-based miner BHP Biliton Ltd agreed to sell 75% interest in Indomet Coal project to PT Alam Tri Abadi, subsidiary of coal miner PT Adaro Energy Tbk (ADRO). The transaction is valued at US$120 million, equivalent Rp1.6 trillion.
Lower Forex Reserves & Sluggish Global Growth
The Central Bank (Bank Indonesia/BI) reported on Tuesday (June 7) that Indonesia’s official reserve assets position stood at US$103.6 billion as of end of May 2016, lower than the end of April 2016 level registered at US$107.7 billion.
The Markets & Corporate Fund Raising
Asian shares held near six-week highs on Wednesday, on a brightening outlook in the energy sector and hopes that the U.S. Federal Reserve will not raise interest rates in the coming months after a disappointingly weak U.S. jobs report, Reuters reported. At home, the composite index of the Indonesia Stock Exchange (IDX) gained 0.77% to close at 4,934 on Tuesday (June 7) led by agriculture and mining sectors which rose 2.25% and 2.49% respectively. Year to date, agriculture has gained 5.82% and mining hiked 27.8%.
Jababeka + DW Development in Banten
PT Kawasan Industri Jababeka (KIJA) Tbk has on Friday, June 3rd, signed memorandum of understanding with South Korean group DW Development Co Ltd for the development of 1,400 hectares of land bank in Tanjung Lesung, Banten province. Tanjung Lesung is one of Special Economic Zones (SEZ) granted some facilities by Jokowi-Kalla administration.
China Dev Bank & Sinarmas
PT DSSP Power Kendari, an indirect subsidiary of PT Dian Swastatika Sentosa (DSSA) Tbk—unit of Sinarmas Group, has on June 3rd, 2016 signed term 12-year facility agreement with China Development Bank Corporation for commitment of up to US$150 million to finance Kendari-3 coal-fired power plant project in Southeast Sulawesi.
Commodities & State Finances
Thanks to smokers, the government should’t worry about correction of revenues from tobacco excise. In fact, the government mulls a plan to collect more from them. While excise was meant for control of consumption, we have to be honest that this is probably the single most stable source of State revenues regardless of any economic slowdown.
Investment Updates
Indonesia recently welcomed investment and trade offered by the Republic of Belarus, one of which is the cooperation on the production of vehicles to transport heavy equipment such as dump trucks and tractors. In addition to competitive pricing, Vice President Jusuf Kalla asked Belarus to establish after-sales services such as repairs or spare parts sales point.
Toll Road Projects Update
Lack of funding and uncertainty surrounding revision of State Budget 2016 forced the government to slow down some toll road projects. They’re known facts. Budget 2016 revision has just been started, and may take several months to be effective. Toll road projects, however, have returned to faster speed in recent weeks.
Market Snapshots & Corporate Actions
Asian shares hit a five-week high on Tuesday after the Federal Reserve Chair Janet Yellen said that the U.S. interest rate hikes were likely on the way. Nevertheless, she held back on any reference regarding the timing, Reuters reported. At home, the composite index of the Indonesia Stock Exchange (IDX) gained 0.87% to close at 4,896 Monday (June 6) with foreign investors booking net buy of Rp549.1 billion, bringing year-to-date net buy to Rp5.4 trillion.
Corporate Fund Raisings
PT Indosat Ooredoo Tbk (ISAT) plans to issue bonds worth Rp3.5 trillion in the second half of this year to pay the existing debts. The company aims to lower its debt in the dollar denomination to 10% of its total debt this year, from 24% as of December 2015.