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Indonesia Economy Forum

Indonesian Economic coordinating Minister, Airlangga Hartanto, and Finance Minister, Sri Mulyani, talked about some government spending to curb the effect of commodity prices increase.

Inflation in March is around 2 % (yoy), compared to deflation around 0.02 percent (yoy) in February 2022 . Interest rate is un-change.

 
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Bali Airport sees 56% increase in passengers in March​


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A group of passengers poses for a picture upon their arrival at I Gusti Ngurah Rai International Airport in Bali. (ANTARA/Naufal Fikri Yusuf/KT)

5 April 2022

Badung, Bali (ANTARA) - The number of passengers arriving and departing through Bali's I Gusti Ngurah Rai International Airport in March 2022 increased by 56 percent compared to February, state airport operator PT Angkasa Pura I informed.

According to the general manager of PT Angkasa Pura I at I Gusti Ngurah Rai International Airport Bali, Herry A.Y. Sikado, the airport recorded 605,133 passengers and 4,774 aircraft movements in March this year.

"This achievement (was a combination of) records of domestic and international flights that have been operating again. When compared to the February 2022 period, (the number of) passengers increased by 56 percent and aircraft movements rose by 30 percent," Sikado said in Badung district on Tuesday.

The increasing trend was influenced by a number of factors, although I Gusti Ngurah Rai International Airport temporarily suspended flight operations for 24 hours during Hindu Silence or Nyepi Day on March 3, 2022, he explained.

"Some factors that triggered the increase such as the easing of flight requirements as air transportation travelers who already have obtained a complete dose of vaccine are no longer required to take COVID-19 tests," he said.

The MotoGP or Pertamina Grand Prix of Indonesia that was held in Lombok was also a factor in the hike in the number of passengers, Sikado pointed out.

Furthermore, in March, the top three departure routes served by Bali Airport were flights to Jakarta with 164,790 passengers, Surabaya with 40,544 passengers, and Makassar with 22,267 passengers.

The highest number of daily passengers on domestic flights was recorded at 26,335 on March 25, 2022, and on international flights at 1,979 on March 28, 2022.

"We are committed to providing services with strict health protocols in accordance with government regulations in anticipating the spread of COVID-19, along with increasing public confidence in using air transportation during the pandemic," Sikado said.

 

Asia’s coal price jumps as EU’s Russia ban threatens supply​

Indonesian miners were approached by potential buyers from European countries including Italy, Spain, Poland and Germany.

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Bloomberg
Published On 6 Apr 2022

Coal prices in Asia jumped as Europe’s move to ban Russian imports of the fuel threatened to deliver a new global supply challenge.

Russia is the third-largest supplier of thermal coal and dominates sales to European nations, meaning there’ll be increased competition in a seaborne market that’s experienced unprecedented price swings this year after disruptions.

Newcastle coal futures for April jumped 6.4% to $281 a ton Tuesday, the biggest gain in almost two weeks, according to ICE Futures Europe. That follows a similar advance in Europe. Prices are poised to extend gains as European consumers step up a hunt for alternatives to Russian coal.

Miners in Indonesia, the top shipper of coal for power stations, have been approached by some potential buyers from European countries including Italy, Spain, Poland and Germany, said Hendra Sinadia, executive director at the Indonesian Coal Mining Association.

It isn’t clear if the suppliers will be able to boost deliveries as they have limited spare capacity and are mandated to first prioritize local demand. Producers in Australia, another key exporter, have flagged they have limited ability to raise sales to Europe.

“A lack of investment in new capacity, and relatively strong demand in Asia leaves the market short of filling any gap left by cuts to Russian exports,” Australia & New Zealand Banking Group Ltd. strategists Brian Martin and Daniel Hynes wrote in a Wednesday note. Russia accounted for about 18% of global exports in 2020, they said.

Tight markets for coal and natural gas have created energy shortfalls at a time when wind and hydro have been unreliable in some regions. Europe and Asia have been hit the worst, with skyrocketing prices, while there are threats of power shortages in emerging nations like Pakistan.

Rising electricity demand and a lack of new coal supply should keep prices elevated, said David Lennox, a resources analyst at Fat Prophets in Sydney.

Even before new sanctions, energy companies in Europe and some parts of Asia were avoiding additional purchases of Russian fuel, and seeking alternatives, in anticipation of further government measures against Moscow.

Asian coal prices had declined from a record over the last several weeks, with the Covid lockdowns in China — the top consumer — curbing factory activity and trimming fuel demand. Still, benchmark prices are more than two-and-a-half times higher than a year ago.

Thermal coal futures in Zhengzhou rose as much as 1.2 percent as of 11:15 a.m. local time.

China’s coal imports from Russia almost halved in March from the previous month, according to shipping data compiled by Bloomberg. Talks between Chinese importers and Russian miners last month on potentially boosting trade were focused on overcoming a lack of transport capacity, coal quality and obstacles to cross-border payments, according to the China Coal Transport and Distribution Association.

 

Here are 3 hottest markets in Southeast Asia for 2022, according to Wall Street​


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PUBLISHED SUN, APR 3 2022 9:37 PM EDT
Eustance Huang@EUSTANCEHUANG

KEY POINTS
  • As we enter the next quarter of 2022, CNBC asked analysts from Goldman Sachs and JPMorgan Asset Management which Southeast Asian markets were their top picks.
  • Indonesia is a top Southeast Asian pick for both JPMorgan Asset Management and Goldman Sachs.
  • Southeast Asia as a whole is relatively insulated from geopolitical tensions elsewhere in places such as Europe, where the war in Ukraine has kept investors on edge over the region’s economic outlook, the analysts told CNBC.
Geopolitical tensions around the world have been on the rise, but Southeast Asia’s markets may offer relative safety to investors, according to top investment banks.
As we enter the next quarter of 2022, CNBC asked analysts from Goldman Sachs and JPMorgan Asset Management which Southeast Asian markets were their top picks.

Southeast Asian stocks have underperformed and been “largely ignored by global investors for a decade,” said Timothy Moe, Goldman’s chief Asia Pacific equity strategist.
Indonesia is a top Southeast Asian pick for both Wall Street banks.

Indonesia: Banking and commodity plays​

“In Indonesia, we are structurally positive on the banks as the majority of the population are still unbanked or underbanked. We are currently positioned in the leading private sector and also state-owned banks as they have been proactively driving digital adoption to accelerate financial penetration,” said Desmond Loh, a portfolio manager at JPMorgan Asset Management.

Strong commodity prices have also been beneficial for export earnings in Indonesia as well as the country’s trade balance, and that’s set to support the Indonesian rupiah as well as the nearer term growth outlook in Indonesia, he said.

Global commodity prices have been on a rollercoaster ride since the war in Ukraine broke out after Russia’s invasion in late February. Russia is a major oil producer while Ukraine is a major exporter of other commodities such as wheat and corn.

As of Monday morning in Asia, international benchmark Brent crude futures have risen more than 30% so far this year.

Vietnam and Singapore​

JPMorgan Asset Management also likes Vietnam, which Loh termed a “star performer in the past few years” in economic resiliency and growth. Vietnam is one of the few economies globally to have seen positive economic growth throughout the pandemic, he added.
“To capitalize on the growth, we are positioned in high quality consumer proxies and banks,” he said, without naming specific stocks.
Meanwhile, Singapore is the other Southeast Asian that Goldman Sachs likes.
There are three main reasons why the investment bank likes Indonesia as well as Singapore, said Moe.
  1. Improving economic and growth momentum from a region recovering belatedly from Covid-related setbacks.
  2. A banking sector that is heavily weighted in stock indexes and set to benefit from a switch to tighter monetary policy and rising interest rates.
  3. The “gradual emergence” of digital economy firms which are being included in Indonesia and Singapore indexes.
Indonesia’s Jakarta Composite has risen more than 7% this year, while Vietnam’s VN index is up about 1% in the same period. Singapore’s Straits Times index has gained more than 9%.
In comparison, MSCI’s broadest index of Asia-Pacific shares outside Japan has dropped 6%.
On Wall Street, the S&P 500 is down 4.6% so far this year, while the pan-European Stoxx 600 has dropped about 6%.
Investors have in recent weeks been grappling with a range of concerns, from the commodity price spike triggered by Russia’s invasion of Ukraine to a rising interest rate environment as major central banks like the U.S. Federal Reserve seek to fight inflation.

Shelter from geopolitical tensions​

Southeast Asia is “relatively insulated” from rising geopolitical tensions in Europe, as Russia and Ukraine account for less than 1% of regional exports, according to Loh.
“Escalation in geopolitical risks renders near-term tailwind for commodity prices to underpin the strength of ASEAN’s commodity-exporter markets,” he said, referring to the 10-member states of the Association of Southeast Asian Nations.

No ‘exodus of outflows’ expected​

Global investors have been repositioning in the last few weeks in anticipation of more aggressive moves ahead by the Federal Reserve’s monetary tightening, but the analysts expect the impact on Southeast Asia to be relatively smaller compared to before.

In March, the Federal Reserve raised interest rates for the first time since 2018, and Fed Chair Jerome Powell subsequently pledged to take tough action on inflation that is “much too high.”
The prospect of more rate hikes ahead by the Fed has raised concerns of capital outflows and currency depreciation in Southeast Asia’s emerging markets, a phenomenon seen in 2013 during the “taper tantrum” that saw bond yields spike after the Fed hinted asset purchases could wind down.

“We don’t expect an exodus of outflows [from ASEAN] as we saw in the last taper tantrum,” Loh said, explaining that country level balance sheets in Southeast Asia are “generally much healthier” now compared to a decade ago.

Most of Southeast Asia’s central banks, with the exception of Singapore, have yet to tighten monetary policy. That’s in part due to an inflation situation regionally that is relatively less severe compared with developed economies in the West.

Southeast Asian economies today are also more resilient compared to past cycles, according to Moe, who cited external balances that are in better shape as well as currencies that are attractively valued.

 

Jumbo! Freeport Issues Global Bonds Equivalent to IDR 43 T​

MARKET - vap, CNBC Indonesia
08 April 2022 10:14

PT Freeport Indonesia smelter project in East Java

Jakarta, CNBC Indonesia - PT Freeport Indonesia issued debt securities denominated in United States (US) dollars worth a total of US$ 3 billion or equivalent to Rp. 43.05 trillion (assuming an exchange rate of Rp. 14,350/US$).

MIND ID Finance Director Devi Pradnya Paramita said the global debt securities were issued in three series.

"The first series has a 5-year tenor with a coupon of 4.763% worth US$ 750 million," Devi said to CNBC Indonesia, Friday (8/4/2022).

Then the second series with a tenor of 10 years with a coupon of 5.315% worth US$ 1.5 billion.

Finally, the third series has a 30-year tenor with a coupon of 6.2% worth US$ 750 million.

Freeport Indonesia has appointed a number of bookrunners including Citigroup, HSBC, Mandiri Sekuritas, Mizuho Securities, and SMBC Nikko.

"The use of funds for financing the development capex, especially the construction of smelters," said Devi to CNBC Indonesia.

As is known, Mining Industry Indonesia (MIND ID) is a BUMN Holding the Indonesian Mining Industry of which Freeport Indonesia is a member.

Apart from Freeport, other MIND ID members include PT Antam Tbk, PT Bukit Asam Tbk, PT Inalum (Persero), and PT Timah Tbk.

As previously reported, the rating agency Fitch Ratings assigned a BBB- rating to PT Freeport Indonesia. This is the first BBB- rating that Fitch has given to Freeport.

The outlook for the rating is stable. At the same time, Fitch also gives the same rating for debt securities or senior unsecured notes that will be issued.

The BBB rating reflects Freeport's large production scale and natural resource reserves.

"This rating is also a reflection if Freeport has a long business life accompanied by the solid financial condition of the company," Fitch's official statement quoted CNBC Indonesia, Wednesday (6/4/2022).


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BUMN is Badan Usaha Milik Negara ( State owned company )
 

Indonesia, Australia face limits in coal exports to Europe ahead of Russian ban​

By Fransiska Nangoy
and Sonali Paul

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Excavators pile coal in a storage area in an Indonesian Power Plant in Suralaya, in Banten province January 20, 2010.

JAKARTA/MELBOURNE, April 6 (Reuters) - Indonesia and Australia, among the world's top coal exporters, have hit their production limits and are unlikely to meet Europe's demand for additional supplies if the European Union bans Russian coal imports, mining executives said on Wednesday.

The European Commission proposed on Tuesday new sanctions against Russia over its invasion of Ukraine, including a ban on buying Russian coal and on Russian ships entering EU ports, and said it was working on banning oil imports too. read more


The EU depends on Russia for around 45% of its coal imports, according to the European Commission website. read more

Before the EU proposal, some European buyers had already held talks with Indonesian miners in March as they sought to replace Russian supplies, a senior executive of Indonesia Coal Miners Association (ICMA) said.

"Miners cannot just increase production that quickly, it's difficult and the capacity is already very tight," ICMA chairman Pandu Sjahrir told Reuters on Wednesday.


Indonesia's government this year targeted output of 663 million tonnes, a goal miners are already struggling to meet as unexpected export restrictions in January and prolonged wet weather hit output.

The country also has tightened supervision over its mandatory domestic sales after stocks fell to a critical low at local power generators.

The energy ministry estimated that Indonesia's coal exports in January-March totalled 37.64 million tonnes, compared with 53.77 million tonnes in the same period last year.


In addition, European markets require mostly middle- to- high-grade coal while most Indonesian miners produce lower-grade coal, Hendra Sinadia, executive director of ICMA said. Freight costs for Indonesian coal to Europe are also not competitive versus other suppliers, he added.

The few miners who might have the space to expand their output will require government approval for additional production and exports, Hendra said. Such requests are typically submitted in April-June.

Indonesia's monthly coal benchmark price has already surged to a record $288.40 per tonne for April due to high global demand.

AUSTRALIA

In Australia, producers have fielded calls from buyers reliant on Russian coal and have been approached by the government to help coal buyers in allied countries, such as Poland, to replace Russian supply. read more

While benefiting from soaring prices for metallurgical coal used in steel mills as well as thermal coal used in power generation, Australian miners are unable to boost output quickly, and most of their volumes are tied up in contracts to existing customers.

Australian output has been hit by floods in New South Wales and Queensland, COVID-19 outbreaks and labour shortages, holding output below full capacity.

Total thermal coal exports for the year to June 2022 are expected to rise about 7% from a year earlier, when output was hit by China's unofficial ban on Australian coal, to 206 million tonnes, then slip to 204 million tonnes in 2023, the government said in a quarterly report on Monday.

Miners were also unable to expand production in the near term as they face tough regulatory hurdles for new mines, community and farmer opposition to building new mines, as well as capital constraints.

 

Composite Stock Price Index in a Week: Scores Records Never Stop!​

MARKET - Arie Pratama, CNBC Indonesia
09 April 2022 15:05
SHARE

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Jakarta, CNBC Indonesia - The Composite Stock Price Index (IHSG) continues its strengthening trend this week. A new record was created again.

Yesterday, IHSG closed at 7,210.84. Soared 1.17% compared to the previous day as well as being the highest record in the history of the Indonesian capital market.

During the week, the IHSG posted an increase of 1.87% on a point-to-point basis. Thus, the IHSG has posted a strengthening for four weeks in a row.

 
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Indonesia's tech giant GoTo soars on market debut​

1,742 views
Apr 11, 2022

It's one of the world's largest IPOs this year. Indonesia tech unicorn GoTo made a strong debut in Jakarta, closing 13% higher after jumping as much as 23%. The company was formed through the merger of Gojek and Tokopedia in May 2021. However, the IPO comes against the backdrop of a global tech market downturn, not forgetting a rough year for other Southeast Asia tech companies such as Singapore-based Grab and Sea.
 

Crazy! 50 SOEs Open 2,700 New Job Vacancies, Come On....​

MARKET - Lalu Rahadian, CNBC Indonesia
12 April 2022 13:05

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Jakarta, CNBC Indonesia - The Ministry of SOEs officially held the 2022 BUMN Joint Recruitment event. Through this event, thousands of job vacancies are available for people who have careers in SOEs.

The 2022 BUMN Joint Recruitment was officially launched on Tuesday (12/4/2022).

In its launch, the General Chair of the Indonesian Human Capital Forum, Alexandra Askandar, said that there were more than 2,700 job vacancies provided by this event.

"This program will present career opportunities for more than 2,700 positions in more than 50 SOEs. The preparations we have made include providing an integrated digital platform as an information and recruitment center, both implementing the core values of AKHLAK as one of the selection stages, then the help desk team which will be opened in several communication channels and anticipate various questions from applicants," said Alexandra.

SOE Minister Erick Thohir, who was present at the event, said that new recruitment must be carried out by state-owned companies in line with the transformation of SOEs. He said that a third of Indonesia's economic power is in SOEs. Therefore, SOEs need the best sons and daughters to have a career there.




Erick said that the sustainability of leadership in SOEs must continue with the presence of AKHLAK characters in each employee.

"We don't want to be a big force but a force that is misguided because it is not accompanied by good character. Intelligence without character will be evil. Wealth without character will become greed. Therefore I emphasize that the leaders of BUMN have the responsibility to continue the regeneration that is good, so that the strength of 1/3 of the economy in SOEs can continue to balance the Indonesian economy," said Erick.


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PS:

AKHLAK is Islamic Character

Akhlaq​

Akhlaq (Arabic: أخلاق, /æxˈlɑːk/, plural of (Arabic: خلق khulq which means disposition), is the practice of virtue, morality and manners in Islamic theology and falsafah (philosophy). Akhlaq is the most commonly used Islamic term for morality.[5]

The science of ethics (`Ilm al-Akhlaq) teaches that through practice and conscious effort man can surpass their natural dispositions and natural state (Fitrah) to become more ethical and well mannered. Akhlaq is a kind of normative ethical system known as "virtue ethics", which is based on "virtues, or moral character", rather than "conceptions of the right (as in Kantian ethics) or the good (as in utilitarianism)".[6][7]

Akhlaq is not found in the Quran, but its root -- kh-l-q -- is shared by khaliq (Creator) and makhluq (creature), which are found throughout the Quran. It is most commonly translated in English-Arabic dictionaries as: disposition, nature, temper, ethics, morals or manners or in general a person who has good manners, and behaves well.[8][9]: 470 

According to Hakan Ҫoruh and Abdul Hadi Shah Idil, "In the Islamic ethical tradition, ethics (akhlaq) means that one performs good behaviour spontaneously, without hesitation, and with minimal deliberation."[6]

 
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Ukraine crisis hits Indonesian cement, fertilizer industries


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Vincent Fabian Thomas (The Jakarta Post)
PREMIUM
Jakarta
● Wed, April 13, 2022

Russia's invasion of Ukraine has affected Indonesian cement and fertilizer producers with many firms in the two industries, which are among the bellwethers of the construction and agriculture sectors, facing difficulty securing certain raw materials.

State-owned cement producer PT Semen Indonesia Group (SIG) and state-owned fertilizer producer PT Pupuk Indonesia, the top companies in their respective industries, told lawmakers at a hearing on Tuesday that the industries were facing difficulty securing coal, kraft paper and a certain chemical used to make fertilizer due to the Ukraine war.

SIG CEO Donny Arsal said surging international coal prices meant coal miners preferred to export the commodity instead of selling it at domestic market obligation (DMO) prices. Thus, many cement producers were struggling to get hold of the fuel.

 

Indonesia's foreign direct investment surges 32% y/y in Q1​


By Gayatri Suroyo
and Stefanno Sulaiman

  • Q1 FDI amounts to 147.2 trln rupiah ($10.22 billion)
  • Singapore, Hong Kong, China biggest sources


JAKARTA, April 27 (Reuters) - Foreign direct investment (FDI) in Indonesia soared 31.8% on a yearly basis in the first quarter in rupiah terms, the country's investment minister said on Wednesday, boosted by a broader rise in investments in resource processing industries.

FDI climbed to 147.2 trillion rupiah ($10.22 billion) in the January-March quarter, Bahlil Lahadalia said, listing Singapore, Hong Kong and China as the biggest sources.


Including domestic sources, total investment during the period surged 28.5% from January-March 2021 to 282.4 trillion rupiah.

The ministry's data excludes investment in banking and the oil and gas sectors.

The business community was typically more aggressive in its capital expenditure in the later part of the year, said Bahlil, who predicted a further rise in investment going forward.

"I'm sure the second quarter will be much better. We have a database and it has shown an increase," he told a virtual news conference.


He said regulatory changes, including a law passed in 2020 that streamlines investment procedures, had been well received by investors.

Southeast Asia's largest economy has been trying to attract investors into downstream industries to get more value out of its abundant natural resources.

Indonesia has stopped nickel ore exports since 2020 to encourage investors to build smelters in the country and has ambitions to develop an integrated electric vehicle industry.


Bahlil said he had no information about a meeting between top Indonesian officials and Tesla (TSLA.O) in Texas, after senior minister Luhut Pandjaitan posted photographs on social media of a meeting with the U.S. carmaker's chief executive Elon Musk this week.

Indonesian officials have in the past few years said Tesla was exploring possible investments in an EV battery factory in the country. Tesla was not immediately available for comment.

Bahlil also highlighted Indonesia's plans to ban exports of unprocessed bauxite and tin as a potential driver of investment.

($1 = 14,408 rupiah)

Reporting by Gayatri Suroyo and Stefanno Sulaiman Editing by Ed Davies

 
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Bank Rakyat Indonesia (BRI), one of biggest state owned banks in Indonesia, gives dividend to the government 14.04 trillion Rupiah or around 1 billion USD. Total dividend given by BRI is 26 trillion Rupiah ( around 2 billion USD ), around half of the banks stake are traded in Jakarta stock exchange and own by Indonesia public and foreign investors.

Just for information, out of 10 biggest banks in Indonesia, 7 are state owned, 1 national private owned bank ( around 50 % stakes own by public in stock market), 2 are foreign own banks.

Two biggest banks in Indonesia are state owned banks, Mandiri bank and BRI.


Bank Mandiri profit up by 70% in Q1

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Headquarters of state-owned Bank Mandiri in Central Jakarta.(./.)


Norman Harsono (The Jakarta Post)
PREMIUM
Jakarta ● Thu, April 28, 2022



State-owned Bank Mandiri, one of the largest lenders in Indonesia, posted a 70 percent annual increase in net profit to Rp 10 trillion (US$693.64 million) in the first quarter, riding on Indonesia’s economic recovery.

Bank Mandiri’s financial results show its net interest income grew 17.11 percent year-on-year (yoy) to Rp 20.48 trillion in the January-March period. Non-interest income rose 13.6 percent yoy to Rp 8.65 trillion, mainly from cash management fees and internet banking fees.

“The COVID situation improved, so the economic recovery accelerated, and therefore we are optimistic that Indonesia will continue a positive growth trend,” Bank Mandiri finance director Sigit Prastowo said on Wednesday.

 
Sri Mulyani Press Conference for 2022 state budget revision and 2023 state budget

 
Meeting with Finance Minister about fostering Islamic economy in Indonesia. Inside the meeting is 26 Ministries and institutions, including the head of Islamic Economy Committee which is headed by Vice President.

 

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