Posts tagged 'Indonesia'

Reading those creaking EM debt positions

Creaking where, actually?

Here’s a useful exercise from BAML on Thursday — at least if you can assume Indonesia’s the emblematic economy for everything that’s made emerging markets look so ugly this summer. Read more

Indonesia, encore

Another day — another 5.5 per cent selloff on the Jakarta stock market.

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Good old-fashioned EM sell-offs?

That’s the Jakarta Composite down more than 5.5 per cent at pixel time on Monday, anyway.

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Dear Samin – I resign

From the pen of Nat Rothschild…

Click to enlarge for the full letter to Samin Tan: Read more

Treating corporate gangrene

From the FT:

The board of Bumi Plc is weighing up severing ties with one of its Indonesian businesses as part of a restructuring aimed at reviving investor confidence in the controversy-hit London-listed coal miner… Read more

And the G20 total returns winner is…

Something to take G20 Cannes delegates’ minds off Greece…

How’s this for evidence that the emerging markets growth story is overblown? Of all the G20 countries, the US would have given you the greatest equity returns over the past year, not Brazil or China. Read more

Citi: EM rate cutters sheathed

If you were expecting widespread easing of policy rates across the emerging world, think again.

Since the end of August three EM central banks have cut rates — Brazil, Israel and Indonesia – but don’t go expecting much more monetary easing, Citi has cautioned in a recent report. Read more

Bumi and the Bakrie Brothers

Is there any more Bumi Resources can do to make itself uninvestable to the average UK institutional investor?

It seems there is, albeit indirectly. Read more

TPG links with Indonesian buy-out group

TPG, the US private equity firm, has agreed an unusual share-swap deal with Indonesian buy-out group Northstar Pacific, the FT says, to improve its access to the lucrative south-east Asian market. Under the deal, the Indonesian group will take a stake of less than 5 per cent in TPG, which will then get a 10-20 per cent interest in Northstar. The novel nature of the transaction in the private equity sector highlights the scramble for new horizons after a tumultuous few years for the industry.  The tie-up with Northstar will give TPG the advantage of doing deals in south-east Asia at a time when investors are extremely bullish about the region, although virtually none of its peers, other than the UK’s CVC Capital Partners, has a record there. For its part, Northstar will gain access to TPG’s operational expertise, fundraising machine and the ability to pursue larger corporate prey.

Indonesia eyes ownership limits for banks

Indonesia is looking at introducing rules that would cut the limit on ownership of local banks from 99 per cent to 50 per cent in a move that would force the likes of Temasek and some Malaysian banks to divest lucrative stakes, according to banking industry executives and investors. Halim Alamsyah, deputy governor of Bank Indonesia, the central bank, told the Financial Times that “the plan is to put a threshold on the maximum shares of ownership for an individual or entity”. “The objective is clear: to promote good corporate governance and strengthen control of banks,” he said.

Untying Vallar’s Gordian knot

Few mainstream institutional investors have focussed on Vallar till now – we feel this could trigger their taking a closer look.

That’s Liberum Capital talking about Nat Rothschild’s original London-listed shell company, Vallar. (Its sister company Vallares was launched on Thursday). Read more

Pertamina, Cnooc at loggerheads

Indonesia’s national oil company has run into problems over a possible joint bid for ExxonMobil’s $3.5bn stake in an Angolan oil project after a dispute with Cnooc, the Chinese state-run oil company, reports the FT. The Indonesian and Chinese companies terminated their agreement after a dispute over terms of the renewal of separate oil concessions at West Madura in Indonesia, said people close to the matter. Indonesia’s Pertamina originally approached Cnooc to team up to acquire the Exxon stake, either to make a joint bid or to agree that the winning bidder of the two would bring in the other. Pertamina, which lacks the deep-sea exploration expertise needed for the Angolan project, is seeking another partner to help finance a purchase of the Exxon stake.

Citi hit by Indonesia theft charge

Citigroup has been barred from selling wealth management services to new clients in Indonesia after allegations that a long-time employee – now in custody – stole millions of dollars from customers of its premium retail bank, reports the FT. The ban was revealed on Wednesday by Darmin Nasution, Indonesia’s central bank governor, who told legislators Citi had been instructed to “temporarily suspend” recruitment of new clients to Citigold, its flagship service for wealthy customers. Reuters cites a Jakarta-based analyst saying Citi’s Indonesia business is unlikely to be harmed by the case, which could ultimately help strengthen the country’s financial regulations.

Citi Indonesia arm hit by theft allegation

Citigroup has been barred from selling wealth management services to new clients in Indonesia after allegations that a long-time employee stole millions of dollars from customers of its premium retail bank, reports the FT. The ban was revealed on Wednesday by Darmin Nasution, Indonesia’s central bank governor, who told legislators Citi had been instructed to “temporarily suspend” recruitment of new clients to Citigold, the US bank’s flagship service for wealthy customers.

Garuda slides 23% on debut

Shares in PT Garuda Indonesia, the nation’s flag carrier, plunged as much as 23% on its trading debut on Friday as buyers were scared off by a high valuation, a sign that investors may have turned cautious on Indonesian markets, reports Reuters. Garuda’s weak start, the only fall in a major Indonesian listing in the past year, comes as the country’s once buoyant stock market has slid in 2011 and may signal problems for other planned listings by state firms and regional airlines this year. Investors only took up 3.2bn shares from 6.3bn shares offered so that underwriters had to take up the remainder. The stock was trading at Rp620 by 0300 GMT, versus an IPO price of Rp750. The broader Jakarta market was down 0.86% and has fallen about 10% this year.

Indonesian growth hits six-year high

Indonesia’s economy grew at its fastest pace in six years in the fourth quarter of 2010, beating economists’ forecasts and heightening concerns about overheating, the FT reports. The economy expanded 6.9 per cent in the three months ending in December compared to a year earlier, mirroring a spurt across much of Asia in the last quarter of 2010, with many countries defying expectations of a slowdown caused by stuttering western demand and tighter monetary policy. The region’s robust performance was led by China, which posted annual growth of 10.3 per cent, up from 9.2 per cent in 2009. Singapore, a regional bellwether, grew by 14.7 per cent on preliminary estimates, with neighbouring Malaysia likely to achieve about 7 per cent.

The new strongmen of Asia’s looming currency wars

Some intriguing movements are afoot on the currency front in Asia, where the Taiwanese dollar, the Indonesian rupiah and the Korean won have lately been the region’s strongest performers.

It’s all part of a steady intensification of regional inflation jitters — and a looming cycle of back-to-back interest rate increases and possibly, more moves towards capital controlsRead more

Indonesian growth hits six-year high

Indonesia’s economy grew at its fastest pace in six years in the fourth quarter of 2010, beating economists’ forecasts and heightening concerns about overheating, reports the FT. The economy expanded 6.9 per cent in the three months ending in December compared to a year earlier, mirroring a spurt across much of Asia in the last quarter of 2010, with many countries defying expectations of a slowdown caused by stuttering western demand and tighter monetary policy.

Indonesia to sign $15bn deals with India

Indonesia will sign 17 deals worth more than $15bn this week during a visit to India by Susilo Bambang Yudhoyono, Indonesia’s president, along with a dozen of his key ministers. The deals will be a significant boost to ties between Asia’s two largest democracies. The agreements, to be formalised on Tuesday, are part of an ambitious push by Indonesia, a member of the group of 20 and south-east Asia’s largest economy, to attract $150bn in infrastructure investment. Among the projects to be implemented over the next three years are multibillion-dollar investments by Indian energy companies Reliance Group, Archean, Adani and Tata, according to a list given to the Financial Times by the Indonesian Investment Co-ordinating Board.

Blackberry filters pornography in Indonesia

Indonesian mobile data providers on Thursday began filtering pornographic content on Blackberry smartphones, a day before a government-imposed deadline to clean up the airwaves in the world’s most populous Muslim-majority nation, the FT reports. Research In Motion, the Canadian maker of Blackberry, said in a statement that its Indonesian internet service providers were implementing technology to meet legal obligations in one of its fastest growing markets. “The technical solution meets the ministry’s stated requirements and is designed to utilise the same standard filter lists provided by the government,” the statement said. “RIM looks forward to continuing our investments in the Indonesian marketplace and to continue supporting the needs of our customers.” A spokesman declined to give technical details about how the system would work or how many million Indonesian subscribers would be affected.

Indonesian equities warning du jour

One of these is not like the others — chart from Nomura fixed income analyst Owen Job, who’s making a point about Asian inflation risk:

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Asia seeks soft stance on capital controls

Indonesia’s central bank governor, Darmin Nasution, is in no mood to slam the brakes on foreign capital flows, reports the FT. He describes capital controls to combat currency volatility – such as those announced last week by Brazil and Chile – as simply pouring “sand in the wheel” while foreign investment continues to grow apace. Other large Asian economies such as South Korea and Thailand are seeking a similar lightness of touch in their first moves to impede foreign capital flows. Markets have largely viewed their tentative initial capital controls as shows of willingness to take harder action should appreciating currencies prove a greater threat to exports in 2011.

Indonesia holds rates amid inflation fears

Indonesia’s central bank held its key interest rate steady at a historic low but said it will keep a close eye on rising prices for staple foods such as rice, which have pushed inflation well beyond internal targets. In a widely-anticipated move, Bank Indonesia held its prime lending rate at 6.5 per cent for a 17th consecutive month, reports the FT. But climbing consumer prices, which nearly hit 7 per cent last month, drew calls from some economists for a tightening of policy as early as February.

Indonesian parliament backs fuel subsidy cut

The Indonesian parliament has agreed to a politically-sensitive plan to lower fuel subsidies for millions of car owners but has postponed its implementation for several months to prepare the nation, the FT reports. Roughly one-fifth of the entire state expenditure, or $15bn, is spent on subsidies aimed at helping the poor. Critics say they are of more benefit for the well-off and should be replaced with direct aid for low-income households. The government had intended to remove part of the fuel subsidy, for private car owners, on January 1 and free up $422m toward the 2011 budget. But a majority of parties agreed at a late-night commission hearing on Monday both to the scheme and to postpone its implementation by up to six months. It is now slated to be introduced in the capital Jakarta at the end of March, at the earliest. It will later be phased in across Java and Bali. Subsidised fuel will then only be available for public transportation vehicles and motorbikes, under the proposal from the legislature’s commission for energy, mineral resources and the environment.

Vallar in $3bn Asia coal deal

Vallar, the cash shell founded by financier Nathaniel Rothschild, will pay $3bn in a complex deal that will see Rothschild acquire stakes in two large Indonesia coal companies – PT Bumi Resources and PT Berau Coal Energy, and will involve a UK listing for the interests of Indonesia’s wealthy Bakrie family, reports the FT. A new company combining the assets of the two Indonesian groups and Vallar shares will be listed in London as Bumi Plc. Trading in Vallar shares, which raised £700m in a public flotation in July, will be suspended. FT Alphaville draws parallels between the Vallar deal and the formation of Anglo-Swiss miner Xstrata.

The new Xstrata? [updated]

JPMorgan’s hyperactive M&A banker Ian Hannam has been uncharacteristically quiet over the past few months.

And now we know why. He’s been working on a deal to create a “new London-listed resources champion”. Read more

Obama seeks to repair ties with moderate Islam

Obama to push greater US ties with Indonesia

As a six-year-old schoolboy, US President Barack Obama played barefoot in Jakarta’s narrow dirt lanes. Electricity was scarce, water was drawn from wells and a dictator ruled the vast, resource-rich archipelago, the FT reports. As a member of the Group of 20 nations and a major emerging democracy of 237m people, south-east Asia’s largest economy is being wooed by Washington and Beijing as they jostle for regional influence. Bloomberg reports that the president’s visit to Indonesia aims to provide a fillip to US companies by boosting US exports and expanding overseas markets.

Tin poised for record on supply shortfall

Tin prices rose to a two-year high, less than 10 per cent below the metal’s all-time high set in mid-2008, as production problems in Indonesia, the world’s top exporter, continued to tighten the market, the FT reports. The metal, used for soldering in the electronics industry, could hit a record high before the end of the year or early in 2011, analysts and traders said. If the forecast proves accurate, tin would become the first base metal to revisit the all-time highs set in mid-2008. Analysts are also betting that copper prices could set an all-time high in 2011, the FT said.

Regional scramble for coal reaches Indonesia

The battle for resources between India and China has arrived in Indonesia, where Asia’s emerging giants are scrambling to secure the vast supplies of thermal coal needed to fire their electricity plants and power economic expansion, reports the FT. But a shortage of attractive, large-scale producers for sale and restrictive business conditions are driving fierce competition for assets in the world’s leading exporter of the commodity.