Jakarta. Property developer Lippo Cikarang, a subsidiary of publicly listed Lippo Karawaci, is reporting double-digit growth on its profit for the first six months of 2015, backed by high demand in residential estates.

The company booked around Rp 478 billion ($35.3 million) in net profit from January to June, up 18 percent compared to Rp 403 billion in the same period last year. Sales, meanwhile, grew by 12 percent to approximately Rp 955 billion.

Revenues from landed houses, house offices and apartments doubled year-on-year to Rp 477 billion in the six-month period from Rp 222 billion, making up half of the company’s total revenue.

Industrial and commercial businesses contributed Rp 373.3 billion, or 39 percent of Lippo Cikarang’s total revenue.

“When faced with challenges that come with the country’s economic slowdown, which has caused weaker purchasing power and greater competition in the property market, especially skyscrapers, we’re still working hard for the Orange County project,” Lippo Cikarang president director Meow Chong Loh said in a statement released on Thursday.

Lippo Karawaci, whose shares are listed on the local stock exchange under LPCK, is the developer of a 3,000-hectare industrial estate under the same name.

Its ongoing projects include Orange County, a 322-hectare, mixed-use project located on the eastern outskirts of Jakarta. The project is estimated to worth Rp 250 trillion in total investment.

The developer’s total marketing sales in the first six months of 2015 reached Rp 1.5 trillion, roughly 60 percent of its 2015 target of Rp 2.5 trillion, while recurring income reached Rp 88 billion.

GlobeAsia

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Jakarta. Homegrown web development and digital advertising firm Bubu.com is set to hold the third IDByte conference in Jakarta next month, in search of Indonesia’s next rising star in the local start-up scene.

“The rapid growth of the digital and technology industry has transformed people’s lives. IDByte aims to place Indonesia on the global digital map,” said Shinta Dhanuwardoyo, founder of Bubu.com, during a luncheon with reporters in Jakarta on Wednesday.

With the theme “Connected e-Conomy,” the IDByte conference will run from Sept. 30 to Oct. 2 in Pacific Place mall, South Jakarta, with an array of speakers that includes Communication and Informatics Minister Rudiantara and Facebook vice president of business development John Lagerling.

As part of the conference, Bubu.com will also hold the ninth annual Bubu Awards to dub one local start-up company as “The Best Start-Up Company in Indonesia.” The winner will fly to the United States for a one-week boot camp with Silicon Valley Asia Technology Alliance (SVATA).

The prestigious title in 2013 went to gaming company DreadOut, which developed a psychological survival horror PC video game under the same name.

“One of the challenges for local start-ups is a lack of skilled developers who can help the company grow globally. This is where we seek to open a network between local start-ups and Silicon Valley,” Shinta said, referring to a neighborhood in northern California, home to many of the world’s largest tech companies.

“We want to encourage more tech entrepreneurs in Indonesia… to prove that the country is not just a market, but we can also be industry players,” she added.

Bubu.com will start its quest for the country’s best start-up firm next week with visits to several big cities across Indonesia, including Jakarta, Bandung and Makassar, South Sulawesi.

The company typically receives up to 500 entries for the award, according to Shinta.

First held in 2011, the IDByte conference attracted up to 600 participants in 2013. For this year, Shinta hopes to see as many as 700 people participating in the conference.

“People are now more [tech] savvy and curious about the digital world,” she said.

GlobeAsia

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Jakarta. The economy will find it hard to meet the Indonesian government’s expectations for 5.2 percent growth this year, an official at the Indonesian Central Bureau of Statistics said on Wednesday.

Earlier on Wednesday, the statistics bureau (BPS) reported Southeast Asia’s largest economy expanded 4.67 percent in April-June from a year ago, better than a Reuters poll forecast of 4.61 percent, but the slowest since 2009.

“Only consumption on food and beverages had increased. Other consumption, like for clothes, declined. So it will be hard to reach the government’s outlook,” Suhariyanto, deputy head of BPS told reporters.

Consumption accounts for 55 percent of Indonesia’s gross domestic product.

Indonesia’s government targets 5.7 percent growth this year according to the 2015 state budget. But its latest outlook is for growth at 5.2 percent.

Indonesia’s GDP growth slowed to 4.67 percent in the second quarter of 2015 from the same quarter a year earlier, but on a quarter-to-quarter basis GDP rose 3.78 percent according to the BPS report.

Challenging times

Economists backed Suhariyanto’s pessimism, citing various challenges for the government to achieve its targeted growth.

Dian Ayu Yustina, an economist with Bank Danamon Indonesia in Jakarta told reporters that the government and the central bank on Tuesday held a coordination meeting which outlined the pressures and risks associated with the slowdown in the domestic economy.

She explained that officials present at the meeting said that they will maintain a prudent and consistent monetary policy, but will also push the fiscal stimulus to materialize in the second half.

Despite President Joko Widodo’s commitment and focus on government spending in the infrastructure sector, the business community predicts that economic growth will remain sluggish since the impact of government spending will take time.

Dian further added: “At this point, it will be hard to achieve the government’s target this year at 5.2 percent year-on-year, since that means we need to see the second half grow by 5.7 percent year-on-year, which is unlikely.”

She added that the growth in the second half of 2015 will depend on the pace of the government spending, particularly on infrastructure projects.

“Progress in [spending on] infrastructure projects is important as it could reverse the negative perception on the economy,” she said.

External factors are equally pressing on the Indonesian economy, Dian said.

“Challenges remain, particularly [amidst] the turbulent global economic situation. China’s stock market caused concern recently on its economic growth. Based on our model, a 1 percent slowdown in China’s growth could have an impact on Indonesia’s growth by 0.3 percent to 0.45 percent,” Dian said.

“China’s slowdown would have a bigger impact compared to a slowdown in the United States, the European Union or Japan,” she added.

Dian said Bank Danamon is maintaining its full-year growth forecast at 4.96 percent, “though with downside risks of around 4.81 percent due to slow government absorption or potential backlash from China’s slowdown.”

Ryan Kiryanto, an economist with Bank Negara Indonesia conveyed a similar sense of pessimism, saying economic growth may only reach 4.6 percent to 4.8 percent this year if the government fails to address the problem of slow government spending.

“We’re not even sure the budget absorption in the second semester will be any better,” he said.

Joko’s administration has so far spent up to 11 percent of the Rp 290.3 trillion ($21.47 billion) allotted for infrastructure in the state budget this year, Finance Minister Bambang Brodjonegoro has said.

Low government spending is not the only culprit behind the slow economic growth, said Enny Sri Hartati, the director of an economic think tank from the Institute for Development of Economics and Finance (Indef)‎.

Enny said ‎the government needs to find ways to solve problems in the manufacturing industry by increasing work incentives and easing regulation permits to combat issues of terminating workers due to low production and the slowdown in exports.

Reuters, GlobeAsia, Investor Daily

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Jakarta. Matahari Putra Prima, an operator of multi-format modern retailers, delivered positive earnings in the first half of this year despite the challenging economic situation, thanks to a variety of productivity measures, the company’s chief said.

Matahari Putra Prima’s net income for the first sixth months of this year rose to Rp 175.5 billion ($12.9 million) from Rp 138.9 billion in the same period last year, the company said in a statement on Friday. Last year’s figure excluded Rp 85.6 billion in extraordinary gains for the period.

Total net sales rose 6.6 percent to Rp 6.9 trillion, while operating profits increased 29.4 percent to Rp 220.3 billion.

“Despite the challenging macroeconomic landscape that has prevailed for the past six to eight months, Matahari Putra Prima was still able to deliver positive and strong operating profit growth due to margin enhancement, execution of planned productivity measures and cost savings programs,” said Noel Trinder, chief executive of Matahari Putra.

Matahari Putra’s stores sales grew by 2.1 percent, despite weaker economic environment.

“The company prepared the infrastructure of business processes in the first half and will remain to do so for the rest of the year. This process of growth will enable us to be well-positioned in terms of capturing market share, geared toward delivering enhanced value to our stakeholders,” said Trinder, adding that the management of the company remains confident that Indonesia’s medium to long term economic fundamentals are strong.

During the first half of the year, Matahari Putra opened four hypermarket outlets of Hypermart, 14 Foodmarts and four Boston Health & Beauty stores. At the end of June, Matahari Putra was operating a total of 111 Hypermart outlets, 71 Foodmart outlets and 106 Boston Health & Beauty Stores.

Matahari Putra and GlobeAsia are both affiliated with the Lippo Group.

GlobeAsia

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Jakarta. News from the Investment Coordinating Board which showed foreign direct investment had accelerated in the second quarter of the year failed to lift the performance of the main stock index in Jakarta on Monday as it slipped to its lowest point since April last year, in line with the decline in stock markets across Asia.

The benchmark Jakarta Composite Index lost 1.76 percent on Monday to close at 4,771.29. About 4.5 billion shares worth Rp 4.79 trillion ($344 million) were traded on the Indonesia Stock Exchange (IDX) through 172,866 transactions on the day, The JCI closed at 4,765.73 on April 10, 2014.

Foreign investors, which made up 46 percent of the trading activity on Thursday, booked a net sell of Rp 576.5 billion on the day. Decliners beat gainers 214 by 75.

“On the technical side, today’s fall is in line with a declining trend in the region,” William Suryawijaya, an analyst at Asjaya Indosurya Securities, told Globe Asia on Monday.

An index that traces 64 basic industry and chemicals stocks declined 3.85 percent, leading the sectoral decline, followed by an index that tracks 42 miscellaneous industry — including automotive and textile industry stocks — which fell 2.65 percent.

The top laggard stocks was Bank Mandiri, a heavy weight stock with Rp 221 trillion market capitalization. Bank Mandiri’s stocks, traded under BMRI, declined 4.5 percent to Rp 9,550 per share.

Stock markets across the region were in the red on Monday. China’s Shanghai Stock Exchange reported the biggest fall at 8.5 percent — its biggest one-day fall since February 2007 — followed by Hong Kong’s Hang Seng index at 3.09 percent.

Indonesia led the decline in the Southeast Asia region, followed by the Philippines Stock Exchange with a 1.54 percent fall.

However, William noted that the fall is still within expectations. “The market is very cautious right now, but it’s not yet really worrying, since foreign investors are only selling around Rp 500 billion of their stocks,” he said.

“The fall would be worrying if the net sell of foreign investors reached trillions.”

Hans Kwee, an analyst at Investa Saran Mandiri, said that investors are also being cautious in anticipation of the upcoming release of corporate earnings report for the first half of the year. Publicly-listed companies in Indonesia are scheduled to announce their six-month financial report in the next few weeks.

The continued decline of the rupiah — which has fallen by 8 percent against the US dollar so far to 13,453 this year — is also putting more pressure on the country’s stocks, according to Hans.

“The stock market will probably still move on the declining trend this week, but it may start to show improvements next week with the release of the financial reports,” said Hans on Monday.

Indonesia’s rupiah has hit 17-year lows this year, according to Reuters data.

The post FDI Increase Can’t Stop IDX’s Largest Drop of Year as Asia Markets Falters appeared first on The Jakarta Globe.

Jakarta. Seismic survey and geophysical service company Gelombang Seismic Indonesia aims to earn up to Rp 25 billion ($1.8 million) in an initial public offering next month, banking on the remaining potential of untapped oil reserves in Indonesia.

The Bekasi, West Java-based company is selling 150,000 new shares, equivalent to 42.86 percent of paid-up capital, at an indicative range of between Rp 130 and Rp 170 per share.

The shares will be on offer from Aug. 4 to Aug. 6 with Panca Global Securities serving as underwriter. Listing on the Indonesia Stock Exhange (IDX) is scheduled for Aug. 13.

Gelombang Seismic Indonesia — which provides seismic data recording services to oil companies — plans to use 70 percent of the proceeds as capital expenditure, mainly to buy new recording equipment. The remaining 30 percent will be used as working capital to support the company’s ongoing contracts.

The company hopes to boost revenue by 50 percent to approximately $9 million this year from about $6 million last year with the help of new machinery.

“Indonesia still has a lot of  potential oil reserves, but the exploration data is still lacking … As long as companies still search for oil in Indonesia, seismic services will still be needed,” Barita Sihombing, a director at Gelombang Seismic Indonesia, said during a public presentation in Jakarta on Friday.

“Weak oil prices have little impact on seismic services, because seismic services are investments to find oil reserves for the next five to ten years,” he added.

The company has conducted projects within Indonesia for state energy firm Pertamina and Australia’s Cooper Energy, while gaining overseas experience with Mozambique-based Bizu Hydrocarbon in a two-step project in 2011 and 2013.

The company has worked on three ventures so far this year and is currently bidding for three additional projects with a combined worth of approximately $20 million.

“Hopefully, we can start these projects in the second half of the year,” Barita said.

Endeavors currently in auction include a $2.5 million project in South Sumatra and a $6 million project in West Sumatra, both of which are held by local oil companies.

The company is also bidding on a $12 million project in Central Kalimantan for an Australian firm, Barita added.

GlobeAsia

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Jakarta. Indonesia’s main stock index slipped on Friday as retailers’ stocks tumbled following the government’s decision to increase import duty on consumer goods entering the country.

The Jakarta Composite Index (JCI) lost 0.94 percent to 4,856.6 on Friday, ending the week with a 0.3 percent loss. About 3.4 billion shares worth nearly Rp 4 trillion ($296.6 million) were traded on the Indonesia Stock Exchange (IDX) on Friday. Foreign investors, which made up 43 percent of the trading activity on Thursday, booked a net sell of Rp 123 billion.

Shares in the miscellaneous industry, which consists of automotive distributors and garment makers, took the biggest fall at 2.6 percent, while consumer goods stocks followed with a 1.22 percent drop.

The fall came one day after the Finance Ministry announced a ministerial regulation increasing import duty for consumer goods — from clothing to snacks and alcoholic beverages — by between 10 percent and 150 percent.

For instance, the new regulation stipulates that clothes are subject to import duty ranging from 20 percent to 25 percent depending on the item. Previously, most clothing pieces were subject to 15 percent import duty at most.

The highest tariff is subjected to alcoholic beverages that contain less than 80 percent alcohol – such as brandy and whiskey — at 150 percent.

“We believe that this is another effort by the government — after removing the luxury tax last month — to raise tax revenue from retail products,” Matthew Wibowo, an analyst at Mandiri Sekuritas, said in a memo to investors on Friday.

“From our scope, we think that this regulation will impact [high-end retailer Mitra Adiperkasa] the most, since about 60 percent of its products are imported,” he added.

Shares of Mitra Adiperkasa, a fashion and lifestyle retailer behind the import of brands such as Starbucks Coffee and American clothing line True Religion, fell 6.4 percent to Rp 4,675 on Friday.

Ace Hardware, which sells home improvement products, also saw a decline as its shares fell 3 percent to Rp 640.

“If [the retailer] imports most of its products, it will definitely be effected [by the new regulation]… However, just how much and to what point it impacts sales growth highly depends on the class of the products and the buyers,” Reza Priyambada, an analyst at NH Korindo Securities, said on Friday.

Aside from the import tariff hike, Reza pointed out that the rupiah’s continued fall against the US dollar and global negative sentiments have also placed more pressure on the JCI.

The rupiah has depreciated by 8 percent against the US dollar so far this year, reaching 13,448, data from Bank Indonesia showed.

GlobeAsia

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Jakarta. Bank Harda Internasional, a small-sized local lender, seek to raise Rp 450 billion ($34 million) to Rp 500 billion from selling shares in an initial public offering next month, in a move to boost capital and expand lending.

Bank Harda set to sell 950 million shares, or 25 percent, of its paid-up capital, at Rp 115 to Rp 150 per share, said  Antonius Prabowo Argo, the bank’s president director, on Monday. Bank Harda, Antonius said, is looking to “strengthen its long-term financing structure,” with proceeds from the IPO.

The lender has appointed Lautandhana Securindo as the underwriter for the shares sale, which is scheduled for Aug. 4 to 6. Bank Harda will lists its shares on the Indonesia Stock Exchange on Aug. 12.

The lender is conducting bookbuilding from July 13 to 23 in order to gauge investors’ interest in the share sale and expects to secure final approval from Financial Services Authority (OJK) by the end of the month.

Bank Harda targets net income of Rp 18 billion this year, up 44 percent from last year’s Rp 12.5 billion, on the back of above-average lending growth, Antonius said.

Its loans grew by 25 percent in the first six months of this year, more than double the industry average of 11 percent.

Bank Harda will be the 10th company going public this year after property developer Binakarya Jaya Abadi’s IPO earlier this month. Eight companies that went public so far this year had to cut their IPO size or offer shares at lower price range of amid slowing economic growth that pares companies’ valuation in the stock market.

GlobeAsia

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Jakarta. Bridestory, a homegrown online wedding marketplace, has established a joint venture with Singaporean media conglomerate Mediacorp in a bid to increase its presence in the Southeast Asia region.

The Indonesian startup will partner with Mediacorp’s wedding magazine, Style: Wedding, to form bridestory.com.sg, which will also hold the Singapore publication’s bridal blog, explained a Bridestory spokesperson.

“We are excited to collaborate with MediaCorp and leverage MediaCorp’s extensive media platforms to take us to the next level, [first] in the Singapore wedding market and eventually the regional market,” Kevin Mintaraga, chief executive and founder of Bridestory, said in a statement released on Thursday.

MediaCorp is controlled by Temasek, an investment holding company owned by the Singaporean government.

With 52 years of media experience under its belt, the company has expanded its presence to include online platforms across the region, including in Indonesia.

Last April, MediaCorp acquired a 52 percent stake in KapanLagi Network, an Indonesian digital media company that operates online news websites Merdeka.com and Kapanlagi.com.

Since its launch in April 2014, Bridestory has attracted over 10,000 wedding vendors, booking more than 25,000 visitors monthly. The company recently secured Series-A funding — typically given to start-up companies in early stages of development — from German venture capital firm Rocket Internet.

GlobeAsia

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Jakarta. Shares of Indonesia’s major state-owned enterprises are taking a big hit in the local stock market as investors are spooked by the national economic slowdown and greater government intervention, according to analysts.

Indonesia’s main stock gauge and those of its regional counterparts have been in the red this week, dragged down by negative market sentiments after the Greek referendum result on bailout plans.

In the past three days alone, the Jakarta Composite Index (JCI) has lost 2.2 percent to 4,781.57, leading to a 7-percent drop since the beginning of the year. Among the top ten losers so far this year include Bank Rakyat Indonesia, the country’s biggest bank by assets, and cement maker Semen Indonesia.

Shares of Bank Rakyat Indonesia fell 2.4 percent to Rp 10,225 on Tuesday, down by 12 percent year-to-date. The state lender holds a market capitalization of Rp 255.3 trillion ($19.12 billion).

Another state enterprise, Semen Indonesia, which has a market capitalization of Rp 68.5 trillion, lost 0.86 percent to Rp 11,525. It has fallen by 28 percent since the beginning of the year.

Meanwhile, toll operator Jasa Marga dropped 2.1 percent to Rp 5,875, falling by 17 percent since last December. It holds about Rp 40.6 trillion in market capitalization.

“Investors have been clearing away from state-owned enterprises because they’re vulnerable to government intervention, such as lowering cement prices and discount on toll roads,” Kiswoyo Adi Joe, an analyst at Investa Saran Mandiri, told reporters in Jakarta on Wednesday.

Kiswoyo added that investors are also losing interest in state enterprises due to the government’s upcoming Rp 39.92 trillion capital injection, which aims to increase state enterprises’ capacity in infrastructure development. In listed state companies, the capital injection will come in the form of a rights issuance, which is feared to dilute public ownership.

Still, state constructions firms such as Wijaya Karya and Waskita Karya still have some opportunities ahead, according to Kiswoyo.

“If infrastructure development pans out, construction stocks should be able to support the index,” he added.

Haryajid Ramelan, chairman of the Indonesian Association of Securities Analysts (AAEI), pointed out that the domestic and global economic slowdown has also affected the performance of state enterprises in the stock market.

The Asian Development Bank and World Bank revised down their forecasts for Indonesia’s economic growth to 5 percent and 4.7 percent respectively, correcting their rosy outlook of late last year on the back of President Joko Widodo’s moves to cut gasoline subsidies to push infrastructure spending. The spending, though, has barely materialized so far this year due to red tape.

Adding to the concerns of companies in Indonesia, the rupiah has depreciated by 7.3 percent to 13,346 against the US dollar since the beginning of the year, data from Bank Indonesia showed.

“Under current conditions, most investors would rather wait for more certainty, but that hasn’t appeared,” he said.

GlobeAsia

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