SingCham Weekly 20 Mar: Budget Surplus Rp131.8tr in February
Monday, 20 March 2023
Budget Surplus Rp131.8tr in February
Indonesia recorded Rp 131.8tr, or about $8.6bn, in budget surplus as of end-February 2023, according to the Finance Minister. The minister reported that the state revenue totaled Rp 419.6tr in the first two months of 2023, exceeding the country’s spending which amounted to Rp 287.8tr. The Rp 131.8tr surplus is also equivalent to 0.63% of GDP. Data showed that the country’s primary balance had a surplus of Rp 182.2tr. The ministry/agency spending totaled Rp 76.4tr with the money going to the acceleration of school operational grants (locally known as the Bantuan Operasional Sekolah or BOS) and social assistance, among others. “We will continue to use the state budget to protect Indonesians from possible shocks, including the global economic pressure, etc,” Sri said.
UBS takes over Credit Suisse
UBS is set to take over its troubled Swiss rival Credit Suisse for $3.25bn, aimed at stopping the stricken bank from triggering a wider international banking crisis. The deal, in which Switzerland’s biggest bank will take over the second largest, was vital to prevent economic turmoil from spreading throughout the country and beyond, the Swiss government said. The move was welcomed in Washington, Frankfurt and London as one that would support financial stability, after a week of turbulence following the collapse of two US banks. The Fed and the central banks of Canada, Britain, Japan, the EU and Switzerland announced they would launch a coordinated effort on Monday to improve banks’ access to liquidity, hoping to calm worries rattling the global banking sector. The SNB announced that 100 billion Swiss francs of liquidity would be available for the UBS takeover.
Financial system remains stable and to function orderly
MAS said it will continue to closely monitor the domestic financial system and international developments, and stands ready to provide liquidity through its suite of facilities to ensure that Singapore’s financial system remains stable and financial markets continue to function in an orderly manner.
Singapore to get 1GW of renewable energy from Cambodia
Singapore could soon be given the green light to import 1 gigawatt of renewable energy yearly from Cambodia.The new deal would be the Republic’s largest cross-border electricity contract to date, making up a quarter of the nation’s low-carbon electricity import target by 2035, and about 8% of the entire country’s needs that year. The Energy Market Authority (EMA) said on Thursday that electricity retailer Keppel Energy has received conditional approval to import hydropower, solar and potentially wind power from Cambodia’s Royal Group Power Company via new subsea cables that would transmit the electricity over more than 1,000km.
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Meta to lay off 10,000 more workers after 11,000-cut in November
Meta will lay off 10,000 more workers and incur restructuring costs ranging from $3-5bn, with CEO Mark Zuckerberg warning economic instability could continue for “many years.” He added that the Facebook parent plans to close 5,000 additional open roles that it has not yet filled. Due to continued economic uncertainty, Zuckerberg noted that the company should prepare for “the possibility that this new economic reality will continue for many years.” The new round of layoffs follows a previous round of cuts, announced in November, that affected more than 11,000 workers, which equated to roughly 13% of Meta’s overall staff.
Illegal clothing imports top $2bn in value
Illegal clothing imports reached 300,000 tons worth $2.1bn every year, including about 30% of used clothing valued at around $631m, according to an industry association. The illicit import severely damages the domestic apparel industry and prevents the creation of hundreds of thousands of new jobs in the sector, said Redma Gita Wiraswasta, the chairman of the Indonesian Fiber and Filament Yarn Producers Association or APSyFI “If we can substitute the import with domestic products, we can create new jobs for 500,000 people and it would definitely make up for our sluggish [apparel] export,” Redma was quoted.
Maybank downgrades Singapore banks to ‘Neutral’ on NPL
Maybank has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting. This is as central banks continue to fight inflation with slowing growth. “Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes. The banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.
Indonesia, Malaysia discuss steps to improve protection for migrant workers
Indonesia and Malaysia continue the discussion on optimizing the protection of Indonesian migrant workers. Indonesian Minister of Manpower Ida Fauziyah stated during her working visit to Kuala Lumpur, that she had met with Malaysian Government officials to discuss ways to optimize protection for migrant workers and solve problems related to them. “Main issues regarding the implementation of MoU on the placement and protection of PMI are fair law enforcement and residual issues of PMI protection.”
New species of cockroach found in Singapore
A new cockroach species has been found in a forested nature reserve in Singapore. Named after Pheromosa, a cockroach-like Pokemon that appears in the seventh generation of the video game series, the species was discovered through comparing differences between the male genitalia of specimens with its closest relative from Borneo, among other checks. Entomologist Foo Maosheng, who co-authored the finding, said: “There are some similarities between Pheromosa and the delicate cockroach that we found, such as having a long antenna, wings that mimic a hood and long slender legs. Unlike hardy American cockroaches, which most people tend to associate cockroaches with, Nocticola pheromosa is more delicate as those of its kind tend to live in well-protected ecosystems.
Indonesia to become third-largest lithium battery producer
Chief Investment Minister Luhut Pandjaitan said that Indonesia would become the third-largest producer of lithium batteries by 2028, as the SE Asian country worked to expand its downstream industry. “By 2025, we can produce our own lithium batteries. And so we will be the world’s third largest lithium battery producer by 2027 or 2028,” Luhut said. Government data shows that there is $31.9bn worth of investment in the pipeline for Indonesia’s battery chain development until 2026. About $12.35bn will be invested in Kalimantan. Also in the pipeline is investment totaling $9.84bn in Sulawesi, and the remaining $9.78bn is in North Maluku.
Singtel ‘on stronger footing’ as it focuses on improving ROICs
UOB KH reported that Singtel’s business segments could see favourable tailwinds in 2023. Coupled with the price increases seen in January, the teleco’s Singapore consumer segment is set to experience higher data roaming revenue from China’s reopening. Singtel implemented a price increase in January this year, with competitors following suit. Coupled with the continued strong take-up of 5G bundled plans in Singapore, they expect post-paid average revenue per user (ARPU) to continue its upward momentum in 2023, backed by rational competition from incumbent telcos.
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