Monday, 9 February 2015

Bank BTN seeks loan from World Bank.
Bank Tabungan Negara (BBTN) is seeking loans from the World Bank to finance its expansion. In 2015, the company plans to distribute housing credit of Rp125t and targets non-performing loans of 3.35%, down from 4% in 2014. (Source: Investor Daily) Jasa Marga: To raise tariffs by 9-12% in Sep 15. Jasa Marga (JSMR) plans to raise the tariffs in 11 of its 13 toll roads it operates in September. The tariffs are likely to be raised by 9-12% depending on inflation data. The two toll roads that will not see price increase is Jakarta-Cikampek dan Tol Bandara and Jakarta-Sedyatmo. In 2014, JSMR served 1.32b cars, rising 4.4% from 1.26b cars in 2013. Capex in 2014 was Rp4.82t, of which Rp3.23t was used for new toll-road construction.

Automobile Proton enters Indonesia.
Industry Minister Saleh Husin confirms the cooperation between Malaysian car manufacturer Proton and Citra Lestari Adiperkasa is not to develop a national car. The cooperation does not involve the government or state-owned enterprises and is purely a private-sector activity. As no state budget was issued by the government, the cooperation is not for the development of a Indonesian national car.

GDP 4Q14 growth of 5.01%.
In the rebased (2010) GDP, Indonesia’s economy grew 5.01% yoy in 4Q14. Private household consumption remained the key growth driver (up 5.01%) while fixed investments grew 4.27% yoy. Exports of goods and services remained in contraction amid the downturn in global oil and commodity prices. For the year, the Indonesian economy expanded 5.02%, slowing from 5.58% in 2013 and was the slowest in five years since 2009.

Foreign exchange reserves increased to US$114b.
Indonesia’s foreign exchange reserves increased from US$111.9b as at Dec 14 to US$114.2b in Jan 15. Bank Indonesia said the reserves could pay off its foreign debt and finance 6.6 months of imports.

Indonesian Air Force Chief of Staff visited Singapore.
The Chief of Staff of the Indonesian Air Force (TNI-AU), Air Chief Marshal (ACM) Agus Supriatna was in Singapore for an introductory visit. The visit by ACM Agus is to underscore the strong and long-standing defence ties between Singapore and Indonesia. ACM Agus called on Second Minister for Defence Mr Chan Chun Sing after inspecting a Guard of Honour at MINDEF. He also called on Chief of Air Force Major-General Hoo Cher Mou. They reaffirmed the close ties and professional cooperation between both air forces, and reiterated their mutual commitment to strengthening the friendship between the two air forces.

Singapore FX reserves fell in January.
Singapore’s official foreign exchange (FX) reserves fell in January from the previous month, hurt by a dip in the value of the country’s gold and foreign exchange holdings. Singapore’s foreign exchange reserves stood at S$340.36 billion at the end of last month, down from S$340.44 billion at end-December. In US dollar terms, Singapore’s FX reserves fell for a seventh straight month to US$251.46 billion from US$256.86 billion at end-December.

Tuesday, 10 February 2015

Acset Indonusa: Six Astra executives enter Acset.
Six executives of Astra Group have entered the board of directors and the board of commissioners of Acset Indonusa (ACST). The reshuffle at Acset follows the completion of the acquisition of 40% of ACST by United Tractors (UNTR). The extraordinary general shareholders meeting (EGM) of Acset, which was held on 9 Feb 14, appointed Gidion Hasan the new chairman. Hasan has previously served as the vice president of UNTR.

Pembangunan Perumahan Rp8t rights issue.
The Indonesian government has committed to inject as much as Rp19.6t into construction SOEs or by subscribing to any potential rights issues from the four construction SOEs. Meanwhile, total statefund injection for SOEs proposed to the Parliament reached Rp48t. Among the SOEs, PTPP has asked for an injection of Rp4.4t and if this is approved by the Parliament, PTPP may conduct a bigger rights issue to raise as much as Rp8.6t. Four state-owned construction companies are likely to conduct rights issues to raise Rp32.5t in 2015-16.

Shopping mall rents set to fall.
Rents for shops and restaurants in Singapore are expected to fall this year, with prime rents on Orchard Road forecast to recede by 3 to 5% and rents in suburban malls by up to 3.0%, according to real estate services firm Savills. It appears that landlords in the prime shopping districts are beginning to hold out olive branches to retailers, many of whom are confronted with the twin woes of higher fixed costs and lower sales. Much of the new retail space coming onto the market in 2015 will be in central areas, unlike in 2014 when most of the new supply was in suburban areas. Developments with large retail areas that are slated to open this year include Capitol, the National Gallery Singapore and South Beach.

Smartphone penetration in Singapore highest globally.
People in Singapore use instant messaging more frequently compared to their counterparts in Southeast Asia, according to the results of a survey. The country also ranked highest globally for smartphone penetration, with nine out of 10 respondents having access to a smartphone. The survey by Deloitte’s Global Technology, Media and Telecommunications (TMT) revealed that females are more active users of instant messaging in Singapore, Indonesia, the Philippines and Thailand. Singapore clocked the highest frequency of usage, with 79% of females and 73% of males saying they used instant messaging on their smartphones over the past seven days. In Singapore, instant messaging continued to rise in popularity: Usage increased 9% on-year in 2014, while Short Messaging Service (SMS) usage has declined 8%. The most common reason for using instant messaging among Singaporeans was because friends and family members were also using it.

Wednesday, 11 February 2015

Garuda Indonesia revenue growth of 12%.
Garuda Indonesia (GIAA) targets revenue growth of 12%. The company is cutting its capex from US$200m to US$130m, reducing the number of business-class seats from 12 to 8 in a plane, and eliminating inefficient overseas flights.

Mandom halted operations due to floods.
Mandom Indonesia (TCID) halted its factory operations in Sunter-Jakarta since Sunday as the factory is overwhelmed by the flood. TCID posted unaudited revenue of Rp2.3t, up 13.3% yoy, bringing full-year net profit up 8.7% to Rp174.1b. Sales were primarily supported by domestic sales which contributed to 70% of total sales.

Pioneerindo Gourment to open 30 new restaurants in 2015.
Pioneerindo Gourmet International (PTSP), which owns the California Fried Chicken fast food restaurant brand in Indonesia, plans to open 30 new restaurants in 2015. About 15% of the new restaurants will be opened under a franchised partnership scheme. It costs about Rp1.5b to open one store, assuming the premise is rented. Currently, the company operates 273 restaurants and 38 franchised restaurants. The company is targeting revenue to grow 12-15% yoy to Rp495b and net profit to grow 5% yoy to Rp38.5b.

Pharmaceutical companies will increase their prices.
Pharmaceutical companies plan to increase their average selling price by 5-10% in 1Q15. The massive price hike will depend on the movement of the rupiah. Moreover, the increased electricity tariff and labour cost will reduce the companies’ profits.

Singapore Airlines reduces fuel surcharges.
Flagship carrier Singapore Airlines (SIA) said that it will reduce its fuel surcharge for tickets issued on or after Feb 26, 2015. The reduced fuel surcharges will apply to Singapore Airlines and SilkAir flights, SIA said in a news release. They will see decreases of between US$5 (S$6.80) and US$83 (S$113) per sector.

Higher prices for hawker food & groceries.
There was a greater on-year increase in the prices of Spore hawker food and groceries last year compared to 2013, revealed Minister of Trade and Industry Lim Hng Kiang. Mr Lim said the prices of hawker food increased 3% on-year in 2014, while it increased 1.9% on-year in 2013. The prices of household groceries also went up by 3% on-year last year. The on-year price increase for household groceries was 2.3% in 2013.

Ex-China Sky CEO to pay S$2.5m penalty for misleading statements.
The former CEO of China Sky Chemical Fibre, Mr Huang Zhong Xuan, has agreed to pay a civil penalty of S$2.5 million to the Monetary Authority of Singapore (MAS) for making misleading statements in announcements to the market.  Mr Huang will also offer to surrender 10% of his shareholdings in China Sky as part of the settlement. He has agreed not to assume the role of a company director or be involved in the management of any Singapore Exchange-listed entity for three years. The Commercial Affairs Department (CAD) investigated Mr Huang in Feb 2012 after he was found to be making misleading statements in announcements to the market relating to China Sky’s purchase and subsequently aborted acquisition of Fujian Land.

Thursday, 12 February 2015

Jababeka develop US$1b JV project with Plaza Indonesia.
Plaza Indonesia-Jababeka (PIJ), a JV between Plaza Indonesia (PLIN) and Jababeka (KIJA), plans to do ground breaking for a 12ha mega project in Cikarang-West Java in Jun 15. The first phase of this project would consist of: a) a 50,000sqm mall, b) a 200sqm retail area, c) a mixed-use building, d) apartments, and e) a 5-star hotel. This first phase of development is expected to be completed in 2018. PLIN holds 70% of PIJ and KIJA owns 30%. Besides this mega project, KIJA and PLIN also have a 4ha landbank for future developments. KIJA owns 70% of this JV while PLIN owns 30%. (Source: Investor Daily) Pembangunan Perumahan: PP Properti to list in May 15. PP Properti, the property subsidiary of Pembangunan Perumahan (PTPP IJ), is going for a public listing in May 15. The company targets to raise Rp1.5t but no details are mentioned regarding the number of shares to be issued. PTPP will be conducting roadshows in the region, such as Singapore, Malaysia and Hong Kong.

Automobile: Car sales in January could reach 83,000 units.
The Association of Indonesia Automotive Industry Indonesia (GAIKINDO) estimates Indonesia’s car sales could reach 83,000 units in Jan 15 (Jan 14: 103,718 units, Dec 14: 78,802 units). The association targets flat car sales growth for 2015 (1.2m units) due to higher interest rate, flat economic growth and a weak rupiah. The association expects low-cost green cars to make up 20% of total car sales in 2015. The Ministry of Industry reported car wholesales of 96,149 units in Jan 15. GAIKINDO expects domestic production to grow 5% to 1.9m units.

Parliament approved budget up to Rp37.3t for SOE companies.
Previously, the government proposed an allocation of Rp7.0t, for Aneka Tambang (ANTM) but the Parliament approved only Rp3.5t. But the allocation for Bank Mandiri (BMRI) was rejected.

Rupiah to hit 17-year low.
The Indonesian rupiah may depreciate to a level that has not been seen since the 1998 Asian financial crisis by the end of this year, as investors may reduce inflow to the Southeast Asia country in line with United States’ economy regaining strength, London-based financial firm Barclays said in a recent report. Barclays forecasts the rupiah to reach 13,250 per US dollar by year end, a level that was last seen in August 1998, according to Bloomberg data. The currency has weakened by nearly 3% against the greenback to 12,794 so far this year, posting its weakest level in almost two months on Thursday, according to data from Bank Indonesia. The rupiah fell 2% against the US dollar last year.

‘Trade with caution’ with UOL shares.
The Singapore Exchange (SGX) advised investors to exercise caution when dealing in shares of property group UOL. The “trade with caution” warning came after UOL said it was not aware of any reasons that could possibly explain the 6.4% rise in its share price on Feb 11. The Exchange is expected to investigate all possible transgressions and will work with the relevant regulatory agencies to pursue actions to maintain a fair, orderly and transparent market.

Report on Money Lending soon
The Law Ministry will wait until a final report is submitted by the Advisory Committee on Money Lending before deciding on guidelines on appropriate conduct for debt collectors (or loan sharks). The report is expected to be in by the first quarter of this year. The minister said that criminal sanctions can be taken against debt collectors when they engage in criminal conduct such as causing hurt. But there are also other types of conduct that may not be clearly criminal in nature but cause alarm to those targeted.

Six-fold increase in drone applications.
The Ministry of Transport (MOT) and Civil Aviation Authority of Singapore (CAAS) have started a review on the use of unmanned aircraft such as drones. The review will address safety and security concerns, while facilitating the increasing use of such aircraft. The authorities will also assess the feasibility of differentiated levels of oversight for different users, the need to register unmanned aircraft systems, and where such systems can or cannot operate. The authorities received 70 applications for permits for such unmanned aircraft in Jan 2015 – a six-fold increase from Jan 2014.

Friday, 13 February 2015

CIMB Niaga Bank Net profit fell 45.3% yoy in 2014.
CIMB Niaga Bank (BNGA) reported a weak net profit of Rp2.3t in 2014, down 45.3% yoy, below market expectation of Rp3.5t. The weak earnings were due to: a) non-interest income falling 17.5% yoy to Rp2.8t (2013: Rp3.4t), and b) provision soaring 188.1% yoy to Rp3.4t (2013: Rp1.2t). The significant increase in provision was due to higher impairment in loans to the mining and plantation sector s, which raised NPL of corporate loans to 7.3% as at Dec 14 and gross NPL of total loans to 3.9%. Total loans grew only 12.4% yoy, above the industry’s 9.2% yoy.

Banking: 8 banks will issue medium-term notes in 2015.
According to the regulator, eight banks have submitted their proposals to issue medium-term notes in 2015. This is in response to the tightening policy and competition for deposits. The proceeds will be used to fund their loan growth. BBTN intends to issue Rp11.9t, CIMB Rp6.9t and OCBP Rp5.4t.

Property: Housing backlog to reach 15m units this year.
Real Estate Indonesia (REI) expects total housing backlog may reach 15m units this year and may increase by 500,000 units per year if the government does not allocate more budget for low-end housing developments. According to REI, the government can adopt several strategies to reduce the huge housing backlog, namely: a) top up mortgage subsidy for low-income segments, b) improve development licensing processes, c) prepare landbank for low-end housing, and d) develop infrastructure to support housing projects. REI also suggests the government combat high inflationary rate to improve affordability. This year, REI expects 200,000 houses to be built, of which about 70% is for the low-end segment.

Under-used car parks at sports facilities may be redeveloped.
Car parks at sports facilities in Singapore that are under-utilised will be reviewed for possible redevelopment to build more amenities for public use. It was noted that as many sports facilities are centrally located in relation to other amenities, there is a risk that car park lots will be taken up by non-sports users.

Lower visitor arrivals in 2014.
Headwinds on several fronts pushed Singapore’s 2014 visitor arrivals down 3.1% to 15.1 million, the first decline since 2009 and off the mark set by the Singapore Tourism Board (STB). The consolation was that STB’s quest for higher yield tourists could be paying off – tourism receipts were flat at S$23.5 billion as per capita spending rose. Expectations were for 16.3-16.8 million visitors and tourism receipts of S$23.8-24.6 billion in 2014, both of which failed to materialise as arrivals from markets such as China took a tumble and certain regional currencies depreciated against the Singapore dollar.