Thursday, July 9, 2009

Business & Trade updates from Jakarta

- Indonesia's Bakrieland Raises 150 Bln Rph From Sukuk
- Bank Negara Indonesia To Form Syndicate To Finance Credit For Excelcomindo
- Indonesian Finance Minister Hopes Investment Will Grow 7 Pct
- Kadin Calls On Indonesian Banks To Cut Lending Rates Soon
- Indonesia's Pelindo III To Expand Terminal Of Teluk Lamong Port
- Tourist Arrivals In Jakarta Up 22 Pct In May
- Indonesia's Coffee Exports Expected To Drop 40 Pct In 2009
- Indonesian Govt To Build Palm Oil Industrial Clusters
- Indonesia-UAE Trade Far Less Than Potential: Envoy
(Courtesy Joyo News Service)
Indonesia's Bakrieland Raises 150 Bln Rph From Sukuk
JAKARTA, July 9 (Reuters) - Indonesian property firm PT
Bakrieland Development Tbk raised 150 billion rupiah ($14.7
million), as targeted, from a sukuk issue to finance business
expansion, an underwriter told Reuters.
Bakrieland is part of the diversified Bakrie Group, controlled
by the family of cabinet minister Aburizal Bakrie.
The firm issued a two-year tranche with a coupon rate of 15.48
percent and a three-year tranche at 16 percent, according to
Djoko Purwanto at PT Bahana Securities which, together with PT
Madani Securities, underwrote the offering. ($1 = 10,210 Rupiah)
(Reporting by Sonya Angraini; Editing by Sara Webb)
Bank Negara Indonesia To Form Syndicate To Finance Credit For
JAKARTA, July 9 Asia Pulse - PT Bank Negara Indonesia is seeking
to lead a bank syndicate to finance a Rp1.5 trillion (US$105
million) credit requested by cellular phone operator PT
Excelcomindo Pratama (JSX:EXCL).
The management of the publicly traded state lender is seeking
other banks interested in joining the syndicate, a bank official
BNI has invited the association of regional banks and PT Bank
Rakyat Indonesia (BRI), Rosa Delima Muiari, its chief of
corporate banking division, said.
BNI already pledged loans for other telecommunications companies
including Rp1.7 trillion for PT Telkom and Rp750 billion for PT
Telkomsel in a syndicate with Bank Mandiri and Bank central Asia.
Indonesian Finance Minister Hopes Investment Will Grow 7 Pct
JAKARTA, July 9 Asia Pulse - Indonesian Finance Minister Sri
Mulyani Indrawati hopes investment will grow seven per cent to
support the economy so that it could grow four per cent this
"If growth is still quite strong we hope investment in the
second quarter and in the second semester could grow higher than
in the first quarter which was recorded at 3.5 per cent," she
said here on Wednesday.
"We hope it could grow close to seven per cent so that our
economic growth could be close to or maintained above four per
cent," she said.
She said investment growth was expected to come from foreign
direct investment, bank credits, expenditures of state-owned and
private companies and also from the capital market.
Data from the finance ministry show investment is predicted to
grow 5.6 per cent and the economy 4.1 per cent in the first
semester this year.
Meanwhile economy is predicted to grow 4.6 per cent in the
second semester, supported by investment which is expected to
grow 9.2 per cent.
In 2009 the country`s economy is expected to grow 4.3 per cent,
supported by an investment growth of 7.4 per cent.
Foreign direct investment in the first semester this year
meanwhile is predicted to reach US$4.549 billion or up from the
same period last year reaching US$3.5 billion.
For the second semester it is predicted to reach US$1.704
billion, down from US$4.419 billion recorded in the same period
last year.
Foreign portfolio investment in the first semester this year is
predicted to be minus US$1.178 billion, down from minus US$288
million in the same period last year.
Foreign portfolio investment in the second semester of 2009 is
predicted to reach US$420 million, up from minus US$1.309
billion in the same period last year.
Kadin Calls On Indonesian Banks To Cut Lending Rates Soon
JAKARTA, July 8 Asia Pulse - The Indonesian Chamber of Commerce
and Industry (Kadin) has called on banks to immediately lower
their interest rates on credits in accordance with Bank
Indonesia's (BI/the central bank) recent action in cutting its
key rate by 25 basis points to 6.75 per cent.
"I appeal to banks to cut their lending rates soon so that
investors will be able to borrow money at relatively lower
interest rates," chairman of Kadin`s foreign investment
committee Chris Kanter said here on Tuesday.
He said the lending rates at present were still at the 13 per
cent level while a fair rate would be in the range of 10 to 11
per cent.
Kanter said the high bank lending rates at present posed
difficulties to investors intending to borrow large sums of
"The central bank should urge banks to lower their lending rates
which are still high," he said.
The chairman of Kadin`s Permanent Committee for Internal Trade
Affairs, Bambang Soesatyo, had earlier said BI`s key rate cut by
25 basis points to 6.75 per cent would receive little response
from banks.
"I think banks will only give a small response to the BI Rate
cut. Their response will be linked to political developments in
the runup to the July 8, 2009 presidential election," he said.
Banks now even had no courage to extend credits or be inclined
to delay opening credit lines to businesses needing working
capital or investment funds.
"It is not impossible that banks will raise their lending rates
due to the increased weight of risks," he said.
But Bambang was convinced that banks` lending rates would
eventually follow the BI rate cut after the political situation
had become stable.
He said he was confused because the BI Rate no longer seemed to
function as a reference to the financial world in the country.
In January 2009, the BI Rate was cut to 8.75 per cent and then
to 8.25 per cent in February. Again in March it was lowered to
7.75 per cent, in April 7,50 per cent, May 7.25 per cent and
June 7 per cent. And it was cut again in July to 6.75 per cent.
"But banks` lending rates have stubbornly remained at the 13 per
cent level," he said.
Indonesia's Pelindo III To Expand Terminal Of Teluk Lamong Port
JAKARTA, July 9 Asia Pulse - Indonesian state owned seaport
operator PT Pelabuhan Indonesia III (Pelindo III) will build the
expansion of the terminal of Teluk Laming port in East Java.
Pelindo III will put up Rp1.6 trillion (US$160 million) of the
total cost of Rp2.5 trillion to build the project expected to be
completed in 2011, company spokesman Iwan Sabatini said.
The management is set to handle the project alone without
involving strategic investors, Iwan said, adding the project
will be built by phases.
Teluk Lamongan port is serving as an expansion of Surabaya's
Teluk Bayur port, the country's second largest port in East
Java, he said.
Tourist Arrivals In Jakarta Up 22 Pct In May
JAKARTA, July 8 Asia Pulse - A total of 124,928 foreign tourists
visited Jakarta in May 2009, up 22.32 per cent from a month
earlier, an official said.
The rise in the number of tourist arrivals was among others the
result of intensive tourism campaigns and media reports on the
conducive security situation in the capital city, the head of
the distribution statistics at the Jakarta office of the Central
Statistics Board (BPS), Dody Rudiyanto said here on Tuesday.
"The promotion campaigns and positive information were able to
shore up foreign tourists` confidence in visiting Jakarta," he
Hopefully, the positive trend of tourist arrivals would continue
in the months ahead, he said.
Over the past four years, the capital three times saw a
significant increase in the number of tourist arrivals including
that in May 2009, he said.
Compared to the same period last year, however, the number of
tourist arrivals in May 2009 fell 2.99 per cent due to the
sluggish global economic growth in the first quarter, he said.
Malaysia topped the list of tourist arrivals in Jakarta in May
2009 with 24,940 tourists, followed by Singapore (10,950), China
(10,004), the United States (5,047), and Japan (5,031).
The tourist arrivals from the five countries accounted for 44.80
per cent of the total tourist arrivals in May 2009.
"This means that tourist arrivals from the five countries are
important for the tourism market in Jakarta," he said.
Overall, 445,394 foreign tourists visited Indonesia in May 2009,
a 8.03 per cent increase from a month earlier.
Indonesia's Coffee Exports Expected To Drop 40 Pct In 2009
JAKARTA, July 8 Asia Pulse - Indonesia`s coffee exports are
expected to drop 40 per cent from US$900 million in 2008 to
US$630 million in 2009, executive secretary of the Indonesian
Coffee Exporters Association (AEKI) Rachim Kartabrata said.
"The drop in the value of Indonesia`s coffee exports will be due
to the global financial crisis that has taken place since
October 2008," he said here on Tuesday.
He said that the coffee price had dropped since October 1, 2008,
when Indonesian Robusta coffee price declined from US$2.2 per kg
to US$1.1 per kg while that of Arabika type from US$2.8 per kg
to US$2.3 per kg.
The export volume also decreased 20 per cent from 420,000 tons
in 2008 to 350,000 tons this year, of which 80 per cent were
Robusta coffee and 20 per cent were Arabica.
He said that Indonesia Robusta coffee was exported mostly to
West Europe, Japan, East Europe and the United States, while
most of the Arabica coffee was exported to the United States and
Kartabrata said that globally coffee drinkers took 70 per cent
Arabica coffee while only 30 per cent of Robusta one.
He said that Arabica coffee has excellent aroma and taste while
Robusta coffee was taken only as market complement only.
Rahim Kartabrata said last month that cooperation between
Indonesia and Vietnam in managing the Robusta coffee trade was a
way to change the present situation where the commodity`s market
price was in reality determined at will by a handful of fund
managers at the London commodity exchange.
He said trading in Robusta coffee which is considered to be a
second-grade type of coffee was often affected by the market
price of Arabica coffee the supply of which was mostly
controlled by Latin and Central American countries through the
New York bourse.
A crisis at the the New York bourse would immediately affect the
Robusta coffee price at the London bourse.
"If Indonesia and Vietnam can handle the market through joint
actions, a positive sentiment will no doubt prevail in the
market, and this will boost the Robusta coffee price at the
farmer`s level," Rahim said.
Indonesian Govt To Build Palm Oil Industrial Clusters
JAKARTA, July 9 Asia Pulse - The Indonesian government will
build integrated clusters of palm oil industry in Seimangkel,
North Sumatra and in Melangke in North Sulawesi.
The cluster projects will include oil palm plantations and palm
oil-based industries, Plantation Director General Achmad Mangga
Barani said.
The clusters are expected to be operational in the next two
years, Mangga Barani said, adding work is already in progress
starting with land clearing .
He said currently the world largest producer of crude palm oil
(CPO) has 7.1 million hectares of oil palm plantations.
In the first phase, the government plans to build bio-diesel
plants with a total capacity of 400,000 tons a year to be
followed with construction of CPO-based industries, he said.
This year, the country hopes to turn out 21 million tons of CPOl
and 60% of which are to be processed locally to produce palm oil
derivatives like cooking oil and margarine as well as
bio-diesel, he said.
So far the country have exported most of CPO production.
Indonesia-UAE Trade Far Less Than Potential: Envoy
JAKARTA, July 9 Asia pulse - Trade relations between the United
Arab Emirates (UAE) and Indonesia in 2008 increased 44 per cent
to US$2.18 billion but this was still not a true picture of the
potential of the relationship, said Indonesian Ambassador to the
United Arab Emirates (UAE) M. Wahid Supriyadi.
Indonesia, with a population of more than 230 million, and as
the biggest economic power in South East Asia with a high
consumer confidence, Indonesia was actually a good trade partner
for the UAE, the ambassador said.
The Indonesian embassy in Abu Dhabi said Wednesday that
Indonesia`s economic growth in the first quarter reached 4.4 per
cent, the third highest in Asia after China at 6.1 per cent and
India at 5.7 per cent.
Supriyadi said this was caused by the high domestic consumption
and a lack of dependence on exports, which accounted for only
one third of GDP. He quoted a Nielsen survey on consumer
confidence index in Indonesia which is the highest in the world
at 104 points followed by Denmark (102) and India (99).
Unlike neighbors Thailand and Singapore, Indonesia is relatively
unknown to the people of the UAP.
This fact is apparent from the small number of UAE tourists to
Indonesia, compared to those visiting Thailand (80,000),
Singapore (51,168), and Malaysia (34,994).
Tourist visits numbering in the thousands was also caused by the
relatively small budget for Indonesia`s tourist promotion,
Supriyadi said.
But the envoy believed that Indonesia had more diversified
potentials and many leading travel magazines had even called
Bali the most beautiful island in the world.
UAE investment in Indonesia was relatively small at only US$22
Eight UAE companies have committed to investing more than US$7
billion in the tourism sector in Lombok (Emaar), the
construction of Asia`s biggest shipbuilding yard (Dubai Drydock
World and Fabtech International), the development of an
epicentral business zone in Kuningan (Limitless), and in the
coal sector (RAK Mineral and Metal Investment, RMMI).

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