Indonesia Market Summaries 4 June 2013

DBS agrees to extend purchase deadline to 1 August 2013

DBS Group Holdings agrees to extend the deadline with Temasek for the purchase of 40% stake in Bank Danamon by 1 August 2013, two-months extension. This is the second time the acquisition deal deadline is extended. Comment: By regulation, DBS can only take up to 40% stake in Danamon and will have to wait for at least one and a half years before asking from the central bank to acquire more stake, providing they pass the GCG and financial condition/health status. We believe the group needs to wait for the MAS decision on reciprocal agreement between Singapore and Indonesia to open the banking industry to foreign banks, which will enable Indonesian state banks to open branches in the city-state country. Meanwhile the minority investment in Bank Danamon will lower DBS’ CAR under the Basel III accord.

Jababeka (KIJA IJ) partners with Plaza Indonesia (PLIN IJ) on mixed used development

Through its subsidiary, PT Grahabuana Cikarang, KIJA partners with PLIN in developing a mixed used for the mid-to-upper class costing approximately Rp4tn. The two companies will create JV companies PT Jababeka Plaza Indonesia (Ownership: 30% PLIN, 70% KIJA) and PT Plaza Indonesia Jababeka (Ownership: 70% PLIN, 30% KIJA) where the former will develop 4ha for residential and the latter develop 12ha for mall, hotel, and office. Funding will come from internal cash and bank loans. KIJA expects the project to take 6 years to complete since groundbreaking, which is expected to be next year. (Bisnis Indonesia)

Bakrie Toll Road sold for Rp140bn

ELTY managed to sell PT Bakrie Toll Road for Rp140bn to PT Karya Prima Investama on May 27. The proceeds will mostly be used to pay down debt. (Bisnis Indonesia)

Erajaya Swasembada revealed key dates on dividend payment

Erajaya Swasembada (ERAA) sets the cum and ex date for the dividend payment on June 25 and 26, while payment would be made on June 28. At the current price, its Rp60/share dividend payment (40% payout) gives a 1.8% yield.
for Indonesia Market summaries 4 June 2013

Indonesia Market Summaries 16 May 2013

Bakrie Toll Road transaction is nearing completion

ELTY and the MNC Group’s transaction on the Bakrie Toll Road (BTR) sell is nearing completion as the deal was signed a couple of days ago. ELTY admitted that the transfer of syndicated loans and collateral was part of the issue that delayed the transaction; however, the issue has been cleared and the loans and collateral has been transferred to the MNC Group. (Kontan)

The government cut budget

The cut is intended for all government institutions by an average of 9.1% of their 2013 budget. The action is estimated to save Rp24.6tn and will be used to to finance budget deficit that is expected to reach 2.5% of GDP compared with initial projection of 1.65% of GDP (Kontan)

Bank Indonesia to respond subsidized fuel price hike with interest rate measure

Bank Indonesia governor Darmin Nasution expect inflation to bump up to 7.5-7.8% should subsidized fuel prices, premium and diesel, are increased to Rp6,000/liter and, alternatively, to 7.5% if each rise to Rp6,500/liter and Rp5,500/liter. Such condition warrants monetary policy review which may result in change of interest rate, though it is not yet clear which one will be utilized, the FasBI rate or BI rate (Kontan)

for Indonesia Market Summaries 16 May 2013