Indonesia Market Summaries 26 April 2013

Semen Indonesia gave loan to Thang Long

Quoted in the local news that SMGR is providing loan facilities to their subsidiary in Vietnam, Thang Long Cement, an amount of US$41mn or equivalent to Rp398bn. The loan will bear an interest rate of LIBOR+4.5% per year with a tenor of 12 months. The loan will be used for working capital and others based on the two companies’ agreement. (Bisnis Indonesia)

Bumi Serpong Damai is planning for a placement

BSDE is seeking approval from their shareholders for a private placement. The company is said to let go 10% to a strategic investor where, if approved, have a time limit of two years to find one. BSDE has yet to disclose who the investor would be or what the proceeds of the placement would be used for. However, they said that the company is just opening up an opportunity for a strategic investor who has interest in BSDE. (Kontan)

JPFA will spend up to Rp800bn to buy back shares

Japfa Comfeed Indonesia (JPFA IJ) plan to conduct buy back share with total budget of Rp800bn within 18 months period. Company will appoint Bahana Securities as the main broker for this corporate action. Company will seek approval from EGM on June 12, 2013. This is part of company’s commitment to optimize the excess free cashflow to increase the shareholder’s equity value by improving the ROE and EPS. (Bisnis Indonesia)

Dual subsidized fuel price impact to bank performance

A dual subsidized fuel price, a scenario currently echoed by the government to implement, will slow credit growth and third party fund while increase non-performing loan (NPL), Bank Indonesia research noted. In such case, initial credit growth of 22.5-24.3% is expected to slip to 21.7-23.6%, third party fund from 17.5-18.5% to 17-17.9%, and NPL to 1.6-2.1% mainly coming from construction sector (Kontan)

Bird Flu Warning

Indonesia Market Summaries from the government, Indonesia has issued a travel warning and tightened security of Chinese visitor entrants. There seems to be a new plague of Bird Flu that is plaguing the Chinese mainland. This new form of bird flu is classified as H7N9 type and is stated to be deadly and prone to human transmission. As of yesterday, the disease has infected 108 people, of which 22 died. Although there hasn’t been any flags on the disease being spread to Indonesia, Soekarno-Hatta has tightened security for preventive measures.

Indonesia Market Summaries 18 April 2013

Deflation is very likely in April 2013

Sasmito Wibowo, the Deputy of Distribution and Service Statistics within the statistics agency, said that deflation is very likely in Apr13 as horticulture goods prices are declining. These include onion, garlic, red chili, rice, and jewellery. Meanwhile, meat price is still increasing on limited supply; its weight in the CPI is small, though (Investor Daily)

PGAS prepares USD1bn to acquire 3 gas fields

PGN is in preparation for a huge expansion, allocating USD1bn to acquire 3 gas fields, where the location and exact value is still undisclosed. The company claimed that they have enough fund to acquire the fields. As of FY12, PGAS still has a cash balance of USD1.57bn, and the company also got an offer for an USD2bn external financing. The company is also open for bond issuance to finance the acquisition. Aside from the acquisition, PGAS is also further developing their existing gas pipe network in three phases:

1. Short term: Central Java (150km), Lampung (80km), and Riau (500km)
2. Medium term: Banyuwangi-Bali (200-300km completed by 2016)
3. Long term: New gas pipes in Sulawesi and Kalimantan.

(Kontan)

Japfa undergoing major CAPEX to meet growing domestic demand.

PT Japfa Comfeed Indonesia has set aside CAPEX, amounting to IDR 3.9 Trillion to be dispersed throughout 2013 and 2014. They are allocating 60% of the CAPEX budget to develop their DOC (Day-Old-Chicken) business, which is expected to increase production capacity by 34%. Lastly, they are also setting aside 25% of their CAPEX budget to expand their commercial farming and feed mill business. They expect to increase their feed mill production capacity by 19%.  Majority of the CAPEX proceeds are in the form of debt, with portions funded by internal cash. This year, Japfa targets top-line growth at 15%.   (Investor Daily)

There are three news from Indonesia's local newspaper that Indonesia Market Summaries noted for April 18 2013.

Indonesia Market Summaries April 17 2013

SSIA announced dividend growth of 170%

Surya Semesta announced that they will pay Rp141.2bn or Rp30/sh as dividend which implies 170% growth yoy. The dividend growth is in-line with the company’s net profit growth of 175% in FY12. (Bisnis Indonesia)

AISA increase CAPEX to IDR 808.9 Billion

PT Tiga Pilar Sejahtera Food (AISA) in Indonesia Market Summaries,  has set aside IDR 808.9 Billion for capital expenditure. The CAPEX will be allocated to develop two rice mills, which would double grain production to 240,000 ton a year. The remainder of the CAPEX budget will be used for their plantation division, notably palm oil. They are planning to garner additional land, amounting to 770 hectares. Lastly, the smallest portion of their CAPEX would be allocated into their food division. Specifically, the Company is planning on adding more production lines within their factories. Another note, the Company is also planning to increase the price of their products by about 5% this year. (Kontan)

JAPFA developing feedlot and breeding center in China

PT Japfa Comfeed Indonesia is currently developing a breeding center and feedlot for livestock in China. The output target would be to breed, and essentially ‘fatten’, 90,000 cows per year or 30,000 cows per cycle (each cycle being four months). (Kontan)