Month: February 2022

Posted on

Indonesia is on a Major Defense Spending Spree

            Indonesia made major purchase announcements of fighter jets from the United States and French manufacturers this week in the biggest military buying spree in recent years, raising concerns over government spending as the nation rations funds to recover from COVID-19. The procurement plans spotlight a growing arms race in the Indo-Pacific region, following the surprise announcement last year of a security partnership between the US, Australia, and the United Kingdom.

            The Defense Security Cooperation Agency (DSCA), an agency under the US Department of Defense, announced the possible sale of F-15ID aircraft and related equipment to Indonesia in a deal valued at up to US$13.9 billion on Thursday, just hours after Indonesia and France signed a purchase agreement for the first six of 42 Rafale fighter jets as part of a contract worth of $8.1 billion. Boeing is the principal contractor for the F-15 jets, the Pentagon’s cooperation agency said in a statement. The package would include 36 jets, spare engines, radar, night vision goggles training, and technical support. The DSCA notified the US Congress of the possible sale on Thursday.

            Military analyst Connie Rahakundini Bakrie said that while the purchase of the Rafales from France has been finalized, Prabowo still needs to explain to the public about the high cost of procuring advanced military equipment at this time. She said the ministry owed it to the people to explain how the government would be paying for up to 78 new fighter jets from France and the US. “Prabowo must explain why he chose these jet planes, what the interoperability will be like, as well as what maintenance, repair, and operational components must be built around them, alongside the logistics system. Shopping is easy, and even though this will be paid for with foreign loans, it is still coming out of taxpayers’ money,” she said.

            While Indonesia’s defense spending has increased significantly in the last few years, the portion of the defense budget to gross domestic product has remained stagnant at 0.7 to 0.8 percent in the last 15 years, argued Andi Widjajanto, senior analyst in political security at Laboratorium Indonesia 2045. As such, he said Indonesia was aiming to maintain its current force and modernize the obsolete weapons systems, but Indonesia will not have any significant breakthrough in its posture.

Feb 12, 2022, The Jakarta Post

(https://www.thejakartapost.com/world/2022/02/11/indonesia-on-major-defense-spending-spree.html)

Posted on

DX Composite (IHSG) 3 Times Prints the Highest Record!

            IDX Composite  (IHSG) has successfully recorded a strengthening this week, even setting an all-time high 3 times. The large inflow of foreign capital into the country became one of the factors that boosted the IDX Composite performance, as well as domestic economic data. According to data from Refinitiv, the JCI rose 1.25% this week to 6,815.607. The stock of the pride of the country for the first time set an all-time high of 6,806.730 on Monday (7/2), then rose again the day after at 6,860,750. Then it rose again last Thursday at 6,874.351 before finally being corrected.

            Throughout this week, foreign investors recorded a net buy of Rp7.05 trillion in the regular market, and when added to the cash and negotiable market, the total amounted to more than Rp7.6 trillion. The transaction value was recorded at more than Rp68 trillion. IDX composite is even still able to strengthen even though the United States central bank (The Fed) is expected to raise interest rates by 50 basis points next month after the release of inflation data which shot up to 7.5% year-on-year (YoY).

            Domestically, Bank Indonesia (BI) indicated that it would not raise interest rates this year, which had a positive impact on the JCI. “Bank Indonesia will continue to maintain the interest rate at 3.5% until there are signs of a fundamental increase in inflation, our prediction will occur in 2023, and for that, we will review the stand of monetary policy, especially interest rates in the third quarter of 2015. this,” said Perry. Perry added that the policies taken by BI will depend on inflation data, economic growth, and various macro, monetary and other financial system indicators.

            In addition, BI also reported an increasingly optimistic level of consumer confidence earlier this year. The Consumer Confidence Index (IKK) survey released by BI showed 119.6 in January, higher than the previous month’s 118.3. IKK uses the number 100 as the total measure. Below it is pessimistic, above it is optimistic. When consumers are more optimistic, spending will increase and ultimately spur economic growth.

Feb 12, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220211211626-17-314866/ri-ketiban-duit-rp-76-t-ihsg-3-kali-cetak-rekor-tertinggi)

Posted on

BBRI’s Market Cap Could Reach Rp1,000 Trillion in the Next Several Years

            The slick performance of PT Bank Rakyat Indonesia Tbk (BBRI) during the pandemic seems to have made the Ministry of State-Owned Enterprises (BUMN) optimistic that Indonesia’s largest bank, in terms of assets, will reach a market capitalization of Rp1,000 trillion in the next few years. Deputy Minister of State-Owned Enterprises, Kartika Wirjoatmodjo in the BRI Microfinance Outlook 2022 Webinar entitled “Boosting Economic Growth Through Ultra Micro Empowerment”, Thursday (10/2/2022) said “Currently this state-owned bank that focuses on the ultra-micro segment still has a market cap in the range of Rp670 trillion. However, it is believed that over time, the economic value of this company will continue to increase. We also believe that from an economic point of view, BRI is a very unique bank. Currently, BRI’s market cap reaches Rp. 670 trillion and we have a target for the next few years. in the future it could approach Rp 1,000 trillion,” said Kartika.

            Kartika’s optimism is not without foundation. During 2021, BRI managed to record a net profit of Rp32.21 trillion as of December 2021 from the previous year of Rp18.35 trillion, or an increase of 75.53%. The increase in the company’s net profit is in line with the increase in interest income to Rp143.52 trillion at the end of 2021 from Rp135.76 trillion in the previous year. Meanwhile, interest expense was recorded at Rp29.43 trillion from the previous year of Rp42.18 trillion. So, on a consolidated basis, the net interest income of the issuer bank codenamed BBRI is Rp114.09 trillion, an increase of 21.91% from the previous Rp93.58 trillion.

            Throughout 2021, the company disbursed loans on a consolidated basis of Rp994.41 trillion, up 5.36% from the same period in the previous year of Rp943.79 trillion. This increase is in line with the increase in the company’s total assets to Rp1,678 trillion as of the end of December 2021 from the previous year’s Rp1,610 trillion. In terms of the ratio of non-performing loans or gross non-performing loans (NPL), the company recorded an increase from the position of December 31, 2021, at the level of 2.98 percent to 3.08%. Meanwhile, net NPL slightly improved from 0.80% to 0.70%. Meanwhile, BBRI’s net interest margin (NIM) grew 6.89% in December 2021 from 6% in the previous year with a loan to deposit ratio (LDR) at the level of 83.67% in December 2021, not much different from the previous year at the level of 83.66%.

Feb 11, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220211082239-17-314582/sobat-cuan-kode-keras-nih-market-cap-bbri-bisa-rp-1000-t)

Posted on

Erick Thohir Says Telkom the Biggest Digital-Telco in ASEAN

            I Minister of State-Owned Enterprises (BUMN) Erick Thohir is optimistic that in the next three years, PT Telkom Indonesia Tbk (TLKM) can become the largest digital telecommunications company in Southeast Asia. Based on the development of tower construction carried out by the company’s subsidiary, PT PT Dayamitra Telekomunikasi Tbk (MTEL) or Mitratel in the last three years.

            “I am optimistic with the planning and implementation of this tower infrastructure development, in the last three years. Telkom can become the largest digital telco company in Southeast Asia,” Erick said in a short video received by CNBC Indonesia, Friday (11/2/2022). Telkom’s task, continued Erick, through the construction of this telecommunication tower is to capture new values that support the company’s income. “New value capture,” said Erick.

            Mitratel development, said Erick, is in line with the agenda of building a 5G ecosystem. This project has started with the 5G Mining Project in collaboration between Freeport and Telkom. “In addition, we have also carried out other initiative programs to support digitalization, including in the financial sector (using artificial intelligence), health (via telemedicine), logistics (integrated logistics system), and transportation (ecosystem for autonomous vehicles),” said Erick.

            Telkom President Director Ririek Adriansyah said “Telkom is currently continuing to accelerate the transformation and structuring of its portfolio for optimal value creation for TelkomGroup, stakeholders and the nation and state. Focus on increasing tower business, data center, infrastructure managed services, cloud computing, big retail data, and services will strengthen Telkom’s position as a business partner providing digital connectivity, digital platforms, and digital services for both domestic and regional”.

Feb 11, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220211145306-17-314759/wow-erick-sebut-telkom-jadi-digital-telco-terbesar-di-asean)

Posted on

This is the Official Name of the MotoGP Race in Indonesia

            The MotoGP race held at the Mandalika Circuit now has an official name. In collaboration with Pertamina as a sponsor, the king of the motor racing event is entitled Pertamina Grand Prix of Indonesia. The inauguration of the official name of Pertamina Grand Prix of Indonesia occurred after Pertamina signed a partnership with Dorna. The signing was carried out directly by the President Director of Pertamina, Nicke Widyawati, and the Managing Director of Dorna Sports, S.L, Carlos Ezpeleta (online). The Minister of Stated-Owned Enterprises, Erick Thohir, also witnessed the signing in Jakarta, Wednesday (9/2/2022).

            Pertamina has also become the main sponsor of the Mandalika Circuit. The agreement between the two parties made the name of the Mandalika Circuit officially changed to Pertamina Mandalika International Street Circuit. Pertamina Grand Prix of Indonesia” is expected to help the national economic recovery, increase tourism potential, and advance the motorsports ecosystem in Indonesia. “Hopefully the presence of this SOE synergy will provide a multiplier effect and become part of the national economic recovery, as well as an opportunity for broad global market penetration for Pertamina, BUMN, and SME products located in Mandalika and other areas,” said Nicke Widyawati.

Dorna Welcomes Pertamina

Carlos Ezpeleta positively welcomed the inclusion of Pertamina as the main supporter of the Grand Prix of Indonesia. Previously, Pertamina had been wara-wiri in the Grand Prix racing event by supporting the SAG Pertamina Mandalika team that competed in the Moto2 World Championship.”Dorna Sport is proud to announce a cooperation agreement for the Pertamina Grand Prix of Indonesia. And will ensure that Pertamina, Indonesia, and Lombok Island are at the forefront and become the center of attention on the international stage,” said Carlos.

Posted on

Hartono Family Receives Rp8.6 Trillion From BCA

            Throughout 2021, the big bank made an impressive financial performance. One of them is PT Bank Central Asia Tbk (BBCA). Based on the company’s financial statements, BBCA’s net profit reached Rp31.42 trillion or grew 15.8% year on year (YoY) compared to the previous year. For the record, this is the highest net profit ever recorded by BBCA in history. BBCA’s solid performance was supported by an increase in net interest income which rose by 3.5% YoY and a decrease in provision or provision expenses by 19.6% YoY. With such a smooth performance, shareholders will certainly benefit greatly, especially considering that the dividend distribution period is near.

Like one of the blue-chip stocks, BBCA consistently experiences profit growth every year. To note, in the 2015-2020 period, BBCA’s net profit increased by Rp18.02 trillion to Rp27.13 trillion. At the same time, BBCA’s Dividend Payout Ratio (DPR) continues to increase from only 21% in 2015 to 50% in 2020. With the growth in profits and the increase in the DPR, dividends received by shareholders BBCA is compounding up 29% per year. As is well known, the controlling shareholder of this big bank is the richest person in Indonesia, namely the Hartono brothers who own the Djarum Group.

The Hartono brothers’ income from the BBCA dividend in 2020 is even more fantastic. With a 50% DPR, the funds obtained by the brothers who own the Djarum Group reach almost Rp7.5 trillion. If the DPR assumes that the BBCA’s 2021 performance is the same as that of 2020 at around 50%, then the total cash dividends awarded will reach Rp15.71 trillion and Robert and Michael Hartono have the potential to pocket funds from dividends before tax of Rp8.6 trillion. This figure is also obtained only from BBCA dividends not to mention from other business lines such as cigarettes and other Djarum Group companies.

Feb 09, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220209000339-17-313889/gokil-keluarga-hartono-bisa-raup-rp-86-t-dari-bca)

Posted on

Having Super Rare Treasures, Indonesia Becomes China’s Main Competitor

            Indonesia also keeps a super rare ‘treasure’ called Rare Earth Metals (LTJ) or Rare Earth Elements (REE). Based on data from the Ministry of Energy and Mineral Resources (ESDM) as of 2015, the total potential of rare earth metals in Indonesia is estimated at 1.5 billion tons. The potential of these rare earth metals is spread in several areas, especially in the Bangka Belitung Islands, West Kalimantan, Central Kalimantan, Sulawesi, to Papua.

            Citing “Study on Potential Associated Minerals in Tin Mining” released by the Energy and Mineral Resources Ministry of Energy and Mineral Resources Data and Information Center 2017, of the 17 rare earth elements, six elements are indispensable for the development of electric vehicles, namely lanthanum (La ), cerium (Ce), neodymium (Nd) for batteries, praseodymium (Pr), neodymium (Nd), terbium (Tb), and dysprosium (Dy) for generators and electric motors. It is known that obtaining the LTJ can be done in two approaches, namely obtaining from upstream tin mining with a higher grade and lower cost, and from processing tin slag with a relatively lower grade compared to the first one and the cost is relatively higher. In fact, if Indonesia works on and exploits this LTJ seriously, it is predicted that Indonesia will become China’s main competitor in meeting the world’s LTJ demand.

            China is the largest LTJ producer in the world today. This is because China has LTJ deposits in the primary form in the form of by-products from iron ore mining, and secondary in the form of alluvial deposits and lateritic deposits. “Recovery of LTJ will be much greater if it is carried out from upstream of tin mining, capable of reaching 74% by 2045, and Indonesia is predicted to become China’s main competitor in meeting world demand,” reads the executive summary of “The Study of Potential Associated Minerals in Tin Mining” which released by the Ministry of Energy and Mineral Resources in 2017.

            From slag processing, the six highest levels that can be recovered are cerium (16,400 parts per million, ppm), yttrium (13,900 ppm), lanthanum (7,470 ppm), neodymium (6,470 ppm), dysprosium (2,210 ppm), and praseodymium (1,810 ppm). ppm). If the smelter capacity for slag processing is increased to 3,000 tons per year, it will be able to meet world demand up to 1.13% in 2045 amounting to 360 thousand tons. The capacity of 10,000 tons per year can meet world demand around 4.23% in 2056 amounting to 437 thousand tons. 

It should be noted that until now the Government of Indonesia has not issued a special regulation regarding the management of rare earth metals. However, the Director-General of Mineral and Coal (Dirjen Minerba) of the Ministry of Energy and Mineral Resources, Ridwan Djamaluddin, said that currently, the government has formed a team called the rare earth metal-based industry development team. In addition, the government is also preparing a Presidential Instruction (Inpres) to accelerate the development and downstream of rare earth metals.

Feb 08, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20220208112507-4-313699/punya-harta-karun-super-langka-ri-jadi-pesaing-utama-china)

Posted on

International Flights Return to Bali

            Indonesian, Singaporean and Australian airlines have set plans to resume international direct flights to Bali after the government further reopened the island’s borders, addressing a key challenge in efforts to boost economic recovery in the tourist-dependent province. Flagship carrier Garuda Indonesia initiated the opening by resuming its weekly flights from Narita International Airport in Japan to I Gusti Ngurah Rai International Airport in Bali on Feb, 3.

I Gusti Ngurah Rai Airport spokesperson Taufan Yudhistira said the Garuda flight was the first international regular flight to land on the island after nearly two years since Indonesia’s border closed due to the COVID-19 pandemic. “There are some other regular flights that have plans to land in Bali, including Garuda from Haneda Airport in Japan,” he said. He went on to say that Garuda would fly from Japan to Bali every Thursday.

The government has allowed Bali to receive international direct flights from 19 countries since October last year but demand has been lackluster, with Tourism and Creative Economy Minister Sandiaga Uno saying that not a single such flight had been scheduled to the island province until January this year. The absence of international flights was a major roadblock in Bali’s tourism recovery plans as foreign tourists generally spend more than domestic tourists and contribute more toward hotel occupancy rates. International travelers who wanted to go to Bali had to take the costly option of flying and quarantining in either Jakarta or Manado before taking a domestic flight to Bali.

Latest Statistics Indonesia (BPS) data show that Bali’s gross regional product contracted 2.91 percent annually in the third quarter of last year as foreign tourist arrivals plummeted from 36 individuals to zero over the same period. As such, the government announced that it would shorten the mandatory quarantine period to five days from seven starting Feb. 4 for travelers with two doses of COVID-19 vaccine. The government also reopened Bali to international travelers from all countries.

Singapore Airlines has announced that it would start regular direct flights to Bali starting Feb. 16. Meanwhile, Sandiaga said that Emirates and Qatar Airways were among the next batch of airlines that would fly passengers to Bali. Australian low-cost carrier Jetstar has scheduled to commence flights from Sydney and Melbourne to Bali from March 1, while Qantas Airways also plans to open the same route beginning March 28.

Feb 07, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/02/06/international-flights-return-to-bali.html)

Posted on

Indonesian Economy (GDP) Grows 3.69% in 2021

            The Indonesian economy succeeded in the fourth quarter of 2021 being able to grow above 5%. This makes the Gross Domestic Product (GDP) of the country throughout 2021 grow positively in 2021, after the previous year it grew negative (contracted). On Monday (7/2/2022), the Central Statistics Agency (BPS) announced Indonesia’s economic growth data for the fourth quarter of 2021. Throughout October-December 2021, Indonesia’s GDP grew 1.06% compared to the previous quarter (quarter-to-quarter/qtq). Compared to the fourth quarter of 2020 (year-on-year/yoy), the Indonesian economy grew by 5.02%. This brings economic growth throughout 2021 to 3.69%.

            For the record, the market consensus compiled by CNBC Indonesia estimates that the Gross Domestic Product (GDP) of the country in October-December 2021 will grow by 0.98% qtq. Meanwhile, YoY economic growth is estimated at 5.06%. Thus, economic growth throughout 2021 is estimated at 3.65%. Much better than 2020, which was minus 2.07%.

Feb 07, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20220207100733-4-313345/ekonomi-indonesia–pdb–tumbuh-369-di-2021)

Posted on

ARTO flies 5,900%, Jerry Ng is included in the list of the richest Indonesian citizens

            The soaring share price of digital bank PT Bank Jago Tbk (ARTO) has made veteran entrepreneur and banker Jerry Ng among the 50 richest people in Indonesia according to Forbes in 2021. According to Forbes, Jerry Ng is ranked as the 12th richest person in the country in 2021 with a net worth of US$3.2 billion or equivalent to Rp45.92 trillion (assuming an exchange rate of Rp14,350/US$).

            According to Forbes’ explanation, the 56-year-old man’s coffers of wealth came from ownership of shares in Bank Jago. Jerry Ng and his colleagues officially acquired Bank Jago (formerly Bank Artos Indonesia) from the Arto Hardy family on December 26, 2019. This acquisition was carried out by Jerry through PT Metamorfosis Ekosistem Indonesia (MEI). Apart from Jerry, his colleague, Patrick Walujo, also entered ARTO through Wealth Track Technology Ltd (WTT), an investment company based in Hong Kong.

            The ride-hailing giant, Gojek, through PT Dompet Karya Anak Bangsa, has also become part of ARTO’s shareholder with 21.404% ownership since December 2020. Since it was officially controlled by Jerry Ng et al, ARTO’s share price has skyrocketed 5,955.66% to Rp16,775/unit as of Friday (4/2/2022). With this fantastic price spike, ARTO shares are now in the top 5 stocks with the largest market cap, reaching Rp232.09 trillion. Practically, ARTO’s shares are currently one level above the conglomerate Astra group PT Astra International Tbk (ASII) with a market cap of Rp221.65 trillion.

Feb 04, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220204104358-17-312849/arto-terbang-5900-jerry-ng-masuk-daftar-wni-paling-tajir)