Category: Economy

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IMF Prediction: The Indonesian economy grew 5.6% in 2022

            The International Monetary Fund (IMF) issued the latest forecast on the Indonesian economy this year and in 2023. The IMF estimates that the Indonesian economy is able to grow 5.6% and 6% respectively. The IMF said the Indonesian economy was supported by the still-high price of global commodities, easing of mobility and sustainable policies, and acceleration of vaccination.

            “Indonesia continues to respond with brave, comprehensive, and well-coordinated policy measures to protect the lives and livelihoods of the impact of the covid pandemic,” the IMF wrote. Even though the risk of uncertainty is still high. Among other things, the presence of the latest Covid-19 variant, Omicron was able to reprimand the mobility and economic recovery. Then there is also a risk of changes in developed countries that become more stringent, so they are able to make the financial market shake.

            Even though there is a positive side, the price of commodities is still at a high level and helps state revenue. Especially next year is the last for the deficit of the State Revenue and Expenditure Budget (APBN) above 3% of GDP. In terms of inflation, the IMF estimates to be maintained at a low level. There is an increase but will take place gradually this year.

Jan 26, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20220126105848-4-310528/ramalan-imf-ekonomi-ri-tumbuh-56-pada-2022)

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Foxconn, other firms look to enter Indonesia’s EV market

            Taiwan-based companies and local firms have inked an US$8 billion (Rp114 trillion) investment deal to develop Indonesia’s electric vehicle ecosystem. Foxconn, a contract manufacturer known for Apple’s iPhone, and Gogoro, an electric scooter, and battery swap technology company, represent the Taiwan side in the deal, while coal giant Indika Energy and state-owned Indonesia Battery Corporation are the Indonesian side.

These companies will develop a wide range of EV segments, from cars, two-wheelers, and buses to battery production and supporting industries, namely energy storage systems, battery exchange or swap stations, battery recycling as well as research and development. “Under President Joko Widodo’s second term, Indonesia is focusing on encouraging sustainable investment in green energy and industry,” Investment Minister Bahlil Lahadalia said in a statement on Friday, adding that the government would take care of all of the required permits. The deal brings Indonesia – which holds almost a quarter of the global nickel reserves – a step closer to becoming a key player in the battery industry. The government has been defending its nickel ore export ban as it seeks to protect its reserves of the metal to attract EV investment, among other purposes.

State-Owned Enterprises (SOEs) Minister Erick Thohir said in a statement that the investment would help Indonesia achieve its net-zero emissions target by 2060, while also creating a multiplier effect for the benefit of local companies and paving the way for EV technology transfer. Foxconn chairman Liu Young-Way said they wanted to contribute to developing the local EV ecosystem and related energy market in Indonesia. “We hope that by sharing our technology and experience, we can help create more opportunities for local companies in the new energy and EV market,” Young-Way said in a statement on Friday.

The deal marked a new era in Indonesia’s commitment to becoming a global leader in sustainability and supporting an open ecosystem providing Indonesia with better and cleaner transportation options.

Jan 26, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/01/25/foxconn-other-firms-look-to-enter-indonesias-ev-market.html)

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Market Capitalization of Allo Bank (BBHI) Enters the Top 10!

            Indonesia Composite Index (ICI) (well-known as IDX Composite) managed to record a positive performance last week and also managed to set a new record high in last weekend’s trading. Shares of PT Allo Bank Tbk (BBHI) managed to enter the top 10. According to data from the Indonesia Stock Exchange (IDX), last week, the ICI rose 0.49% point-to-point. In trading on Friday (21/1/2022) last weekend, the ICI closed up 1.5% to 6,726.37. During the week, the value of IDX Composite transactions tended to fall to Rp57.58 trillion. However, foreign investors still recorded a net buy of Rp1.24 trillion in the regular market. Of the total 10 largest market capitalizations (big-cap), as of Friday last weekend, it rose to Rp3,446 trillion, from the previous Rp3,402 trillion.

            Stocks that experienced a decline in market cap at the end of last week were PT Bank Rakyat Indonesia Tbk (BBRI) shares which fell to Rp626 trillion, PT Astra International Tbk (ASII) shares which also fell to Rp227 trillion, and shares in PT Unilever Indonesia Tbk (UNVR) to Rp158 trillion. Meanwhile, of the stocks that experienced an increase in market cap, PT Telkom Indonesia Tbk (TLKM) shares had the largest increase in market cap last week, which increased by Rp. 14 trillion to Rp429 trillion.

            Digital bank PT Allo Bank Tbk (BBHI) shares last weekend managed to occupy the top 10 big-cap stocks of over Rp100 trillion with a market cap of Rp132 trillion. Market capitalization or market cap is the market value of an issuer, the multiplication of the share price with the number of shares outstanding in the market, the greater the market cap value of the issuer, the greater the influence of the movement on the IDX composite movement.

Jan 24, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220124113005-17-309846/joss-market-cap-allo-bank–bbhi–masuk-jajaran-10-besar)

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Wow! Singtel and Grab Join Emtek Enter Fama Bank

            Eddy Kusnadi Sariaatmadja’s technology issuer, PT Elang Mahkota Teknologi Tbk (EMTK) announced the entry of a strategic partner to accelerate the company’s digital ecosystem at PT Bank Fama International. Previously, Elang Mahkota Teknologi (EMTK) through its subsidiary, PT Elang Media Visitama (EMV) has acquired the mini bank and is now the largest shareholder with a portion of 99.99% in Fama Bank.

            The two strategic investors who entered were Singtel Alpha Investments, a wholly-owned subsidiary of Singtel Telecommunication Limited, and A5-DB Holdings Pte. Ltd. which is a subsidiary of Grab. Elang Mahkota Teknologi (EMTK) Corporate Secretary Titi Maria Rusli said that Grab and Singtel had taken part, each with 2.35 billion new shares of Fama Bank or equivalent to 16.26% of the company’s issued and paid-up capital which had been increased. After the issuance of new shares was completed, EMV’s ownership in Fama Bank became 62.76%. Then, PT Nusantara Berkat Agung with 4.72%, Grab with 16.26%, and finally Singtel with 16.26%. This acquisition is a concrete step from the Singtel-Grab consortium to develop digital financial services in Indonesia.

            For information, at the end of 2020, the Monetary Authority of Singapore (MAS) said it would grant a fully digital bank license to the Grab-Singtel consortium and the technology giant which is Shopee’s parent company, Sea Group. This is the first and is anticipated in the liberalization of the financial industry. Unlike traditional banks, digital bank players will provide services to retail customers such as account opening, deposits, and debit and credit card issuance. However, digital banks will not be physically present and all banking services will be carried out online. This is different from traditional banks, such as DBS, OCBC, and United Overseas Bank which offer several banking services via the internet or mobile applications. Digital banks can also serve corporate customers.

Jan 21, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220121141839-17-309405/wow-singtel-grab-ikut-emtek-masuk-ke-bank-fama)

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Head of Bappenas: The National Capital is named ‘Nusantara’

            Indonesia’s state capital (IKN) will move to East Kalimantan (KalTim). The Minister of National Development Planning (PPN)/Head of Bappenas, Suharso Monoarfa, announced that the center of government is called Nusantara. “Regarding the name of the capital city, I originally wanted to include it at the time of writing the presidential decree but was later detained and I just received confirmation and direct orders from the President on Friday (14/1) and he said the capital city of this country is called Nusantara,” Suharso said.

            Suharso explained the reason behind naming Nusantara as Indonesia’s new state capital in East Kalimantan. “The reason is that Nusantara has been known for a long time and is iconic internationally, it is easy and describes our archipelago, all of us, the Republic of Indonesia, and I think we all agree with the term Nusantara,” he said.

            IKN Nusantara will become a special regional government unit at the provincial level whose territory is the seat of the state capital as stipulated and regulated by law. In the 2022-2024 period, major infrastructure developments such as the Presidential Palace, the DPR/MPR Building, and housing will be carried out. This includes the transfer of civil servants (PNS) of ministries and institutions in the early stages of 500.000. President Joko Widodo plans to celebrate the 79th Independence Day of the Republic of Indonesia in the IKN area on August 17, 2024.

Jan 17, 2022, DetikFinance

(https://finance.detik.com/properti/d-5901387/kepala-bappenas-ibu-kota-negara-namanya-nusantara)

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G20 Economic Benefits Twice as Big as IMF Annual Meetings

            The Coordinating Ministry for Economic Affairs predicts that the economic benefits of the G20 2022 Presidency for Indonesia will be 1.5 to 2 times greater than the IMF World Bank Group Annual Meetings in 2018. Head of the Bureau of Communications, Information Services, and Sessions, Haryo Limanseto, said that a physical meeting in the series of G20 Presidents will boost domestic consumption. In addition, many MSMEs will be involved during the G20 Presidency.

“If the meeting is held physically, there will be an increase in domestic consumption of up to Rp. 1.7 trillion,” said Haryo on the official website of kemenkeu.go.id. In addition, physical meetings will also increase the national Gross Domestic Product (GDP) up to Rp7.4 trillion. Then, Haryo predicts that there will be a workforce absorbtion of 33.000 in various sectors. Another benefit of the G20 Presidency for Indonesia is international branding.

The G20 forum will also encourage investment from G20 members and international organizations in Indonesia. Then, the international event will also broaden the public’s knowledge, especially the younger generation. The G20 presidency will discuss various matters, such as the financial pathway and sherpa pathway.

The sherpa pathway is part of the engagement group represented by civil society organizations, so that the discussion results from the sherpa pathway are not limited to top-down interests, but also open up opportunities for various stakeholders. The sherpa pathway will also focus on empowering MSMEs, such as encouraging the digitization of MSMEs, training in the context of upskilling MSMEs, and encouraging various pro MSME policies. “Thus, the output of this forum could have an impact on the community,” said Haryo.

January 14, 2022, CNN Indonesia

(https://www.cnnindonesia.com/ekonomi/20220114093505-532-746484/manfaat-ekonomi-g20-dua-kali-lebih-besar-dari-imf-annual-meetings)

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Giant Moves Closer, Allo Bank Becomes a Serious Player for Indonesian Digital Bank

            Several leading technology companies in Southeast Asia have announced that they will invest in Indonesian digital bank issuers, marking the entry of Allo Bank Indonesia as the newest major player from the new economy sector into the banking industry in Indonesia. Several large companies such as CT Corp, Salim Group, PT Bukalapak.com Tbk (BUKA), Grab, Traveloka, Carro, and Growtheum Capital Partners to PT Allo Bank Indonesia Tbk (BBHI) will further enlarge Allo Bank’s business ecosystem going forward.

            The seven companies stated that they would absorb a total of 70% of new shares in the corporate action to increase capital with Pre-emptive Rights (HMTED) or PT Allo Bank Indonesia Tbk (BBHI) rights issue worth Rp4.8 trillion. The new shares from the rights issue will be traded on the IDX from January 13 to 19. PT Bukalapak.com Tbk (BUKA) will hold 11.49% stake in Allo Bank, Salim Group will hold 6.00% stake, two Singapore-based companies, Grab and Carro, both through separate affiliates, will each hold 2, 07% and 0.69%, while CT Corp will hold a 1.88% stake.

            The investment into Allo Bank by Bukalapak, Grab and Carro is the latest example of growing interest among technology companies in the ASEAN region in Indonesia’s digital banking sector. Previously, Indonesia’s largest private technology company GoTo has invested in and owns 21.4% shares of digital lender Bank Jago, while Singaporean technology conglomerate Sea Ltd has transformed Bank Kesejahteraan Ekonomi into SeaBank’s digital bank in Indonesia after the acquisition.

            “Online and offline ecosystems are now in the bank, and with the right strategy, leadership, execution, and technology, Allo Bank become a serious challenger in Indonesia’s digital banking landscape,” added the multinational financial services provider from the United States (US), Citi.

Indonesia’s Financial Services Authority (OJK) relaxed foreign ownership rules on banks last year, which is likely to spur more regional technology players to enter the banking business. Mini-banks in Indonesia need to raise funds to meet minimum capital requirements, while technology companies see opportunities to take a stake in an industry they see as the next growth sector.

January 7, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220107082351-17-305372/raksasa-merapat-allo-bank-jadi-pemain-serius-bank-digital-ri)