Update News April 05, 2017
- NexMedia partners with Indosat for new internet/TV bundle
- JCI hits another record high
- Exxonmobil supports Indonesia`s renewable energy projects 2025
- Government agrees to give Freeport provisional business permit
- Freeport Resumes Mineral Concentrate Exports
- Indonesia, Malaysia cooperate to promote MSMEs
- Contractors Sign Jakarta - Bandung Bullet Train Agreement
- Banks Record Profit Increase, Lower Performance
NexMedia partners with Indosat for new internet/TV bundle
The Jakarta Post, 05/04/2017
Pay-TV provider NexMedia has teamed up with telecommunications operator Indosat Ooredoo to announce a new package with a high-speed internet connection in response to rising demand and the increasing digitalization of entertainment.
The NexSat combo was launched by the two companies in an effort to provide home internet customers with an easy bundling of Indosat Ooredoo’s 4G Plus internet network.
The Nexmedia bundle will be offered at a rate of Rp 190,000 (US$14.25) per month, connecting Indosat home users with NexMedia’s premium TV channels. With the bundle, customers will also receive an Indosat Ooredoo Business package of 20GB in the 4G plus network and 6GB in the 3G/4G network.
Indosat Ooredoo’s director and chief of wholesale and enterprise, Herfini Haryono, said Indosat bundle would be especially useful for corporations.
“The synergy between the two companies is also part of Indosat’s master vision of becoming a leading digital provider, by providing on-demand entertainment options to a customer base that is used to the conveniences of high-speed,” Herfini said at the unveiling event on Tuesday.
Herfini also elaborated on the status of Indosat’s data center construction in Surabaya and Batam, saying the Surabaya center would likely be commercially operational by the end of the year, while the Batam center would launch operations at the end of next year, because of the longer investment processes. (bbn)
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JCI hits another record high
The Jakarta Post, 05/04/2017
The Jakarta Composite Index (JCI), the Indonesia Stock Exchange (IDX) main gauge, broke another record Tuesday, closing the day trading at an all-time high of 5,651.82, or higher by 0.8 percent compared to its previous close.
The previous record high of 5,557.98 was made on March 16.
Mining sector drove the jump as it climbed up by 3.58 percent on Tuesday, followed by trade and basic industry, which increased by 1.55 percent and 1.3 percent, respectively, compared to the previous day trading.
Foreign investors bought Rp 616.3 billion (US$46.2 million) worth of stocks more than they sold on the day, making the year-to-date (ytd) net buy reached Rp 9.4 trillion. The index has expanded by 6.7 percent so far this year.
The strengthening index this time is mostly supported by internal sentiments, such as stable inflation rate and positive outcome of a limited Cabinet meeting held Tuesday, during which President Joko "Jokowi" Widodo expected the economy to grow by 5.6 percent in 2018 and 5.1 percent this year, Bina Artha Sekuritas senior analyst Reza Priyambada wrote in a text message.
"This sets aside several negative sentiments, such as weakening global bourses and rupiah value," he wrote.Rupiah value against the US dollar, meanwhile, weakened slightly by six points to Rp 13,331 on Tuesday.
Mirae Asset Sekuritas Indonesia projects the index to continue its upward move to between 5,640 and 5,676 on Wednesday.
Exxonmobil supports Indonesia`s renewable energy projects 2025
Antara News, 05/04/2017
ExxonMobil Lubricant has contributed to the success of the renewable energy program 2025 in Indonesia."To support the achievement of renewable energy program by 2025, we are introducing a lubricant for engines operating using natural gas," General Manager of Indonesia Business Venture, ExxonMobil Lubricants Indonesia, Sigit Wagiyo, said here on Tuesday.
He explained that Indonesia has not had a development for gas-based engine till date. Hence, the use of lubricant is still in the introductory stage.
Sigit stated that despite business competition, the industry players should take into account the efficiency, both in terms of techniques and productivity, in order to improve the companys performance.
In Texas, US, an energy company operates Waukesha 9390 machine for extracting natural gas from debris and other solid formulations in a safe and environmentally friendly manner.
By using Mobil SHC Pegasus Lubricant 30, which is proposed by an ExxonMobil Field Technician, the company managed to extend its lubricant changing period, reduce equipment downtime, increase productivity, as well as boost annual savings of US$24,000.
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Government agrees to give Freeport provisional business permit
Antara News, 05/04/2017
The government through the Energy and Mineral Resources (ESDM) Ministry has agreed to grant a provisional Special Mining Business Permit (IUPK) to Freeport Indonesia valid until October, 2017.
Secretary General of the ESDM Ministry Teguh Pamudji in an news conference here on Tuesday said the government and Freeport have held intensive negotiations since February after the US based mining company rejected the change in its contract from contract of work (KK) to IUPK.
Teguh said the government wants to cope with the deadlock over the status of Freeport in two phases -- short term and long terms.Short term settlement is backgrounded by the need to give legal basis and business certainty for Freeport, he said.
Also the short term settlement would give clearance for the government over contractual relations after the Government Regulation No. 1 of 2017 on the fourth revision of the Government Regulation No 23 of 2010 on Implementation of Business Activities of Mineral and Coal Mining Business.
"In discussion on short term issue last week, we agreed with Freeport that IUPK would be granted provisionally for 8 months," Teguh said.
With the IUPK, Freeport is allowed to export concentrate in 8 months by paying export tax, he added."While issuing the IUPK, we still honor the regulations in the KK contract," he said.
Teguh, who is also the chairman of the Government Team of Negotiators, said starting next week there would be a second round of negotiation on long term settlement for 8 months from February 10 to October 10 this year.
In the negotiation on long term settlement, a number of points to be discussed include regulation related to investment stability, continuation of the operation of Freeport, divestment and construction of smelter (mineral refining and processing facility).
Teguh said if after the negotiations on long term settlement ended without agreement between the government and Freeport, the subsidiary of the U.S. mining giant Freeport McMoRun Copper and Gold would return to its KK status until its termination in 2021. "If the negotiation still ended in deadlock, it (Freeport) could return to KK in status but may not export," he said.
Director General of Mineral and Coal Bambang Gatot said the second round of negotiation would discuss in greater details investment stability that Freeport could get operational supporting facility.
"Also to be discussed in the negotiation is operational extension. Based on the government regulation extension is 2x10 years -- from 2021 to 2031 in the first phase and 2031-2041 in the second phase," Bambang said.
Other important issues to be discussed include divestment of shares to Indonesian partners up to 51 percent and certainly extension of contract."As for the 51 percent divestment, it is to be realized in the next four years by 2021. That is the logic," he said.
The regional administration both provincial and district/city administrations in Papua would be involved in the process of negotiations on long term issues, he added.(*)
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Freeport Resumes Mineral Concentrate Exports
The Energy and Mineral Resources Ministry has allowed PT Freeport Indonesia to resume mineral concentrate exports despite the lack of agreement on its regulations. Negotiation on the construction of a smelting facility is also ongoing.
"In the discussion on long-term [benefits], the point being talked about was investment stability, the continuity of Freeport's operations, divestment, and smelter construction," the Energy Ministry secretary-general Mohamad Teguh Pamuji said in Jakarta on Tuesday, April 4, 2017.
The Energy and Mineral Resources Minister Regulation No. 5/2017 states that mining companies are required submit plans for smelter construction before being allowed to export mineral concentrates.
The ministry will appoint an independent auditor to examine the construction. Less than 90 percent completion would entail revocation of export recommendation.
The ministry said that, despite pending agreement, Freeport is committed to establishing a smelter. The smelting plant is located in the city of Gresik, East Java, with an annual production capacity of 2 million tons.
The project cost USD 2.1 billion. The construction, however, is only 14 percent complete. Freeport’s promise to commence construction in June 2016 failed to materialize.
An export recommendation for Freeport was issued on February 17, 2017. The ministry has allowed Freeport to export 1.13 million tons of mineral concentrates per year. The recommendation was given following the issuance of a special mining business permit (IUPK) to Freeport.
Freeport, however, has yet to apply for an export permit with the Trade Ministry. Because the company has yet to agree on the IUPK without legal and fiscal certainty equal to that of contained in the contract of work.
Freeport Indonesia spokesman Riza Pratama declined to comment on the resumption of export. Riza said that negotiation with the government is ongoing. "We continue to negotiate and it's going well," Riza said.
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Indonesia, Malaysia cooperate to promote MSMEs
Antara News, 05/04/2017
State-owned insurance company Perum Jamkrindo is cooperating with Malaysias Credit Guarantee Corporation, Malaysia Berhad, to expand the funding and market potentials of micro, small, and medium corporations.
Jamkrindos Chief Executive Officer Diding S. Anwar said in a press statement received here on Tuesday that his office fully supported the Malaysian companys decision to initiate a cross-country cooperation aimed to further develop Micro, Small, and Medium Enterprises (MSMEs).
"We have suggested that both Jamkrindo and Malaysias CGCMB sign a Memorandum of Understanding to accommodate the measures that would be taken to further train MSMEs from both countries," he stated while receiving the CGCMB delegations.
CGCMB is Indonesias development partner as well as the countrys counterpart in the Asian Credit Supplementation Institutions Confederation.
Anwar further said that Jamkrindo will be launching the Management Consultation and MSMEs Accompaniment programs aimed to train both insured and non-insured businesses in order for them to strengthen their endeavor and reach the international market.
Indonesias MSMEs also need access to both Malaysian market and supply chain, he added.For that reason, Indonesia and Malaysia can partner up to expand the MSMEs through a number of measures, including empowering each others diasporas, he noted.
"Perum Jamkrindo and CGCMB can be expanded through a number of ways, including by information dissemination or management consultation for MSMEs with the adequate business potentials, the creation of markets or outlets that are sustained by Indonesia and Malaysia, the empowerment of diasporas in each country, as well as other measures that can promote the roles of MSMEs from both countries in the regional ASEAN level and in the international community," he concluded.
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Contractors Sign Jakarta - Bandung Bullet Train Agreement
PT Kereta Cepat Indonesia Cina (KCIC) and High-Speed Railway Contractor Consortium (KSRCC) signed an engineering, procurement, and construction (EPC) contract on the Jakarta – Bandung bullet train on Tuesday, April 4, 2017.
PT KCIC president director Hanggoro Budi Wiryawan said that the contractors will proceed with construction following the contract signing.
The bullet train is expected to commence operations by 2019. Hanggoro had said very little about land clearing issue and its funding. Hanggoro only expressed that he continued to try to solve the problem.
Four state-owned enterprises in the bullet train consortium were reportedly having difficulty making payments for land clearing.
China Development Bank (CDB), the debtor of the project, was reportedly reluctant to disburse loans before the SOEs sorted out the land clearing problems.
The State-Owned Enterprise Minister expert staff Sahala Lumban Gaol on March 20 said that the government was discussing land clearing problem with China Development Bank (CDB). The CDB has offered bridge option.
Hanggoro said that the discussion with the CDB on bullet train project requirements is ongoing. He is hopeful that an agreement could be reached as soon as possible. "They will be in Indonesia for two weeks, so we have to make an all-out effort to discuss with them in order to meet all requirements," Hanggoro said.
The loan agreement with the CDB is worth USD 5.2 billion or Rp69.4 trillion. The KCIC and HRSCC had earlier signed a letter of agreement worth USD 4.302 billion.
However, Hanggoro today said that the project is worth USD 4.7 billion. "After a more accurate detailed design, we came up with the figure," Hanggoro said.
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Banks Record Profit Increase, Lower Performance
Indonesian banks were considered to be underperforming in the period of January to February 2017. PT Mandiri Sekuritas analyst Tjandra Lienandjaja said that his research showed that 12 banks recorded 12 percent increase in net profit, year on year (YoY), in the first two months of 2017.
"The figure is still under our expectation for the full [financial] year; national banks are capable of netting 15 percent of consolidated net profit," Tjandra said in a written statement on Wednesday, April 5, 2017.
According to Tjandra, banks recorded a slightly lower profit than expected as of February 2017 due to lower lending growth at 10.5 percent (YoY) and unchanged net interest margin (NIM) at 6.1 percent.
Some notable performances of national banks were recorded by PT Bank Danamon Indonesia Tbk (BDMN) and PT Bank Permata Tbk (BNLI) who booked negative credit growth (YoY). Meanwhile, 10 banks recorded three to 23 percent growth (YoY). The entire 12 banks netted 10.2 percent growth in third party funds (YoY), albeit constituting a 2.1 percent decrease year-to-date (YTD).
The survey showed that provisions of the 12 bank increased by seven percent (YoY) with 21 percent cost of credit (CoC). According to Tjandra, compared to other major banks, PT Bank Central Asia suffered a substantial provision expenses drop by 78 percent (YoY), whereas other three major banks recorded 24 to 58 percent increase in provision expenses."We still recommend neutral status on the banking sector," Tjandra said.