JAKARTA (TheInsiderStories) – Good morning, we provide several important news that migh help your business decision today.

Indonesia Balance of Payment Expected To Reach US$11 Billion

Central Bank is looking at a US$11 billion surplus in Balance of Payment this year, higher than previous expectation of US$9 billion. This results from current account deficit (CAD) of around 1.5 percent to 2 percent of GDP this year, along with a financial and capital transaction balance. Last year, Indonesia recorded US$12.1 billion with CAD stood at US$16.3 billion or arround 1.8 percent of GDP.

New Injection Peps Up Bank Muamalat 

Islamic lender PT Bank Muamalat Indonesia Tbk has officially announced a new Rp4.5 trillion (US$450 million) capital injection, in order to encourage the growth of the company. Muamalat will issue up to 80 billion new shares, or 50 percent of the current total, through a rights issue, to PT Minna Padi Investama Sekuritas Tbk. (PADI), as a standby buyer. Currently, Bank Muamalat Indonesia is owned by shareholders of Islamic Development Bank or IDB (32.7%), Boubyan Bank, Kuwait (22.0%), Atwill Holdings Limited, Saudi Arabia (17.9%), National Bank of Kuwait (8.5%), and several other business entities and individuals. Boubyan Bank is owned by the National Bank of Kuwait.

Indonesia and India To Breakdown Regulatory Barries

Indonesia and India have agreed to promote business ties and breakdown trade barriers, according to a statement from both countries Minister of Trade. Both will expedite progress of working groups to find ways to lift trade barriers. The meeting ended with Indonesian side agreeing to inspect dairy, bovine export, vegetable, meat manufacturing plant exports, with a view to granting them registration. The ministers also aggreed to give government, business and entrepreneur greater access to each other market

MEMR Rejects Thermal Coal Price Base Proposal

Indonesia’s Energy and Mineral Resources Minister Ignasius Jonan has stated that he disagrees with a proposal for domestic thermal coal to be priced based on a cost-plus margin mechanism, amid pressure to reduce costs borne by the state power utility. “Costs could be set as they please,” Jonan told reporters at a Ministry event on Thursday, referring to the production costs of coal miners.

Freeport Could Get Six Months Extension for Negotiation

Indonesia’s Energy and Mineral Resources Minister Ignasius Jonan said on Thursday that Freeport McMoRan Inc could request an extension of six months to renegotiate rights to Grasberg, the world’s second-biggest copper mine, which is due to end next month. Freeport and the government announced a framework agreement for a new permit late last month, under which the company agreed to divest a 51 percent stake in Grasberg, among other terms, and retain operational control until 2041. Indonesian Government halted Freeport’s copper concentrate exports in January under new rules requiring miners to adopt a special permit, pay new taxes and royalties, divest a 51 percent stake in their operations and relinquish arbitration rights. In April, the government awarded Freeport a permit to export 1.1 million tonnes of copper concentrate until February next year, but said shipments could be stopped again in October if negotiations over a new permit were not resolved by then.

Indonesia’s IIP Rose to US$350 Billion in Q2

Indonesia’s International Investment Position (IIP) Net Liability rose to US$350.2 billion in second quarter (Q2) of 2017. The increase was due to a larger increase in Foreign Financial Liabilities (FFL) compared to the increase in Foreign Financial Assets (FFA). Indonesia’s FFA position increased 2.7 percent on quarter to quarter (QtQ) basis or $8.4 billion to $317.4 billion as of end-Q2. The rise was mainly driven by increase in “other investment asset” position, mostly in the form of offshore deposits related to the banks anticipation to meet temporary liquidity needs in Lebaran long holiday. Meanwhile, Indonesia’s FFL position at the end of Q2 rose 3.7 percent QtQ or $24.1 billion to $667.6 billion. The increase was mainly influenced by an influx of foreign capital inflows, in the form of direct investment and portfolio investment. The increase in FFL position was also influenced by rising value of the rupiah-denominated investment instruments in line with the Jakarta Composite Index rally.

Foreign investors compete for Komodo Airport

Transportation Minister Budi Karya Sumadi has said that investors from Australia and South Korea are competing to invest in the expansion of Komodo Airport in Labuan Bajo, East Nusa Tenggara, which is being developed into a major tourist destination. They will soon offer a Komodo Airport [expansion] plan. Two investors have been competing to win the project. He added that the investment value of the airport expansion was estimated at Rp 2 trillion (US$149.48 million).

 

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