Daily Business Briefing – Sept. 15

JAKARTA (TheInsiderStories) – Good morning. We offer readers several relevant news items that might help your business decisions today :

Indonesia’s Antam To Export 1.25MT Nickel Ore
Indonesia’s PT Aneka Tambang Tbk (IDX: ANTM) plans to request a quota expansion to be allowed to export 1.25-million tons of nickel ore, on top of the 2.7-million tons already allocated to the state-owned miner. Company is currently completing documentation of verification by independent surveyor, and will then submit the application to the government. The additional ore export quota would be “in accordance with company smelter capacity”. To date, Indonesia has issued export permits for 8.2-million tons of annual nickel ore exports.

Riyadh Group To Develop US$1.1 Billion Property Project in Sumatra
Riyadh Group plans to gradually develop Batang Anai tourist area in West Sumatera over next 15 years, with a total investment of Rp15 trillion (US$1.14 billion). Development of the first phase of the project will require a budget of Rp1 trillion. Riyadh Group has already secured a 400 hectare (ha) land bank and will establish a 1,200-capacity resort in the area. The Saudi Arabian company also plans to develop 200 ha of property in Mandeh tourist area and already having secured a 10 ha land bank. Riyadh Group intends to transform the area into an integrated tourism area on the model of Mandalika District in West Nusa Tenggara.

US Inflation Data Key Ahead of Fed Meeting
While the CPI number is not the U.S Federal Reserves’s preferred measure of inflation, it is released two weeks before the core PCE price index and before next week’s meeting, at which the Central Bank is expected to announce plans to begin reducing its nearly-$4.5 trillion balance sheet. Traders have not been overly concerned about the tightening aspect of this until now, but they are worried about whether the Fed will delay plans for another rate hike before the end of the year. Markets are pricing in only a 47 percent chance of a December hike at the moment, with growing concerns within the Fed about below-target inflation clearly taking its toll. Further disappointing data today will not make policy makers any more inclined to pursue further hikes in coming months.

Indonesia’s August Trade Balance Surplus Expected
Mandiri Securities estimates trade balance should score a surplus of US$734 million in August, from a deficit of US$270 million in July. Exports and Imports are expected normalize to 14 percent on a yearly basis and 11.4 percent, respectively, from 41.1 percent and 54 percent the previous month, where the former may gain from commodity price hike and the latter may increase with investment-related activities.

Indonesia Deposit Insurance Corporation Cuts Interest rate By 25 Bps
The Indonesia Deposit Insurance Corporation has cut its guaranteed interest rate by 25 basis points on rupiah deposits made by commercial banks and rural banks. The guaranteed interest rate for the rupiah deposits of commercial and rural banks was reduced to 6 percent and 8.5 percent, respectively, while the rate for foreign currency deposits was maintained at 0.75 percent. Both rates will be effective from Sept. 15, 2017 to Jan. 15, 2018.

Indonesia Will Simplify Property Developers’ Permit

Home Affairs Ministry of Indonesia will streamline the permit application process for property developers, said Minister Tjahjo Kumolo on Sept. 14. He also pointed out the move to simplify the permit application process will be aimed to empowering the private sector. Since the decision to grant permits is in the hands of regional regulations, the Minister added, they will be required to be selective while not hampering. Kumolo hopes that Real Estate Indonesia will be able to build affordable houses for the public. He said that every regional head must be committed to providing housing for the people.

Global CPO Prices Could Drop 15% 

Crude palm oil (CPO) prices are expected to drop nearly 15 per cent by the end of 2017. James Fry, Chairman of LMC International, a London-based agri commodities trading firm, said at GloboilIndia 2017 that CPO prices are set to decline to 2,400 ringgit a ton by current year-end, primarily because of huge supply coming in from Malaysia and Indonesia. Dorab Mistry, Director, Godrej International, added that there was little opportunity for an increase in CPO prices from the current level. (The Business Standard)

Indonesia Wants to Become Corn Exporter by 2020

Indonesia wants to be a corn exporting country by 2020. The Agriculture Ministry expects corn production this year to mark 24.5 million tons, from last year’s 23.5 million tons. The national demand is estimated at 19 million tons, mainly from the feed milling industry.