Daily Business Briefing – Oct. 20

JAKARTA (TheInsiderStories) – Good morning, here we provide several pieces of important news that might help your business decisions today:

Indonesia Central Bank Holds Fast on Rate

Bank Indonesia has hung onto its benchmark 7-day reverse repo rate, which stays unchanged at 4.25 percent as of Thursday (19/10), stating Southeast Asia’s biggest economy should grow better than initially expected and that earlier trims were feeding through. BI Board of Governors says economic growth this year will remain within its forecast of 5.0-5.4 percent. The rate decision was consistent with maintaining inflation and Rupiah exchange rate stability, BI says, noting that the central bank will also continue to monitor global risks, such as actions by the U.S. Federal Reserve, as well as geopolitical uncertainties in Europe and on the Korean peninsula.

Government to Jack Up Tobacco Excise By 10%

The Government, through the Ministry of Finance, has indicated it plans to raise excise on tobacco products by an average of 10.4 percent in 2018. This year, the government has taxed all sorts of tobacco products in a range that starts as low as 22 Rupiah per traditional cigarette, to as high as 110,000 per stick for cigars. Those taxes represented a 10.5 percent average increase over 2016, as authorities aim to raise Rp155.4 trillion Rupiah in revenue from excise taxes in 2018. A small chunk is predicted to derive from a newly-imposed excise tax on plastic bags.

Mitra Adiperkasa to sell shares to their employees

PT Mitra Adiperkasa Tbk (IDX: MAPI) plans to sell shares in its subsidiary, PT MAP Boga Adiperkasa Tbk., to a number of key employees. Based on the company’s information disclosure at the Indonesia Stock Exchange on Thursday (19/10), the Company’s maximum is 31.43 million shares, equal to 1.45 per cent of the total issued and paid-up capital in MAP Boga Adiperkasa.

Finance Ministry to Issue T-Bills for Pre-funding

Finance Ministry is considering whether it will issue “treasury bills” (T-Bills) to pre-fund budget expenditures during the first two weeks of 2018, Director of Debt Strategy and Portfolio Directorate General of Financing and Risk Management of the Ministry of Finance Scenaider Siahaan said on Oct. 19. The cash requirement for expenditures in the first two weeks of early 2018 is estimated to reach Rp50 trillion (US$3.70 billion). Meanwhile, as of 3Q 2017, new tax revenues reached Rp 770 trillion, or just 60 percent of the targeted Rp 1,283.57 trillion. The negative growth of tax revenues is largely due to the non-recurring receipt of tax amnesty proceeds and a final revaluation tax.

KAI to Issue Rp 2 Trillion Domestic Bond

State-owned railway operator PT Kereta Api Indonesia (KAI) is offering five-year and seven-year bonds valued at Rp 2 trillion, President Director Edi Sukmoro revealed. The five-year bond carries an indicative coupon of 7.25% ~ 8.00% and the seven-year at 7.5% ~ 8.35%. The bonds are rated idAAA by Pemeringkat Efek Indonesia (Pefindo) and will be offered publicly on November 14-16, and listed on the Indonesia Stock Exchange on November 22, 2017. Acting as underwriters are Mandiri Sekuritas, Bahana Sekuritas, BNI Sekuritas, Danareksa Sekuritas, and BCA Sekuritas.

Government allocates Rp3.7 trillion to develop geothermal 

The Indonesian government has budgeted Rp3.7 trillion to develop geothermal potential, through a geothermal fund. Director in Ministry of Energy and Mineral Resources Yunus Saefulhak says the geothermal fund set up by the government through the State Budget (APBN) this year amounts to Rp 3 trillion, and a US$55,2 million or Rp700 billion grant from World Bank complements it.