Wednesday, August 21, 2019
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Indonesia’s Sarana Menara Eyes Indosat’s Tower

, PT Sarana Menara Nusantara Tbk (IDX: TOWR) also interested to acquire 3,000 towers owned by PT Indosat Ooredoo Tbk (IDX: ISAT) - Photo by the Company

JAKARTA (TheInsiderStories) – Local tower operator, PT Sarana Menara Nusantara Tbk (IDX: TOWR) also interested to acquire 3,000 towers owned by PT Indosat Ooredoo Tbk (IDX: ISAT). If it goes well, the total management of the company’ towers will reach more than 21,000 towers, said the management today (08/20).

Previously, state-owned telecommunication, PT Telkom Indonesia Tbk (IDX: TLKM), via its subsidiaries PT Dayamitra Telekomunikasi (Mitratel) was admitted joined the tender. Indosat targeting to raise US$300 million from the tower sale.

Adam Ghifari, Deputy Director of Sarana Menara explained that there are still many funding schemes that can be carried out by this company in the context of the inorganic growth. For organic growth, the company owned by Djarum Group, has allocated capital expenditure Rp3.5 trillion (US$246.48 million) in this year.

In the first semester (1H) of 2019, Sarana Menara managed 18,100 towers with a rental point reaching 2,900 base transceiver station (BTS).

Last year, the operator has completed the acquisition of 100 percent of PT Komet Infra Nusantara (KIN) from PT Nusantara Infrastructure Tbk(IDX: META). Aming Santoso, President Director of TOWR said,  PT Profesional Telekomunikasi Indonesia (Protelindo), other company owned by Djarum, will take over tower the assets following the shares sale.

Based on the sale and purchase agreement signed on March 23, 2018, META’ unit PT Telekom Infranusantara sold its 1.31 billion shares in KIN around Rp1.40 trillion. Through this acquisition, Sarana Menara gets additional 1,400 towers spread across North Sumatra, Riau, Batam, most of Java and Bali.

In addition, KIN also operates fiber optic cable network especially in Surabaya, Batam and Medan. This year, KIN’ sales is estimated to reach Rp325 billion with approximately 70 percent of revenues coming from PT Telkom Selular (Telkomsel), PT XL Axiata Tbk (IDX: EXCL) and Indosat.

Protelindo owns and operates over 14,500 towers in Indonesia. Its unit was established in January 2003 and has become the largest independent owner and operator of towers for wireless operators in Indonesia. Protelindo’ primary business is leasing space at its multi-tenant tower for all major wireless operators in Indonesia under long-term lease agreements.

Observes rated, telecom industry EBITDA will grow at mid-single-digit rates, underpinning the continuing rational competition in the Java region and gradual data monetization. The operator’ spending is likely to be higher in 2018 and 2019, as telecom operators invest to meet rising demand for LTE services.

Meanwhile, there will be a strong fixed segment momentum for cable and fibre broadband services, propelled by a broadband network target of achieving 71 percent of urban households at 20Mbps by 2019, from around 10 percent.

US$1: Rp14,200

by Linda Silaen, Email:

WhatsApp Looks to Launch Mobile Payments in Indonesia

WhatsApp reportedly in talks with multiple Indonesian digital payment firms to offer their mobile transaction services - Photo: Privacy.

JAKARTA (TheInsiderStories)WhatsApp, United States’ Facebook Inc’s messaging service, reportedly in talks with multiple Indonesian digital payment firms to offer their mobile transaction services, Reuters has reported today (08/20), in a bid to tap the nation’s fast-growing e-commerce sector.

Sources said, WhatsApp is in advanced talks with companies such as local unicorn GOJEK, Ant Financial-backed Dana, and Lippo Group’ financial technology startup Ovo, with the deals expected to be finalized shortly. Based on the country’ strict licensing regulations, WhatsApp will only serve as a platform supporting payments through local digital wallets in Indonesia.

Southeast Asia’s largest economy was home to 260 million people and one of the top five markets globally for Whatsapp, with over 100 million users. The country is set to see its e-commerce industry tripling to US$100 billion by 2025, according to some estimates, but it also has some of the region’s strictest digital payments regulations.

Indonesian E-Commerce Association (idEA) data showed that the number of internet users in Indonesia continues to grow every year. In 2017, the number of internet users was 72.8 million, which then rose to 102.8 million in 2018. In 2019, Indonesian internet users are predicted to reach 112.6 million.

While sample data from e-commerce in the country shows an average of 87 percent of visits come from mobile usage. These findings further prove that the share of mobile device users is considerable potential in reaping a higher number of visits.

Predicted, the trend of the e-commerce industry in Indonesia this year grew by 31.3 percent and reached profits of up to $3.8 billion, developer Saas Anchanto data recently released. This raises optimism that the adoption of credit cards, debit cards, and e-money will continue to rise with the encouragement of banks and cellular operators as service providers. Moreover, an online transaction is still one of the main choices of consumers in Indonesia.

Indonesia could become the second country worldwide where WhatsApp introduces such services, as it awaits regulatory approval from India, its biggest market by users, that has been delayed due to local data storage rules. But unlike in India where it plans to offer direct peer-to-peer payment services, WhatsApp will simply serve as a platform in Indonesia supporting payments via local digital wallets due to tough licensing regulations, Reuters source said.

The Indonesia model could become a template for Whatsapp to adopt in other emerging markets to get around regulations on foreign players creating their own digital wallets, the sources said.

It said WhatsApp is in advanced talks with several digital payments firms including ride hailer Go-Jek, mobile payments firm DANA, backed by China’s Ant Financial, and fintech startup OVO, which is owned by Indonesian conglomerate Lippo Group and is also backed by ride-hailing company Grab, the sources said.

Deals with the three firms are expected to be finalized shortly, the people said, declining to be named as the talks are private. WhatsApp has also approached one of the largest banks in Indonesia  PT Bank Mandiri Tbk(IDX: BMRI), which operates a digital wallet, they said.

The Indonesia plan comes after Facebook CEO Mark Zuckerberg announced earlier this year that it would be rolling out WhatsApp payments to some countries. The payments feature will enable businesses to now accept payments from customers in addition to the existing ability to interact with customers via alerts and the new product catalogs.

“Payments is part of the vision that I am particularly excited about. I believe it should be as easy to send money to someone as it is to send a photo. We’re already testing this in India. We have about a million people. It’s already being used a lot and the feedback so far is great. We’re already working on rolling out in a number of countries later this year,” said Zuckerberg.

Facebook believes that the future is private and intends to solely build its products with privacy in mind over the next couple of years. Payments are just one of the ways the company is looking to bring this privacy-focused vision to life.

In some countries, more people have WhatsApp accounts than bank accounts. The ability to send money as easy as it is to send a message via WhatsApp is likely going to revolutionize the payments industry as we know it.

By layering payments on top of private messaging, Facebook will position its products in a much more attractive way to both businesses and individuals looking for more private experiences that offer holistic features. Payments are no doubt at the heart of it.

Written by Lexy Nantu, Email:

Indonesia’s Medco to Prepare IPO for Its Two Subsidiaries

Sarulla Geothermal (Credit: PT Medco Energi Indonesia).

JAKARTA (TheInsiderStories) – Indonesian oil and gas producer, PT Medco Energi Internasional Tbk (IDX: MEDC) plans to prepare an initial public offering (IPO) for PT Medco Power Indonesia (MPI) and PT Amman Mineral Nusa Tenggara (AMNT). The company is also looking for a strategic partner to work on projects with MPI, said the management on Monday (8/19).

Director Finance and International Planning Medco Energi Internasional Anthony R. Mathias said the company had appointed JP. Morgan is looking for MPI’s strategic partners which understand the development of gas to electricity conversion and master in the technology of gas conversion into liquefied natural gas (LNG). He claimed to have received offers from a number of parties but did not mention the origin of the prospective investor.

Furthermore, Mathias also confirmed that he would prepare an IPO for AMNT. However, he also could not reveal the details, but it is still seeing the right candidate for the underwriter.

MPI is the subsidiary of Medco Energy with the ownership of 100 percent. Currently, MPI is managing several gases, geothermal and water power plants.

While, Medco officially controlled 50 percent of PT Amman Mineral Investama (AMI) shares on November 3, 2016. AMI is an indirect controller of 82.2 percent of AMNT which controls the Batu Hijau copper and gold mine in the Sumbawa Islands.

On the other hand, Medco has completed the Ophir Energy acquisition, therefore Ophir’s performance will begin to consolidate into Medco’s books from early June 2019. Furthermore, Ophir will synergize with Medco in the areas of finance, supply chain, maintenance, and several other aspects.

The synergy is expected to increase efficiency by up to US$30 million per year. With this efficiency, the company’s profit is expected to increase this year. While in the first semester of 2019, the company’s net profit was corrected by 32.76 percent to $27.86 million from $41.44 million in the first semester of 2018.

Written by Staff Editor, Email:

Indonesia’s Waskita Beton to Issues US$106M Bonds

Waskita Beton Precast' projects in Kalimantan - Photo: The Company.

JAKARTA (TheInsiderStories) – Indonesia’ construction services firm PT Waskita Beton Precast Tbk (IDX: WSBP), plans to issue bonds of Rp1.5 trillion (US$105.63 million) in the fourth quarter of 2019. The bonds are part of a total bond of Rp2 trillion, said the management on Tuesday (8/20).

Company’ Corporate Secretary Fathia Syafurah said the subsidiary of state-owned contractor developer PT Waskita Karya Tbk (IDX: WSKT) had issued Rp500 billion of the total Rp2 trillion issuance. Syafurah explained the funds from the bond issuance will be used for working capital of Rp500 billion. While the rest will be used for refinancing.

The investment of Rp500 billion will be used to prepare a factory in Penajam Paser Utara, East Kalimantan. This plant was built to absorb market in the central and eastern regions of Indonesia, even regional markets in Southeast Asia. The Plant in Penajam will have a production capacity of 250 thousand tons/year and produce Box Girder, PCT Girder, Square Pile, and CCSP.

The company will also use the plant for supporting facilities in the form of production area, workshop area, and waste treatment area. Waskita Beton plans to expand by having its own jetty to facilitate access to shipping precast products directly from the plant to other islands because it has a strategic location with Balikpapan Bay.

As of July 2019, Waskita Beton received a new contract of Rp3.29 trillion or around 31.7 percent of the target value of the new 2019 contract. The company also maintains synergy with the Waskita Group for business development projects such as electric power poles, 1067 railroad bearings, Building precast, and façades; and initiating cooperation with global companies operating in Indonesia.

Three months ago, the company has issued a bond amounting to Rp500 billion with a three-year tenor. The total offering amounts to Rp2 trillion. The underwriters in the issuance are PT Danareksa Sekuritas, PT Bahana Sekuritas, PT Mandiri Sekuritas, PT BNI Sekuritas, PT Indopremier Sekuritas, and PT CGS-CIMB Sekuritas Indonesia.

The company said the bond issuance aims to support the company’s capital expenditure of Rp900 billion in 2019. WSBP has also budgeted working capital of Rp6 trillion to Rp7 trillion to pursue this year’s revenue target of Rp10 trillion and net profit of Rp1.31 trillion.

Meanwhile, at the end of 2018, WSBP had received payment of Rp 1.8 trillion for the Krian-Legundi-Bunder-Manyar toll road project and other projects. This year, the company is optimistic can achieve the target because infrastructure projects are still rife.

The government has prepared an infrastructure budget of Rp415 trillion to support connectivity, housing provision, and food security. The targets for infrastructure development include the construction of 1,837 kilometers of roads and 37,177 meters of bridges and 16 toll road projects.

This budget is also to continue the construction of a dam of 48 units. Then the railway line will cover 394.8 km, complete new airports in four locations, and build an irrigation network of 170.4 thousand hectares.

Last year, WSBP’s production capacity reached 3.5 million tons, an increase of 7.7 percent compared to 2017 which was 3.25 million tons. At present, WSBP has 11 plants spread across a number of regions, namely Cibitung, Palembang, Karawang, Subang, Sadang, Sidoarjo, Kalijati, Bojonegara, Klaten, Gasing, and Legundi. The company also has 72 batching plants.

Last year, the value of the new WSBP contract reached Rp6.66 trillion. The total contracts managed (order book) worth Rp17.34 trillion, including carry-over contracts in 2017 amounting to Rp10.68 trillion.


Written by Staff Editor, Email:

Indonesia Eximbank, African BDEAC Signs US$50M Framework Agreement

Indonesian Eximbank signed an uncommitted framework agreement on a Bank Line Facility worth US$50 million with the Development Bank of the Central African States (BDEAC)-Photo: TheInsiderStories.

JAKARTA (TheInsiderStories)Indonesian Eximbank signed an uncommitted framework agreement on a Bank Line Facility worth US$50 million with the Development Bank of the Central African States (BDEAC), the agency announced today (8/20). The funds to support infrastructure projects that will use the Indonesian contractor’s services in the Central African Economic and Monetary Community (CEMAC) countries.

CEMAC consists of six countries such as Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo and Equatorial Guinea. Besides providing financing facilities, Indonesian Eximbank can also provide assistance in the form of capacity building and technical assistance. The collaboration was unveiled at the two days 2019′ Indonesia Africa Infrastructure Dialogue (IAID) forum held today and tomorrow in Bali. The forum has a strategic theme of “Connecting for Prosperity” will be attended by 700 delegates from both Indonesia and 53 African countries.

To realize these projects, Indonesian Eximbank is collaborating with state-owned construction developer, PT Wijaya Karya Tbk (IDX: WIKA) and PT Dirgantara Indonesia (PTDI), state aircraft manufacturer.

In this partnership, Indonesian Eximbank is committed to supporting the WIKA’s project of $356 million. The project is the construction of a bulk liquid terminal port in Zanzibar – Tanzania worth $40 million. Then, a $250 million integrated business development project in Senegal. And social housing project worth $66 million in Pantai Gading.

The three infrastructure development projects in Africa are one form of service exports. Going forward, the project’s business value can still increase because the total project value for the port in Zanzibar is $190 million, and the construction of flats in Pantai Gading is worth a total of $200 million.

While with PTDI, the agency signed a Memorandum of Understanding (MoU) which included working capital financing for the company, as well as buyer’s credit facilities for prospective customers of PTDI in the African Region.

The MoU with PTDI is the export of goods which can also be facilitated by the buyer’s credit scheme. The provision of the Buyer’s Credit facility can only be provided by Indonesian Eximbank, with the aim of increasing Indonesia’s exports from the buyer side or demand side. This scheme is a tangible form of the role of Indonesian Eximbank as the ‘fill the market gap’.

The financing facility provided uses the Buyer’s Credit scheme. Buyer’s Credit is an overseas financing facility in the form of working capital and/or investment financing provided by Indonesian Eximbank to overseas buyers to purchase goods and/or services produced in Indonesia. Buyer’s credit is a facility provided by the agency with the aim of increasing Indonesian exports from the demand side.

Indonesian Eximbank as the Ministry of Finance’s Special Mission Vehicles with a mandate to increase national exports took an important role in efforts to increase exports to African countries. This effort also reinforces the position of the agency to play its role in the concept of ‘fill the market gap’, given that these projects are considered to have a high enough risk by the Banking sector in general.

Indonesia, under the leadership of President Joko Widodo, wants to focus more on Africa to forge a strong economic partnership between the world’s biggest archipelagic nation and all 54 African countries. In April 2018, Indonesia launched the first-ever Indonesia-Africa Forum, which not only gave a new shape to the old and strong relations between Indonesia and Africa but also resulted in more than half a billion dollars of business deals in sectors of strategic industries, infrastructure financing, mining, textiles, aircraft maintenance, and trade.

No wonder Widodo’s administration has been consistently allocating a huge budget for infrastructure development since he assumed his post in 2014. For example, Indonesia has allocated Rp415 trillion ($28 billion) for infrastructure projects in 2019, a huge jump from Rp256.1 trillion in 2015.

Indonesia is expected to become the fourth-largest economy in the world by 2050. In order to achieve this, the Indonesian economy must grow sustainably, for which infrastructure development is vital.

Likewise, Africa, which has the second-fastest growing economy in the world after Asia, needs to build more roads, bridges, railway lines, airports, seaports, houses, apartment complexes, office buildings, power plants and water facilities to prosper more in the coming years.

With its 1.32 billion people (2019 estimate), Africa offers many opportunities for Indonesia and its businesspeople. It is also the youngest continent as its present median age is just 19.4 years. Like Indonesia, Africa is very rich in natural resources. This year, the average overall growth of African countries will be 4.3 percent. Many countries in Africa have the potential to grow more than 5 percent in the next five years.

Written by Lexy Nantu, Email:

Asia’s Sluggish Exports Widens Japan’s Trade Deficits in July

Japan’s real GDP growth for the first quarter of 2019 was revised up marginally to 0.6 percent quarter to quarter. Photo: Privacy.

JAKARTA (TheInsiderStories)Japan’s trade deficit widened by 9.8 percent year on year (YoY) to JPY249.6 billion (US$2.3 billion) in July on a non-seasonally adjusted basis. The trade deficit also expanded by 273.9 percent in July from the previous month to JPY126.8 billion on a seasonally adjusted basis, recording the fifth consecutive month of a deficit.

Export volume increased by 1.6 percent (YoY) – the first annual rise in nine months- and this helped narrowing the contraction in export values to 1.6 percent (YoY) from a 5.5 percent (YoY) drop in June. However, the decline in import value also narrowed to a 1.2 percent (YoY) drop from a 5.2 percent (YoY) drop in the previous month.

The major contributor to the contraction in exports was continued sluggishness in exports to Asia (an 8.3 percent annual drop), largely reflecting declines in exports of auto parts, semiconductor machinery, iron and steel, and semiconductors.

Nevertheless, exports to the United States (US) accelerated to 8.4 percent (YoY), thanks largely to increases in exports of ordinary machinery (such as semiconductor machinery), autos and aircraft, while exports to the European Union (EU) rose 2.2 percent (YoY), following three consecutive months of decline, driven by exports of autos.

Even though import volumes rose 6.7 percent (YoY), import value contracted largely because of lower import prices of crude oil, other commodities, and semiconductors, in tandem with weak global demand and softer outlooks for the global economy. Declines in imports of crude oil, petroleum products, non-ferrous metals, and semiconductors were partially offset by increases in imports of foodstuffs, computers, clothing and accessories, and other consumer goods.

Solid exports to the US reflected the movement of manufacturing facilities to the US in order to avoid repercussions from US-China trade tensions and possible downside effects from ongoing US-Japan trade talks.

However, slower global demand, particularly from China, and the recent yen appreciation are likely to weigh on Japan’s exports over the near term. The July Jibun Bank Manufacturing Purchasing Managers’ Index by IHS Markit indicated continued declines in export orders, which could mean a continued contraction in production and cautious approaches to fixed investment.

While rises in imports of foodstuffs partially reflected bad harvest due to rainy and cool weather, the free trade agreement with the EU and the Trans-Pacific Partnership have contributed to the increase in imports of foodstuffs, and the uptrend is likely to continue. IHS Markit expects front-loaded demand ahead of the consumption tax increase, scheduled for October 2019, to support increases in import volume for the third quarter of 2019.

US$1 = JPY106.579

Written by Lexy Nantu, Email:

Indonesian Govt Tightens Coal Import Duty Rule

Indonesia's non-government organizations (NGOs) urged President Joko Widodo and Parliament to cancel mineral and coal bill draft - Photo: Privacy.

JAKARTA (TheInsiderStories) – Indonesian government has tightened the fiscal facilities in the form of exemption from import duties and value-added tax (VAT) on imported goods in the context of a work contract and a coal company cooperation agreement, said finance ministry yesterday (08/19).

In the recent regulation PMK No. 116/PMK.04/2019 issued by the ministry, the fiscal authority specifies that the provision of fiscal facilities must include the exemption or relief of import duties on imported goods in the work contract and a coal company cooperation agreement. In addition, the contractor is also required to include the period of release.

This also applies to contractors who want to get a fiscal facilities in the form of VAT exemption. In essence, both facilities in the form of exemption from import duty and exemption from VAT of each contractor need to include it in the contract.

In the previous regulation PMK No.259/PMK.04/2016, the contractor didn’t need to include the provisions regarding the period for granting exemption or relief of import duty and VAT on imported goods in the context of work contracts or cooperation agreements.

“In order to allow the exemption or relief of import duties to be more targeted, and in the context of improving policies, standardization, technical guidance, and harmonizing policies in the field of mining facilities,” article 31 of the regulation said.

Then, “The Director at the Directorate General of Customs and Excise who carries out duties and functions in the field of customs facilities can monitor and evaluate the implementation of the exemption or relief of import duties on imported goods for activities in the context of work contracts or cooperation agreements.”

The government said the implementation of the new policy was carried out following the mineral and coal law which in the implementation of mineral and coal mining business activities, work contracts and work agreements could change the form of mining operations to become a Special Mining Business License.

The regulation also emphasized that, with the granting of the fiscal acquisition period, the facilities in the form of relief or exemption from import duties, including VAT, would be effective from the signing of the contract until the 10th year of production operations.

However, the exemption from import duty can still be given until the end of the contract period for the four types of contracts. First, the contractor of the cooperation agreement whose contract was signed before 1990.

Second, the contractor of the cooperation agreement whose contract includes the provisions regarding the granting of exemption or relief of import duties on imported goods in the framework of the cooperation agreement.

Third, the contractor of the cooperation agreement whose contract does not include provisions concerning the time period for the exemption or relief of the import duties. Fourth, the contractor for a cooperation agreement whose imported goods is state property.

It said the regulation was issued to further improve taxation and customs services in the field of mineral and coal mining, orderly administration, supervision, and legal certainty in providing taxation and customs treatment of imported goods in the context of work contracts or coal mining concession work agreement.

Written by Lexy Nantu, Email:

ADB Prepares US$3B to Support Indonesia’s Power Projects Until 2021

Asian Development Bank is planning to provide about US$3 billion in financing between 2019 and 2021 to help the government' power sector, mainly in eastern Indonesia - Photo by ADB

JAKARTA (TheInsiderStories) — Asian Development Bank (ADB), is planning to provide about US$3 billion funds between 2019 and 2021 to help the government’ power sector, mainly in eastern Indonesia. Recently, the multilateral agency has mobilized funds a $120 million to build the 72-megawatt (MW) Tolo Wind Power Project in Jeneponto District, South Sulawesi and began operations last December.

In addition to the ADB loan, the Tolo Power Project is supported by two trust funds Asia’ Private Sector Infrastructure Fund and the Canadian Climate Fund for the Private Sector in Asia II. Its expected to generate clean power to be sold to state-owned power producer PT Perusahaan Listrik Negara, also known as PLN.

“The wind farm, the second-largest in Indonesia, will provide reliable electricity to South Sulawesi and help increase the portion of clean energy in the country’s power supply, for which the Government of Indonesia has set a target of 23 percent by 2025,” says Energy and Mineral Resources Minister Ignasius Jonan in an official statement on Monday (08/19).

Indonesia has abundant sources of renewable energy, including solar, wind, and biomass, but it lags many of its Asian neighbors in converting them into electricity. The wind power project will show a way forward by demonstrating how to successfully integrate variable renewable generation into the country’s main power grid run by PLN.

Electricity access is a challenge in Indonesia. Despite the government’ efforts to increase electricity access to 98.3 percent in 2018, 4.5 million Indonesians still don’t have electricity, because they are too poor to afford the connection or live in far-flung islands or remote hinterlands. Added to that is the high cost of last-mile electrification.

Eastern Indonesia, where power grids are small, isolated, and less reliable, represents the biggest challenge to Indonesia’ ultimate goal of universal and sustainable access. In 2018, only 88 percent of residents in Gorontalo, 84 percent in Central Kalimantan, and 62 percent in Nusa Tenggara Timur, for example, have access to electricity, compared with more than 90 percent in Java and Bali.

ADB opined, turning this around could spur economic growth in eastern Indonesia, as reliable energy can help the region develop high-value agriculture, fisheries, tourism, as well as small and medium-sized enterprises. Currently, uneven development across these provinces, aggravated by unstable power supply, has led to widening income disparities, especially when compared with Java and Bali.

“The government has started to implement much-needed reforms to build a sustainable energy sector. Those reforms have reduced energy subsidies and improved the performance of state-owned enterprises, encouraged private sector participation in the gas and power markets, and expanded the markets for renewable energy and energy efficiency,” says ADB Southeast Asia Department Energy Director Mr. Andrew Jeffries.

He adds, “Yet a lot remains to be done, and the policy and regulatory developments to date won’t singlehandedly deliver Indonesia’s renewable energy and energy access targets.”

In recent years, ADB said has focused on improving the state-owned electricity grid across Indonesia’ islands, including Sumatra, Java, West Kalimantan, Sulawesi, and Nusa Tenggara, to increase access, as well as the share of grid-connected variable renewables, including wind and solar.

A $600 million results-based loan from ADB to PLN seeks to improve electricity distribution in six provinces in Sulawesi and two provinces in Nusa Tenggara, providing stable services to residential, commercial, and industrial customers. It also aims to foster innovation and technology, especially in areas such as waste management and smart grid development.

For example, in Selayar Islands Regency, the most southern end of South Sulawesi, a smart-grid pilot project—one of four supported by the ADB loan—will be the first such system planned by PLN for a small, isolated island market. The hybrid generation system uses solar panels to generate electricity, smooths out the intermittent solar production with batteries, and then dispatches it to the grid.

The solar power plant will have 1.3 MW of installed capacity, complementing the 10 MW capacity of expensive diesel-powered generators. The peak demand of the regency’s main island is 5 MW. The solar energy can help stabilize electricity supply and help the island meet its energy demand at lower cost and more sustainably.

“The pilot will help PLN expand the use of smart grids, which rely on a higher mix of renewable energy to support the country’s transition toward more environmentally sustainable growth,” says ADB’ Indonesia Country Director Winfried Wicklein.

He continued, “The project will enable PLN to integrate more variable renewable energy into its electricity-generation mix, thereby increasing opportunities for private investors to support Indonesia’s goal to build more wind and solar power plants.”

In all, he stated, the results-based loan will help provide electricity to 1.3 million people in eastern provinces and reduce electricity outages. Electricity access is a challenge in Indonesia. Despite the government’s efforts to increase electricity access to 98.3 percent in 2018, 4.5 million Indonesians still don’t have electricity, because they are too poor to afford the connection or live in far-flung islands or remote hinterlands. Added to that is the high cost of last-mile electrification.

ADB is also supporting the government’s reform agenda through a policy-based loan to strengthen reforms to improve fiscal sustainability, introduce measures to improve private investment in electricity and gas and support the expansion of renewable energy and energy efficiency policies.

Written by Staff Editor, Email:

Morning Briefing: US to Relieve Huawei Sanctions for Another 90 Days

US-China Trade Battle Hits Global GDP as Negative for 2-3 Years
United States and China have agreed to resume trade talks - Photo by GettyImages

JAKARTA (TheInsiderStories) – Washington relieved China’ Huawei Technologies Co., sanctions for another 90 days that had protected rural networks and other United States (US) customers from a ban on doing business with the company.

Huawei responded that the temporary relief“does not change the fact that the provider has been treated unjustly. Over the weekend, President Donald Trump indicated the US was “doing very well with China, and talking” but also suggested he wasn’t ready.

Immediately, US stocks rallied after the Trump administration signaled progress on trade negotiations and Commerce Secretary Wilbur Ross announced the extension. On Sunday, Trump said he would keep Vice President Mike Pence as his running mate in 2020′ election.

From Europe, the European Commission said that the European Union (EU) was ready for a no-deal Brexit with Britain caused they believed the country would suffer most under such a program. The  spokeswoman Natasha Bertaud said the program would never be the EU’ preferred scenario.

In July, Eurostat reported euro-area inflation slowed to 1 percent over the last 12 months, down from 1.3 percent in June and an initial estimate of 1.1 percent. While, European Central Bank (ECB) reported the current account of the euro area recorded a surplus of 18 billion Euros, compared with a surplus of 30 billion Euros in May 2019.

In the 12-month period to June 2019, the current account recorded a surplus of 318 billion Euros (2.7 percent of Euro area GDP), down from 391 billion Euros (3.4 percent of Euro area GDP) in the 12 months to June 2018.

From Asia, Japan’ foreign minister Taro Kono stated will meet his South Korean counterpart, Kang Kyung-wha, in Beijing tomorrow, amid deteriorating relations between the two countries. The talks will come during a trip to Beijing from Tuesday until Thursday for a meeting with their Chinese counterpart Wang Yi.

In Indonesia, President Joko Widodo said he understood the feelings of the people of Papua and West Papua that there was an offense. For this reason, he appealed to all citizens of the two provinces to be patient and forgive one another. While, Coordinating Minister for Political, Legal and Security Affairs Wiranto instructed the national apparatus to explore the main causes of the riots in Manokwari, West Papua.

He said that the riots could not be separated from the incidents of attacks on Papuan student dormitories in Surabaya and Malang in East Java because of alleged harassment of the Red and White flag. That was added by racist comments addressed to students by a number of parties.

On mining sector, the government is tightening the granting of fiscal facilities in the form of exemption from import duties and value added tax on imports by coal companies.

In the Minister Finance regulation PMK No.116 / PMK.04 / 2019, the fiscal authority specifies that the provision of fiscal facilities in addition must include the exemption or relief of import duties on imported goods in the Contract of Work and the New Coal Mining Business Cooperation Agreement, the contractor also required to include the period of release.

On Monday, Indonesian Rupiah lowered to 14,238 compared to last weekend. While, the Jakarta Composite Index closed up 0.16 percent to 6,296.72 compared to Friday.

Today, the composite index is estimated move in the range 6,200 to 6,340. The stock to be watch for today are PT Japfa Comfeed Indonesia Tbk (IDX: JPFA), PT Adaro Energy Tbk (IDX: ADRO), PT Adhi Karya Tbk (IDX: ADHI), PT Indosat Tbk (IDX: ISAT), PT Perusahaan Gas Negara Tbk (IDX: PGAS), and PT Eastparc Hotel Tbk (IDX: EAST).

May you have a profitable day!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia

Indonesia’s Bank Tabungan Negara to Issues US$461M Bonds

PT Bank Tabungan Negara Tbk (IDX: BBTN) plans to issue bonds with a total value of US$461 million. The bonds consist of rupiah-subordinated bonds of Rp3 trillion ($211 million) and junior global bonds of $200 million to $250 million - Photo: TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesia’s lender, PT Bank Tabungan Negara Tbk (IDX: BBTN) plans to issue bonds with a total value of US$461 million. The bonds consist of rupiah-subordinated bonds of Rp3 trillion ($211 million) and junior global bonds of $200 million to $250 million, management said on Monday (8/19).

Director of Collection & Asset Management BTN Nixon Napitupulu explained, the company plans to issue rupiah-subordinated bonds before the end of December 2019. While for junior global bonds, they will be issued in the fourth quarter of 2019, November 2019 or no later than January 2020.

The debt issuance will be used to increase the capital adequacy ratio (CAR) to 19 percent. By the increasing of CAR, the company can expand quickly.

Furthermore, the company also plans to increase its share ownership in PT Permodalan Nasional Madani Investment Management (PNMIM) to 60 percent. To date, the company is awaiting approval to increase ownership by 30 percent in PNMIM.

The company is also waiting for a shareholder’s decision to form a venture capital company. The company will later be used to accommodate Finarya transactions and fintech acquisitions.

Meanwhile, in the first half of 2019, BBTN booked assets of Rp312.47 trillion, growing 16.58 percent from the same period last year which reached Rp268.04 trillion.

Napitupulu said the increase of the company’s assets was contributed by a positive movement in financing and collecting deposits. BBTN recorded loan growth by 18.78 percent from Rp211.35 trillion in June 2018 to Rp251.04 trillion in June 2019. While the deposits per June 2019 are Rp219.75 trillion, up 15.89 percent in annual basis.

On June the bank has announced to issue Rp3.14 trillion local bond for loan expansion and other needs. The bond divided into three series, series A valued Rp1.5 trillion with 7.75 percent interest rate and one-year maturity, series B valued Rp803 billion with 8.75 percent interest rate and 3 years maturity, and series C valued Rp835 billion with 5 years maturity.

The property-focused bank also considered exploring alternative funding instruments to strengthen liquidity. One of them is by issuing global bonds with values ​​up to $300 million. Previously, BBTN had obtained foreign loans from Australia’ ANZ with a value of $165 million.

Recently, finance director of the bank, Iman Nugroho Soeko giving a grid if the coupons would be 5 to 10 basis points higher than similar instruments issued by PT Bank Rakyat Indonesia Tbk (IDX: BBRI).

On April 22, the lender announced has bought 30 percent or 33,000 shares of PNMIM for Rp114.3 billion. According to President Director of BBTN, Maryono, his party had included a planned to have an investment management company for the periods 2019-2021.

Maryono stated that with the presence of the new subsidiary, the company would be freer to collect and provide long-term low-cost funds. With the option of raising cheaper funds more broadly, the lender hopes to provide a more affordable housing finance scheme for Indonesia.

In addition, the new investment management company is also targeted to increase the company’ fee-based income. The bank plans to sell various investment products with the presence of these subsidiaries.

These include mutual funds, Limited Participation Mutual Funds, Fund Management Contracts, Asset-Backed Securities, and Real Estate Investment Funds. The company also targets to sell various wealth management products that will be offered to BBTN Priority customers. Meanwhile, in BBTN’ business plan for 2019-2021, the lender also targeted to have subsidiaries in the fields of life insurance, general insurance, and finance companies.

The formation of various subsidiaries is focused on supporting the provision of affordable homes for Indonesia. The lender also planned to secure synthetic homeownership loans to get funds Rp2 trillion this year.

By raising the funds, its expected support the bank’ housing loan growth. Soeko explained the underlying of this securitization are future cash flows from principal repayments and interest payments from a set of separated mortgage loans. The underlying house ownership loan is a housing loan portfolio that has been chosen and separated.

In addition to securitization, Soeko also confirmed this year it would re-issue the remaining shares of sustainable bonds with a total amount up to Rp3 trillion, from the total available quota of Rp5 trillion in this year. He revealed the wholesale funding plan is also used to pursue loan expansion of 13-15 percent in 2019.

At the of 2018, the bank report managed assets worth of Rp308.47 trillion, or up 18.02 percent compared to the previous year. Loan growth rose 19.48 percent to Rp237.75 trillion and deposits up 19.09 percent from Rp177.56 trillion to Rp211.46 trillion in 2018. The bank reaped a net profit of Rp3.2 trillion or only grew Rp5.92 percent. BBTN expect will begin the entry process to BOOK IV in 2020.

Director Strategy, Risk and Compliance Mahelan Prabantarikso, said the process of adding capital to be able to enter the level is most likely through a rights issue. Other ways use assistance from the state-owned holding bank that will be formed in this year.

Last year, the lender’ credit grow 19.48 percent to Rp237.75 trillion compared the previous year, while the third party funds rose 19.09 percent from Rp 177.56 trillion to Rp 211.46 trillion from 2017. By this achievement, in 2018, the bank has managed to reap a net profit of Rp3.2 trillion, grew 5.92 percent in annual basis.


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Indonesia Eyes 73.6M Foreign Tourists in 2045

Lombok's Mandalika Project in West Nusa Tenggara Province - Photo: National Development Planning Ministry

JAKARTA (TheInsiderStories) – The government is targeting Indonesia as a leading Asian and World tourism destination by 2045 with a total of 73.6 million foreign tourist visits, from the 18 million people set for 2019, said National Development Planning Minister Bambang Brodjonegoro today (08/19).

“Indonesia’s diversity which includes more than 17 islands, 300 ethnic groups, 700 languages, world heritage sites, as well as the third-largest biodiversity is a great potential for tourism development,” Brodjonegoro said at the Integrated Tourism Masterplan Meeting in Jakarta.

He continued in 2020 the government will focus on developing leading destinations with a target of 21.6 million foreign tourists, in 2025 increasing competitiveness with a target of 31.8 million people, in 2030 increasing diversity of tourism with a target of 42.8 million people, in 2035 increasing the integration of tourism with a target of 57.5 people.

Furthermore, in 2040 the strengthening as Asia’s flagship destination with a target of 65.1 million people, and finally in 2045 the strengthening as the world’s flagship destination with a total of 73.6 million people visiting.

“In 2045 when we celebrated 100 years of Indonesian independence, we were already in the high-income country category. Because currently, our status is still middle income. Then in 2045 where the population increased to 320 million people, life expectancy will improve in 75 years, the majority of Indonesia’s population will also live in cities, we are targeting our economy to no longer rely on natural resources, but all sectors that have added value including tourism,” he said.

Besides the manufacturing and agriculture sectors, he went on, the tourism sector also directly contributed to foreign exchange reserves so as to strengthen the economy externally. Then tourism must become a government’s concern so that it can become the backbone of the Indonesian economy in 2045.

Tourism can also contribute to inclusive growth and more balanced national development by bringing investment to remote areas with tourist attractions. Tourism Minister Arief Yahya is optimistic that by the end of 2019 the number of tourist visits could reach the target of 18 million, higher than the Bank Indonesia projection which mentions 17.6 million visits.

The minister said that the tourism sector is one of the main foreign exchange-earners. In 2018, Indonesia’s foreign exchange income from the tourism sector reached US$17 billion, rose $2 billion from $15 billion a year earlier. And in 2019, the government targets the tourism sector to contribute $20 billion in foreign exchange.

So the government continues to accelerate the development of four priority tourist destinations to reach the revenue target. President Joko Widodo had previously established 4 super-priority tourism destinations, namely Lake Toba in North Sumatra, Borobudur Temple in Central Java, Lombok-Mandalika area in West Nusa Tenggara, and Komodo Island – Labuan Bajo in East Nusa Tenggara.

The government plans to disburse funds up to Rp2.4 trillion ($171.43 million) in 2020 to build infrastructure in an effort to encourage the tourism industry in the Lake Toba National Tourism Strategic Area in North Sumatra to become an international-scale tourist destination. This year the government has budgeted Rp821.3 billion.

Maritime coordinating minister Luhut Binsar Pandjaitan said the infrastructure includes the construction of the Samosir ring road, Tano Ponggol bridge, revitalization of Lake Toba, imbuing, water treatment, sanitation, and structuring of the Lake Toba area.

“The government have a development program that will be implemented in Lake Toba from 2019 until 2020. We have created a Lake Toba strategic area development program. The program is an integrated program from all sectors that have surveyed,” he said.

The strategic move is a response to the commitment of Widodo who has decided to prepare a management plan for Lake Toba as a classy tourist destination.

During a visit to Lake Toba months ago, Widodo said there were 28 tourist destinations in the area around Lake Toba, which had a historical, cultural, natural and psychological side to the community. Therefore, the government needs large investments, including funds from the state budget.

According to the President, the project to develop the tourism area around Lake Toba will be carried out starting in 2019 and is expected to be completed in stages starting in 2020.

For supporting facilities, Widodo suggested that everything is integrated, including products, human resources, packaging, brand, and distinctive differentiation with Bali and Mandalika. In addition, the President also said the need for an advanced and modern crossing port architecture in Lake Toba and could inspire young people to attract tourists.

Tourism is one of the fastest-growing industries in the world, and Asia is one of the hottest destinations, the Asian Development Bank latest report showed. Since 2011, global international arrivals have been growing at an average annual rate of 4.8 percent, adding about 55 million new visitors each year, to reach 1.4 billion in 2018.

Furthermore, international tourism receipts expanded by 4.3 percent per year since 2011, adding an average of $54 billion annually, to reach $1.34 trillion in 2018. Domestic tourism to has made impressive strides, with global receipts hitting $4.1 trillion in 2018, far more than international tourism.

In Asia too tourism is taking off. Of the 1.4 billion visitors who traveled abroad in 2018, 343 million went to Asia. And, of the $1.34 trillion of international tourism receipts in 2018, $390 billion was spent in Asia, the report shows.

Asia thus accounts for 25 percent of international visitors and 29 percent of international tourist spending. International arrivals rose by 65 percent in Asia between 2010 and 2018, compared to 47 percent globally.


Written by Lexy Nantu, Email:


Telkom Indonesia Eyes Various Companies to Strengthening the Business

PT Telkom Indonesia Tbk (IDX: TLKM) admitted has joined other cellular provider PT Indosat Ooredoo Tbk (IDX: ISAT) bidding - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesian telecommunication provider, PT Telkom Indonesia Tbk (IDX: TLKM) admitted has joined other cellular provider PT Indosat Ooredoo Tbk (IDX: ISAT) bidding to acquire part of its towers. Beside Telkom, publicly listed tower operator PT Menara Sarana Tower (IDX: TOWR) also joined the bidding process.

“Yes we are joined the bidding. If we win we will put the new tower under PT Mitratel management,” said Finance director Telkom Harry Zein today (08/19) in Jakarta.

Recently, Indosat announced to release as much as 3,000 unit towers to other parties. Its hope the transaction will have values over than US$300 million.

Beside Indosat, Zein stated, Telkom also in talks with PT Bank Rakyat Indonesia Tbk (IDX: BBRI) to launch the state-owned lender’ second satellite in 2023. He added, “Not much information right now cause still in the process. But we assured it will be win-win solution for both parties.”

Furthermore, he continued, Telkom and power producer, PT Perusahaan Listrik Negara have a discussion to partnering in access service. No further details on the plan.

On the e-commerce platform deal, Zein explained, Telkom Indonesia still calculating the acquisition planned but admitted his party open to collaborating with several leading e-commerce companies in developing its digital businesses.

Some local media reported, Telkom wants to acquire 51 percent of Bhinneka’ shares. However, both companies did not confirm the size and the value of the acquisition.

The company itself has an e-commerce subsidiary with brand collaboration with United Staes’ e-commerce player eBay. While, Bhinneka was founded by Hendrik Thio, Nicholas, Johannes, Darsono, and Tommy in 1993 focus on the distribution and sale of IT products.

The 1997-1998 economic crisis made Bhinneka change its business model into an online shop. Currently, Bhinneka applies an online to offline (O2O) business model by having several physical outlets.

This year the operator targeting to spend Rp35.31 trillion of capital expenditure, or 27 percent of last year total reveneus Rp130.78 trillion. The funds not including for acquisition planned.

Telkom as a group managed six businesses portfolios such as mobile, fixed line, wholeshale & international, network infrastructure, enterprise digital, and consumer digital.

The Government of Indonesia owned 52.09 percent Telkom shares while the remaining 47.91 percent shares belong to public. Telkom’ shares are traded on the Indonesian Stock Exchange and on the New York Stock Exchange, which lists it as TLM.

US$1: Rp14,200

by Linda Silaen, Email:

Moody’s: Indonesian Textile Companies Not Immune to US – China Trade Tensions

Textile Factory - Photo by PT Sri Rejeki Isman

JAKARTA (TheInsiderStories) – Moody’s Investors Service rated that the United States (US) – China trade dispute could lead to an influx of Chinese yarn, fabric and garments into Indonesia. It said, potentially disrupting the so far stable levels of demand and supply in Indonesia by pushing up supply, which would in turn depress prices and hurt local manufacturers.

Moody’s explains that tariffs imposed by the US on Chinese textile exports are at 25 percent versus the 10 – 15 percent that Indonesia has implemented.

“The Indonesian textile companies that we rate are not immune to the dumping of Chinese textile products in Indonesia, should it occur,” says Stephanie Cheong, a Moody’s Analyst in the latest report.

She continued, “Nevertheless, these companies’ credit profiles should stay stable over the next 12-18 months, because exports account for a high portion of their total sales, and because they maintain long-standing customer relationships and produce a strong range of value-added products that are not easily replaced by imported manufactures.”

Moody’s points out that while there are fears that Chinese companies will redirect their textile products to Southeast Asia, including Indonesia, initial trade data estimates published by Bank Indonesia for the six months between January and June 2019 show that the year-over-year value of imports and exports has broadly held steady.

The Advisory Council of the Indonesian Employers Association Sofjan Wanandi said President Donald Trump has already delivered a warning for Indonesia and plans to withdraw the country’ special treatment in trade. The US leader’ threat in order to prevent the US from flooding Indonesia’s goods.

“He (Trump) offhanded, including to us (Indonesia). Trump has given us a warning and we talk to him about some rules about the special tariff treatment the country gives to us, especially for the textile,” he said.

Trump’ threat to Indonesia’ textile companies listed on the Indonesia Stock Exchange (IDX) such as PT Sri Reject Isman (IDX: SRIL), PT Eratex Djaya Tbk (IDX: ERTX), PT Panasia Into Resources (IDX: HDTX), and PT Indo-Rama Synthetics (IDX: INDR).

Wanandi give advises to Indonesia’ businessman to remain vigilant and focus on their business. He also requested that entrepreneurs in general not be too worried, because the impact of a feared commercial war will not immediately, but afterward.

The Trump’ threat over Indonesia is reasonable as the country recorded deficit in trade balance with Indonesia. In 2017, Indonesia booked US$9.59 billion trade surplus with the US.

The trade war potentially shifted the exports of the two countries to Indonesia. China potentially shifts the steel and aluminum exports to Indonesia, while the US will seek the new markets for fruits and soybeans.

The condition will worsen Indonesia’s trade deficit. According to the Central Statistics Agency data, Indonesia booked US$13.89 billion deficit in non-oil and gas trade balance deficit to China. Indonesia recorded US$21.32 billion in export to China, lower than the import from the country of US$35.51 billion.

In addition, the trade war potentially reduce the volume of the global trade that will hurt Indonesia’s export-oriented industries including palm oil, rubber, textile, food and beverage, and electronics. As a result, it will worsen the country’s trade deficit.

Furthermore, the trade war will exacerbate the rupiah exchange rate against the US dollar as the investors shift to the developed countries currencies. The weakening Rupiah simultaneously increases imported raw material that will cause higher production cost. Not only hurt the local industries’ competitiveness, it also potentially harms the people’s purchasing power.

Given the implication of a full-blown trade war could be extensive, the government does not seem to have definite anticipatory measures to minimize its impact.

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Indonesia Targets to Develop 22 NSP Projects in 2020

Indonesian government targeting to build 22 new infrastructure projects under National Strategic Projects in 2020, said CMEA minister Darmin Nasution on Friday (08/16) - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesian government targeting to build 22 new infrastructure projects under National Strategic Projects (NSP) in 2020, said senior minister on Friday (08/16). From 223 projects in NSP’ lists, he adds, around 100 projects has been completed.

“Right now, 22 projects in the offering process and we expect start to build in 2020. While, some projects in the land clearing process, in develop process, bidding process and other stages,” coordinating minister for economic affairs Darmin Nasution told TheInsiderStories.

Finance minister Sri Mulyani Indrawati revealed, in the draft of 2020 State Budget, the government allocated around Rp419.2 trillion (US$29.52 billion) funds for infrastructure project. In this year, President Joko Widodo’ government aimed to spend Ro399.7 trillion.

Of the total, she elaborated, the government spending worth of Rp187.50 trillion will allocated for the infrastructure projects. Then, transfer to regional government Rp199.90 trillion and through State financing firm Rp31.8 trillion. President also wants the participating of private sector more involve in the projects.

She continued, public works and public housing ministry get Rp102.5 trillion funds in the coming years. Most of the funds will use to develop road with length 837 kilometers, railroad 238.8 kilometers, bridge 6.88 kilometers, three new airport, 49 dams, and 7,224 houses.

While, transportation minister Budi Karya Sumadi explained, his ministry joined with other ministries get Rp6.3 trillion funds to develop the non toll road project in South Sumatera and Riau province (Rp2.0 trillion), Makassar – ParePare railway in South Sulawesi (Rp1.0 trillion), Bau-Bau port in Central Sulawesi (Rp200 billion), and Anggrek Port in Gorontalo (Rp300 billion).

For land transportation, the institution targeting to construct Type A Terminal with costs Rp71.19 billion, rehabilitation of the international goods terminal Rp75 billion, road equipment (33 provinces) Rp550 billion, road transport subsidies (307 projects) Rp135 billion, and urban infrastructure of Rp250 billion.

In the railroad sector, he said, the ministry aimed to develop 238.80 kilometers of railroads with total investment Rp3.62 trillion, an increase of 229.48 kilometer of rail lines Rp1.59 trillion, and construct one unit of special building worth of Rp107.4 billion.

The institution also plan to build four new airports amounting to Rp346.5 billion, 14 new airport terminals worth of Rp320.7 billion, an extension of the runway of 27 airports Rp563.7 billion, and pioneering air transport subsidies (192 routes) Rp514 billion.

For the Palapa Ring project (West, Central, East and Multifunctional Satellite), the government allocated Rp28.3 trillion funds. The projects consist of Palapa Ring for west region Rp1.2 trillion, for central region Rp1.0 trillion, for east region Rp5.4 trillion, and multi function satellite Rp6.6 trillion.

On the tourism sector, the minister of tourism Arief Yahya revealed, the government has four five super priority destination to become the “new bali” in Indonesia. The projects are Borobudur in Central Java, Mandalika in West Nusa Tenggara, Labuan Bajo in East Nusa Tenggara, and Likupang in North Sulawesi.

“We expect in 2020 we have five new bali,” said the minister by adding the government wants to develop 10 “new bali” in years as part the government planned to grab 20 million tourists by 2025.

US$1: Rp14,200

by Linda Silaen, Email:

Indonesia’s PTPN III to Issue SUKUK US$70M, Eyes Laos for Expansion

PT Perkebunan Nusantara III (PTPN III) planned to release SUKUK Rp1 trillion (US$70.42 million) on November, it said on Monday (08/19) - Photo by the Company

Jakarta (TheInsiderStories) – Indonesia’ plantation producer, PT Perkebunan Nusantara III (PTPN III) planned to release SUKUK Rp1 trillion (US$70.42 million) on November, the management said on Monday (08/19). The Islamic bond will be issued in the form of a Limited Participation Mutual Fund (LPMF) in collaboration with PT PNM Investment Management (PNM-IM).

According to director of finance Mohammad Yudayat said, the proceeds from bond issuaces will be used for working capital and investment to improve productivity and business efficiency. The Sukuk Ijarah has received a single rating of A from a national rating agency PT Pemeringkat Efek Indonesia.

He continued, the signing of the SUKUK issuance deal was a follow-up to the financial closing agreement at the IMF-World Bank Meeting in Nusa Dua, Bali on October 2018. He optimistic that the emission could be absorbed by the market, followed by high response and interest of investors.

While, president director PNM-IM Bambang Siswaji said the company packages the fundraising through a LPMF product with an underlying asset in the form of SUKUK Ijarah II issued by PTPN III.

Recently, PTPN III announced expand to Laos. Dolly Pulungan, CEO of the company, added, PTPN Group also signed a cooperation agreement between PT Pupuk Indonesia and Phaiboun and Export Group, a trading company from Laos.

He explained, joined with Phaiboun, the three parties aimed to open rice, edamame soybeans, palm oil trading across the two nations. There is also planned to develop sugar cane plantations and sugar factories, as well as the development of oil palm, rubber, soybean, tobacco and other commodities owned by Perkebunan Nusantara Group in Laos.

PTPN III, a state-owned company which founded in 1996, engaged in agribusiness, especially palm oil and rubber. As a holding company of plantation sector under state own enterprises ministry. The plantation company now hold the majority of 13 plantation companies from PTPN I until PTPN XIV, PT Kharisma Marketing Bersama Nusantara and PT Riset Perkebunan Nusantara.

To date, the company consolidated as one of the largest plantation companies in the world based on the total plantation concession area. PTPN’ products are  palm oil, rubber, sugar cane, tea, coffee, tobacco and cocoa, as well as their respective downstream products.

In the first semester of 2019, PTPN III and its subsidiaries’ are covering 552,888 hectares land, rubber plantations 154,737 hectares, tea 30,279 hectares and sugarcane area alone covering 53,946 hectares.

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Breaking News: Indonesian Apparatus on Alert as Conflict in West Papua Rises

West Papua Parliament Building was burnt down by protesters - Photo: Kompas

JAKARTA (TheInsiderStories) – The Indonesian police and military personnel are on alert following the increasing tension in Manokwari, West Papua. The negotiation process is hampered considering the mass remains violent. When the officials met with the protesters, several demonstrators threw them stones. As a result, negotiations must be postponed.

“We have on alert. Negotiations are still ongoing. They directly meet the protesters. The team must retreat to calm down the situation so that the mass will be calmer. The negotiations will be resumed after the situation turns to conducive,” said National Police spokesperson Dedi Prasetyo in Jakarta today (08/19).

He adds the police chief, military commander, and deputy governor will later face the protesters again long with Manokwari community figures.

National Police suspected the mass riot in Manokwari is allegedly triggered by provocation on social media regarding the raid in a Papuan student dormitory in Surabaya.

“They are provoked by contents circulated on social media platforms about the incident in Surabaya,” Prasetyo adds.

Meanwhile, Interior Minister Tjahjo Kumolo called on all state civil servants in Papua to continue working. He appealed for them not to take to the streets and protest.

“We ask civil servants not to demonstrate. They must work at every level. According to the work schedule to serve the community,” he told the media.

Kumolo made sure it continued to serve the community. Elements of regional government in Papua are responsible for ensuring that community services continue to run.

“We have contacted the regional government. Serving the community must not stop. The entire provincial, city and regency apparatus, roads. Up to the sub-district and district levels, roads. There are no problems,” the minister adds.

Protesters in Manokwari West Papua province set fire to tires and torched a local parliament building after a demonstration against the recent detention of scores of Papuan students, local media has reported today.

The spark for the latest anger appears to have been the detention of scores of Papuan students in Surabaya, East Java, for bending a flagpole in front of a dormitory during the celebration of Indonesia’s Independence Day on Aug. 17, according to Papuan activists as reported by Kompas Tv.

Police fired tear gas into the dormitory before arresting 43, with officers calling the students “monkeys” during the operation, Albert Mungguar, one of the activists said at a news conference on Sunday.

On Monday morning, Papuan protesters set fire to a local parliament building and blocked streets in the provincial capital of West Papua, Manokwari, by burning tires and tree branches, Deputy Governor Mohamad Lakotani said.

“The city center, market, the port is next to the parliament building, as well as shopping centers. Everything’s affected. Practically, the whole city is not running, if not to say completely paralyzed,” Lakotani told Kompas TV.

Lakotani said regional leaders were currently trying to negotiate with the activity leaders. He has coordinated with the local police and army commander to meet with mass leaders so that the situation can be calm.

Television footage showed a group of about 150 people marching on the streets in Manokwari, as well as footage of smoke billowing from a parliament building.

Papua Governor Lukas Enembe said Papuans were angry because of “the extremely racist words by East Java people, the police and military”, he told broadcaster TVone.

A separatist movement has simmered for decades in Papua, while there have also been frequent complaints of rights abuses by Indonesian security forces.

National police spokesman Dedi Prasetyo said security personnel was trying to calm the situation.

“Negotiations and communication are ongoing. Generally, the situation is under control,” Prasetyo, who is based in Jakarta, told Kompas Tv.

A separate, peaceful protest of about 500 people was also underway in the town of Jayapura, the capital of Papua province, Papua police spokesman Ahmad Kamal said to Kompas Tv.

Written by Lexy Nantu, Email:

Indonesian Govt Injects US$1.24B for Eight SOEs in 2020

Indonesia’ state-owned power producer, PT Perusahaan Listrik Negara (PLN) announced that it had issued global bonds worth of US$1.4 billion - Photo by the Company

JAKARTA (TheInsiderStories) – The government will provide additional capital of Rp17.7 trillion (US$1.24 billion) for eight state-owned enterprises (SOEs) in 2020. That figure is down by Rp10 billion compared to 2019 of Rp17.8 trillion. The funding is intended to continue the development of energy sector infrastructure and connectivity between regions.

However, the granting of state capital participation to SOEs is stated to be still carried out selectively by considering the ability of leverage, financial and operational performance of SOEs as well as technical project readiness.

From the 2020′ draft state budget and expenditure, the following SOEs will get a capital injection next year. The state financing company PT Sarana Multigriya Financial Rp2.5 trillion, PT Hutama Karya Rp3.5 trillion, PT Bahana Business Development Indonesia Rp0.3 trillion.

Furthermore, PT Geo Dipa Energi Rp0.7 trillion, PT Permodalan Nasional Madani Rp1 trillion, PT Perusahaan Listrik Negara Rp5 trillion, PT National Development Fleet Rp3.8 trillion, and strengthening the current account balance Rp1 trillion.

It said the state capital investment budget is included in investment financing. Investment financing is aimed at increasing economic growth and supporting various Government policies, such as accelerating infrastructure development, encouraging national export programs, improving the quality of human resources, improving people’s welfare through cooperative empowerment, and enhancing Indonesia’s participation in the international level.

On the other hand, the government seeks funding at least Rp389.3 trillion to finance the 2020 State Budget’ deficit, said finance minister Sri Mulyani Indrawati on Friday. Next year, the deficit is estimating around 1.76 percent of Gross Domestic Products (GDP) or worth of Rp307.2 trillion.

This year, the government estimated the deficit at 1.84 percent of GDP. But some economist sees the deficit will widen to 1.93 percent of GDP. Lucky Affirman, the directorate general at the ministry said, his department has published 75 percent of this year government bond’ issuances from its target Rp827.5 trillion (gross). For 2020, he said, the government open to publishing the bond before the current year. But he declined to figure out the number.

In his speech at the parliament member, President Joko Widodo explained the Indonesian economy it’s expecting grow 5.3 percent from this year‘ target 5.2 percent. Inflation 3.1 percent, Rupiah over the Greenback at 14,400, rate of T-bills for three months at 5.4 percent, oil price $65 a barrel, oil lifting 734,000 barrels and gas lifting 1.19 million barrels equivalent.

In total, the government proposed Rp2,528.8 trillion budget to parliament for 2020. The funds will use to finance the president’ programs in his second term.

Coordinating Minister for Economic Affairs, Darmin Nasution revealed the 2020 State Budget’ focus is to accelerate the infrastructure projects, rise the human resources capacity, structural reform, simplify the investment permit and export. He expects the 2020 State Budget into effect in September.

While Indrawati explained, there are new policy and initiatives at the 2020 State Budget such as tax incentives for Human Resource, Social Protection Smart Card for College, Pre-Work Card, Basic Food Card. Then, a mini tax holiday for investment values under Rp500 milliard and other programs.

Furthermore, Bambang Brodjonegoro, minister of national planning development revealed, the government expects the poverty rate below 9 percent in 2020 from this year around 9 percent. While, the level of inequality below 0.38 percent, open unemployment close to 5 percent, and an Indonesia Development Index 72.5.


Written by Lexy Nantu, Email:

British’s PM will Tell EU Leaders to Renegotiate Brexit Deal

Boris Johnson will tell German chancellor Angela Merkel and French President Emmanuel Macron that there must be a new Brexit deal when he makes his first trip abroad as British Prime Minister - Photo Downing Street Office

JAKARTA (TheInsiderStories) – Britain prime minister Boris Johnson will tell German chancellor Angela Merkel and French president Emmanuel Macron that there must be a new Brexit deal when he makes his first trip abroad, foreign media reported. He heading to Berlin on Wednesday and to Paris in the next day.

Merkel itself was reported will refuse Johnson’ demands to abandon the backstop and renegotiate the withdrawal agreement at the G7 Summit. Instead, the chancellor will tell the Johson that Germany is ready to let Britain walk away from the European Union (EU) with no deal.

But the British’ leader said will make clear message to Merkel and Macron that his country will leave the organization on Oct. 31 with or without a deal. Johnson is expected to say that parliament will not and cannot cancel the outcome of the EU referendum.

He believed before met the two leaders, British’ member of parliament who voted against the EU withdrawal agreement could support Johson’ proposal with the prospect of no-deal Brexit. Recently, Labour Party leader Jeremy Corbyn has sent a letter to the leaders of other political parties and senior backbenchers from across parliament to lay out his plan to stop No Deal Brexit. He also invited the citizen of the country to vote of no-confidence in Boris Johnson’ government.

Through a letter to all party leaders and other senior politicians, he said as a “strictly time-limited temporary government” would delay Britain’ departure from the EU beyond Oct. 31. But some observer rated, a veteran socialist, is a highly divisive figure in parliament and could struggle to win backing for his plan.

Previously, EU’ leader Ursula von der Leyen has warned Johnson of “challenging times ahead” over his plan to renegotiate Brexit. The premier was a Brexiter who campaigned to leave the organization with or without a deal in October.

The new premier has said he would ramp up preparations for a no-deal to try to force the EU’ negotiators to make changes to the accord. He vowed to renegotiate Brexit and to quit the bloc on Oct. 31, with or without a deal to smooth the split. Now he has just 100 days to prove he is as good as his word.

“We will, of course, be pushing our plan into action, and getting ready to come out on October 31, come what may … do or die, come what may,” he said during the leadership campaign as quoted by global media.

Leyen, the German conservative set to take over at the helm of the EU from November, told media on Tuesday (07/23) that all parties had a “duty to deliver something which is good for people in Europe and the United Kingdom”.

But, in a cautionary statement, she also warned there would be “challenging times ahead of us” with the bloc and Johnson set to lock horns in the coming weeks over his vow to renegotiate the withdrawal agreement.

Those in favor of Brexit fear the backstop could trap Britain in EU trading rules indefinitely and prevent the UK from striking trade deals with countries around the world, given that a new trade accord with the bloc could take years to negotiate.

Written by Staff Editor, Email:

Bank IBK Indonesia will Officially Operates in September

PT Bank IBK Indonesia Tbk (IDX: AGRS), the merged banks between PT Mitraniaga Tbk (IDX: NAGA) and PT Bank Agris Tbk will effectively operate on Sept. 5 - Photo by Bank Agris

Jakarta (TheInsiderStories)PT Bank IBK Indonesia Tbk (IDX: AGRS), the merged banks between PT Mitraniaga Tbk (IDX: NAGA) and PT Bank Agris Tbk will effectively operate on Sept. 5, 2019, said its holding Industrial Bank od Korea last week. The merger plan has got the permission from the Financial Services Authority (FSA), the lender said.

As a first step in the merger process, the bank stated, Indonesia Stock Exchange (IDX) will stop Bank Mitraniaga trading starting today until August 22, 2019 until all the bank shares convert into Bank Agris on August 22.

Then, on August 23, Bank Agris as the result of merger will begin the first day of trading. The brand of the merger bank is expected to be approved by the regulator on August 30.

On February, 2018, IBK obtained 4.59 million shares or 87.34 per cent of Bank Agris fully paid capital from the seller PT Dian Intan Perkasa (owned 82.59 percent shares), Benjamin Jiavaranon has 0.28 per cent, and public 17.13 percent.

The bank, which is majority owned by the South Korean Government, has also acquired 71.68 percent of Bank Mitraniaga’ shares of 1.15 billion shares by Willy Yonathan and 10 million shares of Yeo Harry Yonantha. After the acquisition transaction, the composition of Bank Mitraniaga’s shareholders will change.

IBK will control Bank Mitraniaga with a share ownership of 71.68 percent, PT Sarana Steel remains 9.89 percent and Kamtono Kosasih remains 5.105 percent, Yonathan is only 1 percent and public shareholding is 12.32 percent.

This merger is a consolidation effort that is being pushed by the agency cause, currently the banking industry competition has expanded, to the financial technology industry. The existence of increasingly fierce competition will endanger small banks in business groups Book 1 and 2.

The Industrial Bank of Korea’ business plan in Indonesia is the financing of micro, small and medium enterprises. As of July 2019, IBK hold 95.79 percent of Bank Agris shares and owned 71.68 percent of NAGA shares.

Weekly Briefing: Global Attention on G7 Summit and Monetary Policies

JAKARTA (TheInsiderStories) – Good Morning! An increasing uncertainty over the outlook of United States (US) monetary policy and heightened fears of potential economic recessions rattled financial markets around the world in this week. While, August PMI numbers for the US, Eurozone, Australia and Japan are released.

All the data will be useful in assessing whether the global slowdown has persisted midway through the third quarter or rather raising the recession risks that would that will trigger further central bank stimulus around the world.

In the US, the Jackson Hole symposium and G7 Summit during this week, will take on particular significance with investors seeking updated thinking from policymakers. Flash PMI data also will take centre stage.

But Federal Open Meeting Committee minutes for July saw the first rate cut since 2008 will also be scrutinized for clarity on the future direction of US monetary policy.

With rising expectations of European Central Bank stimulus, the account of July’ policy meeting may give some signals about the scale of anticipated monetary support. August’s flash PMI data will also be closely watched. The release of final inflation estimates is also likely to lend support to the case for greater monetary support.

From Britain, media reported prime minister Boris Johnson is scheduled to meet german chancellor Angela Merkel and president of French Emannuel Macron in this week. He wants to tell the leaders there must be a new Brexit deal.

In Asia, the flash PMI and trade data will be scoured for signs of trade war impact amid growing worries over the global growth slowdown. Then, Thailand’ economic growth is likely to have picked up slightly to 2.9 percent in the second quarter, up from 2.8 percent in the opening quarter of 2019, according to IHS Markit forecast.

Given the wave of monetary easing, central bank watchers will monitor Bank Indonesia’ policy meeting as well as minutes from recent monetary policy meetings in Australia and India. While, Indonesia Stock Exchange held a series of public exposures of public listed companies for three days.

On Sunday (08/18), An unidentified man assaulted two Wonokromo Police officers working at a Police Integrated Service Center in Surabaya, East Java. The attacker didn’t have an Identity card on him. Last May, a suicide bombing took place at the Surabaya Police headquarters, injuring four officers and six civilians.

At the same day and city, Indonesian police arrested dozens of West Papuan students after a standoff over allegations the Indonesian flag was thrown into a sewer. Its reported the students were brought in for questioning over the “destruction and disposal” of the Indonesian flag, which had been hanging outside the student hostel. The students allegedly shouting anti-West Papuan slogans and threats, and singing the Indonesian national anthem.

Last weekend, Indonesian Rupiah closed up to 14,223 and the Jakarta Composite Index (JCI) to 6,286.66 from prior day amid the easing of trade war sentiment and domestic economic data. After strengthened on Friday, the Rupiah and the composite index is expecting still move in the green zone today.

The movement of the JCI will be influenced by sentiment of US – China trade war. Another sentiment that will affect the domestic market is an indication of new monetary policy by the Federal Reserves.

On the other hand, the role of the government in maintaining the stability of domestic economy is also expected to provide a positive catalyst for the market.

On Monday, the analysts sees the composited index will be move in the range 6,161 – 6,381.

They  recommended PT Wika Beton Tbk (IDX: WTON), PT Gudang Garam Tbk (IDX: GGRM), PT HM Sampoerna Tbk (IDX: HMSP), PT Astra International Tbk (IDX: ASII), PT Bank Mandiri Tbk (IDX: BMRI), PT Adaro Energy Tbk (IDX: ADRO), PT Bukit Asam Tbk (IDX: PTBA), PT Surya Citra Media (IDX: SCMA,) and PT Adhi Karya (IDX: ADHI) stock to be watch on Monday.

May you have a profitable week!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia

Indonesia Seeks Funds Over US$27B to Finance 2020′ Deficit

Indonesian government seeks funding at least Rp389.3 trillion (US$27.42 billion) to finance the 2020 State Budget’ deficit - Photo by Bappenas Office

JAKARTA (TheInsiderStories) – Indonesian government seeks funding at least Rp389.3 trillion (US$27.42 billion) to finance the 2020 State Budget’ deficit, said finance minister today (08/15). Next year, the deficit is estimating around 1.76 percent of Gross Domestic Products (GDP) or worth of Rp307.2 trillion.

“We try to reduce the deficit but not too fast to tighten fiscal policy cause we need to counter the global turmoil,” finance minister Sri Mulyani Indrawati told reporters today responded on low deficit target.

This year, the government estimated the deficit at 1.84 percent of GDP. But some economist sees the deficit will widen to 1.93 percent of GDP.

Lucky Affirman, the directorate general at the ministry said, his department has published 75 percent of this year government bond’ issuances from its target Rp827.5 trillion (gross). For 2020, he told TheInsiderStories, the government open to published the bond before the current year. But he declined to figure out the number.

“Is too early to mention the number cause we will discuss the draft first with parliament,” he explained.

In his speech at the parliament member, President Joko Widodo explained Indonesian economy its expecting grow 5.3 percent from this year‘ target 5.2 percent. Inflation 3.1 percent, Rupiah over the Greenback at 14,400, rate of T-bills for three months at 5.4 percent, oil price $65 a barrel, oil lifting 734,000 barrels and gas lifting 1.19 million barrels equivalent.

In total, the government proposed Rp2,528.8 trillion budget to parliament for 2020. The funds will use to finance the president’ programs in his second term.

Coordinating Minister for Economic Affairs, Darmin Nasution revealed, the 2020 State Budget’ focus are to accelerate the infrastructure projects, rise the human resources capacity, structural reform, simplify the investment permit and export. He expect the 2020 State Budget into effect in September.

While, finance minister Sri Mulyani Indrawati explained, there are new policy and initiatives at the 2020 State Budget such as tax incentives for Human Resource, Social Protection Smart Card for College, Pre-Work Card, Basic Food Card. Then, mini tax holiday for investment values under Rp500 miliar (US$35.21 million) and other program.

“In addition, we will also provide funds for the completion super priority tourism project like Lake Toba in North Sumatera, Borobudur in Central Java, Mandalike in West Nusa Tenggra, Labuan Bajo in East Nusa Tenggara, and Likupang in North Sulawesi. President expect that all infrastructure and content are expected to be completed by 2020,” said the minister

Furthermore, Bambang Brodjonegoro, minister of national planning development revealed, the government expect the poverty rate below 9 percent in 2020 from this year around 9 percent. While, the level of inequality below 0.38 per cent, open unemployment close to 5%, and a Indonesia Development Index 72.5.

US$1: Rp14,200

by Linda Silaen, Email: linda.silaen@theinsiderstories

Indonesia President Son’s Startup Raises Funding US$5M prom Alpha JWC

Goola, startup company created by President Joko Widodo' eldest son, Gibran Rakabuming, raised initial funding of US$5 million from local venture capital Alpha JWC Ventures - Photo by the Company

Jakarta (TheInsiderStories) – Goola, startup company created by President Joko Widodo’ eldest son, Gibran Rakabuming, pocketed initial funding of US$5 million from local venture capital Alpha JWC Ventures, it said on Friday (08/16).

Rakabuming and his partner Kevin Susanto found the traditional Indonesian beverages foood start up in 2018. This startup has a mission to introduce traditional Indonesian food and drinks to urban communities through modern packaging, unique menus, and the concept of a ‘grab-and-go’ kiosk at the strategic locations.

Now, Goola has 22 beverage menus which are divided into four series namely Signature (superior product), Tea, Coffee, and Refreshing (fresh drinks).

“Goola was initially built as a conventional culinary business, but we realized that we could do something greater,” said Susanto in an official statement.

According to him, Goola is committed to using and modifying traditional recipes and ingredients from Indonesia, thus they can be accepted by urban communities and become part of their daily lifestyle.

Meanwhile, the first kiosk of Goola was opened on August 17, 2018. Currently, the startup has five outlets spread across Jakarta’ shopping centers. The company plans to open 15 additional outlets by the end of 2019 and 100 outlets in 2020.

Susanto explained with the fresh funding, Goola will realize the target of becoming a market leader in Indonesia with outlets in big and small cities, and start expanding into Southeast Asian countries next year.

“We want Goola to be at the forefront in efforts to empower Indonesian culinary delights. We want to make Goola an icon of trends and the pride of Indonesia in the world, such as Thai Tea in Thailand and bubble tea in Taiwan, “he said.

Rakabuming added, Goola will implement the ‘New Retail’ approach through the use of applications that are currently being developed.

Later, the Goola application will maximize the transaction experience of customers through online bookings without queuing, loyalty programs, and others.

To guarantee the quality of each glass served, Goola is committed not to open a franchise and will operate by themselves every new outlet. Rakabuming and Susanto believe that by becoming the first pioneer of modern beverages startup, Goola has a great opportunity to dominate the market.

Written by Staff Writer, Email:

Widodo Announces 2020′ Macro Assumptions with Growth at 5.3%

President Joko Widodo during his state of the union address to parliament today - Photo: Privacy

JAKARTA (TheInsiderStories) – Indonesian President Joko Widodo has announced the country direction in 2020 at the People’s Consultative Assembly and House of Representatives today (8/16). The president said economic growth will be at 5.3 percent with consumption and investment as the main driving force.

Inflation will be kept low at 3.1 percent to support public purchasing power. The Rupiah exchange rate is estimated to be in the range of Rp14,400 per US dollar, amidst external conditions that are still overshadowed by uncertainty.

The government believes that investment continues to flow into the country, due to positive perceptions above Indonesia and investment climate improvement. Accordingly, the 3-month Treasury bills interest rate is estimated at 5.4 percent.

Furthermore, the Indonesian crude oil price is estimated at around US$65 per barrel. With high sensitivity to various global dynamics, the Government continues to monitor global oil and commodity price movements, Widodo said.

It’s through optimizing the utilization of natural resources, including oil and gas. So oil and gas lifting target are assumed at 734 thousand barrels each and 1.19 million barrels of oil equivalent per day.

“The whole picture of the estimated macroeconomic indicators above is the basis for the preparation of the 2020 draft state budget,” the president said.

Widodo went on to say that next year, the Government will pursue three fiscal policy strategies, namely: mobilizing revenue while maintaining an investment climate, improving the quality of spending to be more effective in supporting priority programs, and finding sources financing carefully and efficiently through strengthening the role of quasi-fiscal.

“In line with this, the 2020 draft state budget policy is designed expansively, but it remains directed and measurable. This is a manifestation of the Government’s commitment to making the state budget more focused support priority activities while keeping the risks within safe limits,” he said.

In accordance with the 2020′ fiscal policy theme, the focus of the draft state budget is directed at five main things such as: strengthening the quality of human resources to create healthy, smart, skilled and prosperous human resources; acceleration of infrastructure development supporting economic transformation.

Then, strengthening social protection programs to respond to demographic challenges and anticipate aging populations; strengthening the quality of fiscal decentralization for encouraging regional independence. Also, anticipate global uncertainty.

Based on the character of an expansive but directed and measurable fiscal policy, President sai the 2020 budget deficit is planned to be 1.76 percent of GDP, or as much as Rp307.2 trillion (US$21.63 billion). State revenues and grants totaling Rp2,221.5 trillion, and state expenditures of Rp2,528.8 trillion.

State expenditure is planned to reach Rp2,528.8 trillion, or around 14.5 percent of GDP. The state expenditure will be used to improve the quality of human resources and continue social protection programs to address demographic challenges.

In addition, spending is also aimed at increasing investment and exports, through increasing competitiveness and productivity, accelerating infrastructure to improve connectivity and supporting economic transformation, and strengthening the quality of fiscal decentralization, Widodo said.

In accordance with the constitutional mandate, the Government allocates an education budget of 20 percent of state expenditure to be Rp505.8 trillion, or an increase of 29.6 percent, compared to the realization of the 2015 education budget which is around Rp390.3 trillion.

To strengthen health services in 2020, the government has allocated Rp132.2 trillion for the health budget, or up almost double the realization of the 2015 health budget of Rp69.3 trillion.

These various expenditures are expected to encourage the achievement of development targets by 2020, namely to reduce unemployment to 4.8 – 5.1 percent. Besides, poverty is expected to be reduced in the range of 8.5 – 9.0 percent and inequality decrease in the range of 0.375 to 0.380. The government is also optimistic that human quality development can continue to be improved to reach the 72.51 indexes in 2020.


Written by Lexy Nantu, Email:

Widodo Wants Indonesia Become the 2nd Largest EV Producer in ASEAN

President Joko Widodo during his state of the union address to parliament today - Photo: Privacy

JAKARTA (TheInsiderStories) – Indonesian President Joko Widodo wants to become the second largest electric vehicle (EV) production center in Southeast Asia (ASEAN) to enter the global trends. He also wants the country have an electric car industry in Indonesia to reduce dependence on fossil energy.

“We have started to open up space for electric car development but we want more than that, we want to build our own electric car industry,” Widodo said in his official statement to parliament on Friday (08/16).

Days ago, Widodo has officially signed into effect a presidential regulation that will accelerate the development of EV in Indonesia. The regulation had been under discussion for more than a year as the president’s intent to pursue cleaner modes of transportation met with nationalistic resistance and demands for protection of local automakers.

He said the regulation showed a commitment to encourage the automotive industry to start designing and preparing to produce EV in Indonesia as soon as possible.

Nickel, a metal that is a key ingredient in the production of lithium-ion batteries for the latest generation of EV, is in abundance in Indonesia, giving the country comparative advantage. Widodo said the regulation would ensure that Indonesia’s electric car industry exploits this advantage.

“We know 60 percent of electric car components are in the batteries,” he said. “We can later overtake others to build an inexpensive and competitive electric car industry. Because we have the ingredients. So, this country is a strategic place [for businesses] to start designing an affordable and competitive electric car industry.”

Widodo went on to say that the world is currently experiencing a transition to produce environmentally-friendly vehicles. Countries in the blue continent of Europe and the United States have started to produce vehicles that do not produce exhaust emissions for environmental sustainability.

One type of environmentally friendly vehicles that will be prioritized by Widodo is an alternative fuel vehicle or called a ‘flexy’ car. The government is now continuing to examine the use of 30 percent biodiesel mixture (B30) after B20 was officially adopted last year.

“We have to be brave to start from now, we have already made several leaps in progress. We have started with the B20 program, we will enter the B30 diesel mix with 30 percent biodiesel. But we can more than that we can make B100,” Widodo said.

Testing of B30 on Solar fuel itself has begun and is predicted to end on October 2019, even involving a number of brands of diesel-engined cars. The trial is a preparatory step for the implementation of the B30 mandatory in 2020.

Widodo revealed that most electric cars available in the market today were about 40 percent more expensive than fossil-fueled cars. Therefore, he hoped that Indonesia’s ubiquitous resources of materials required for making the batteries would help push prices down, thus creating greater demand for EV.

According to a draft presented by Finance Ministry Sri Mulyani Indrawati recently, the regulation would stipulate fiscal incentives, such as import tariff incentives for battery-based EV and their supporting technology and materials, as well as value-added tax deductions and tax incentives for imported goods related to investments in the EV industry.

The government has asked French’ Renault and Swedish’ Volvo Group to consider building factories or assembly units in Southeast Asia’s largest market for cars, as it eyes production of 750,000 EV by 2030, said Harjanto, director-general of metal, machinery, transportation, and electronics at the industry ministry days ago. While Japan’s Toyota and Germany’s Volkswagen has shown interest in manufacturing EV,  according to Industry Minister Airlangga Hartarto.

The country’s total vehicle production is seen more than doubling to 3 million units during the period, he said.

Widodo has promised tax incentives to draw foreign investment in EV while also making it expensive to own fossil fuel-powered automobiles to save the country about Rp798 trillion (US$56 billion) from reducing dependence and imports of crude oil.

Previously, South Korea’s Hyundai Motor Company affirmed a $2.8 billion investment in the development of electric vehicles in West Java, as the company seeks to make Indonesia its key export hub. Hyundai aims to start operations in 2022.

Masayoshi Son, the founder of Japanese technology investment giant Softbank, has met Widodo and pledged at least $2 billion to support online-based mobility solutions and the development of electric vehicles in Indonesia.

Indonesia does not currently produce electric vehicles on an industrial scale. The Blue Bird Group, the country’s largest taxi operator, resorted to importing Tesla and BYD cars from China to establish its first fleet of electric vehicles.

While, Indonesia’ oldest car company, Djawatan Angkoetan Motor Repoeblik Indonesian, or well-known as DAMRI has prepared funds around $150 million to replace 500 diesel buses into electric buses within five years period.

The planned was based on the assumption that the management of electric power sources for battery charging by the state-owned power producer, PT Perusahaan Listrik Negara begins along with the enactment of new policies on EV.

Written by Lexy Nantu, Email:

Indonesia’s Waskita Inject Funds of US$84M in Its Toll Unit

PT Waskita Karya Tbk (IDX: WSKT) injected funds of Rp1.19 trillion (US$83.8 million) to its subsidiary, PT Waskita Toll Road - Photo by Waskita Karya

JAKARTA (TheInsiderStories) – State-owned construction developer, PT Waskita Karya Tbk (IDX: WSKT) injected funds of Rp1.19 trillion (US$83.8 million) to its subsidiary, PT Waskita Toll Road (WTR). The capital will be used for operational activities of the unit, the management announced today (08/16).

WTR will placed the cash to its unit PT Citra Waspphutowa (CW) with total amount Rp61 billion. CW owned 25 percent stake in Depok – Antasari toll road concession in West Java, joined with state-owned investment holding PT PP Tbk (IDX: PTPP) and publicly listed toll road operator PT Citra Marga Nusaphala Persada Tbk (IDX: CMNP). Both company hold 12.5 percent and 62.5 percent, respectively.

“Initial capital for the construction of the Depok – Antasari toll road space amounted to Rp1 trillion, but then increased to Rp2.12 trillion,” the company explained on the injection funds purpose.

Waskita Karya‘ owned 80.56 percent stake of WTR or equivalent to Rp12.83 trillion, while the other shares hold by PT Dana Tabungan dan Asuransi Pegawai Negeri (8.29 percent or Rp1.32 trillion) and PT Sarana Multi Infrastruktur (11.14 percent or Rp1.77 trillion).

Recently, Toll Road Regulatory Agency has ordered WTR joined with other state owned toll road operator, PT Hutama Karya and JSMR, to build toll road projects in North Sumatera. The project has value Rp13.4 trillion.

The projects including the construction of the Kuala Tanjung – Tebing Tinggi – Parapat toll road, in Medan, North Sumatra with total costs Rp9.6 trillion and targeted to operate in 2020 with a 40-year concession period.

The 143.5 kilometers (km) toll road project is a continuation of the 61.72 km Medan – Kualanamu – Tebing Tinggi toll road. Previously the Medan – Kualanamu – Tebing Tinggi had been completed and connected to the Belawan – Medan – Tanjung Morawa toll road.

The toll road project is considered to increase the connectivity of tourist destinations, including access from Medan to the Lake Toba National Strategic Tourism Area.

The toll road will consist of six sections, namely section one Tebing Tinggi – Inderapura (20.4 km), section two Inderapura – Kuala Tanjung (15.6 km), section three Tebing Tinggi – Serbelawan (30 km).

Then, section four Pemelawan – Pematang Siantar (28 km), section five Pematang Siantar – Seribudolok (22.3 km), and section six Seribudolok – Parapat (16.7 km).

The toll road will have seven interchanges in Inderapura, Tebing Tinggi, Serbelawan, Pematang Siantar, Seribudolok, Parapat, and Simpang Susun Raya.

Minister of Public Works and Public Housing Basuki Hadimuljono said the construction of the project could increase accessibility to Lake Toba, so that tourists have many choices of transportation routes, ranging from air, sea, and land transportation modes.


Written by Staff Editor, Email:

Pefindo: Corporate Bond Issuances Could Reach US$9B This Year

Indonesia' finance ministry officially issued a retail saving bond retail series SBR007 on Thursday (07/11) with indicative targets Rp2 trillion (US$ 140.84 million) - Photo: Privacy.

Jakarta (TheInsiderStories) – PT Pemeringkat Efek Indonesia (Pefindo) expect bond issuances until the end of this year could reach Rp130 trillion (US$9.15 billion). In the first half (1H) of 2019, the value worth of Rp80 trillion, said the management on Thursday (08/15).

So far, said SVP of Financial Institution Ratings at Pefindo, Hendro Utomo, the company had pocketed the corporate bond mandate of Rp48.69 trillion. Most of the issuance came from the new Sustainable Public Offering (SPO) of Rp13 trillion and the remaining from the last year’ SPO worth of Rp8.8 trillion.

In terms of the industrial sector, the issuer of the corporate bonds mostly came from the banking sector of Rp15.9 trillion then followed by the financing sector as much as Rp14.37 trillion, and pulp and paper around Rp8.2 trillion.

According to Fikri Permana, an economist from Pefindo, the challenge for the company in Indonesia in issuing bonds in the 1H was political risks. He noted bond issuances until July 2019 dropped from Rp92.0 trillion to Rp79.9 trillion.

However, his optimistic that the downward trend in the central bank benchmark rate will able to drive the number of bond issuances going higher in the 2H-2019. He stated, “Its hoped that until the end of the year the issuance of debt securities can reach Rp120 trillion to Rp130 trillion,” he said.

On the other hand, Indonesian government and state-owned enterprises (SOEs) has potential to issue bonds around Rp100 trillion in the second quarter (2Q) of 2019. Most of the amount will in government bond while six SOEs has reported to Indonesia Stock Exchange (IDX) to release bond around Rp13 trillion.

The six issuer’ bond issuance as follows PT PP Tbk (IDX: PTPP) Rp1.5 trillion, PT Semen Indonesia Tbk (IDX: SMGR) Rp4.9 trillion, PT Waskita Karya Tbk (IDX: WSKT) Rp1.84 trillion, PT Adhi Karya Tbk (IDX: ADHI) Rp2 trillion, PT Waskita Beton Precast Tbk (IDX: WSPB) Rp500 billion, and PT Kimia FarmaTbk (IDX: KAEF) Rp1.5 trillion.

The government estimated will issue a total gross State bond of 50-60 percent throughout the 1H of 2019, which includes retail government bond, foreign exchange government bond and regular government bond instruments. The total issuance value is around Rp128 trillion.

Finance ministry recorded the realization of the net government bonds issuance in the 1Q of 2019 reached Rp185 trillion and SUKUK issuance worth of Rp81.44 trillion. Totally, the bonds issuance value reached Rp266.44 trillion.

The directorate of general of financing and risk management at the ministry of finance stated that the total gross bonds reached Rp330.1 trillion in 1Q 2019. This value 39.98 percent of the bond issuances target throughout 2019 with the total amount Rp825.7 trillion.

US$1: Rp14,200

Written by Staff Editor, Email:

Two Industrial Bank of Korea’s unit in Indonesia Will Merge Soon

Headquarter of Industrial Bank of Korea - Photo y the Company

JAKARTA (TheInsiderStories) – The realization merger between two banks belonging to the Industrial Bank of Korea (IBK) will will happen in the next few days. The bank will merge PT Bank Agris Tbk (IDX: AGRS) and PT Bank Mitra Niaga Tbk (IDX: NAGA).

Based on the disclosure information released on Thursday (08/15), it said every one NAGA share will be converted to 1,137 AGRS shares on August 22. After getting approval from the Ministry of Law and Human Rights, which is scheduled to be accepted on August 22, Bank Mitra Niaga will delisting from the bourse on August 23.

On February, 2018, IBK obtained 4.59 million shares or 87.34 per cent of Bank Agris fully paid capital from the seller PT Dian Intan Perkasa (owned 82.59 percent shares), Benjamin Jiavaranon has 0.28 per cent, and public 17.13 percent.

The bank, which is majority owned by the South Korean Government, has also acquired 71.68 percent of Bank Mitraniaga’ shares of 1.15 billion shares by Willy Yonathan and 10 million shares of Yeo Harry Yonantha. After the acquisition transaction, the composition of Bank Mitraniaga’s shareholders will change.

IBK will control Bank Mitraniaga with a share ownership of 71.68 percent, PT Sarana Steel remains 9.89 percent and Kamtono Kosasih remains 5.105 percent, Yonathan is only 1 percent and public shareholding is 12.32 percent.

This merger is a consolidation effort that is being pushed by the agency cause, currently the banking industry competition has expanded, to the financial technology industry. The existence of increasingly fierce competition will endanger small banks in business groups Book 1 and 2.

The Industrial Bank of Korea’ business plan in Indonesia is the financing of micro, small and medium enterprises. As of July 2019, IBK hold 95.79 percent of Bank Agris shares and owned 71.68 percent of NAGA shares.

Recently, Indonesia’ Financial Services Authority (FSA) aimed to relax single presence policy (SPP) to accelerate the bank consolidation, said the official on Thursday (08/01). The revision its expecting release in this year and will make no distinction between foreign and local lenders.

Heru Kristiyana, commissioner for banking supervision at the agency said, the revision rule could facilitate foreign banks invest in a local entity, as it tries to strengthen the sector against growing competition from financial technology firms.

He continued, with the new policy investor have a chance to own a controlling stake in a smaller lender that has less than Rp5 trillion (US$354.4 million) paid-up capital, adding there would be equal treatment for foreign and local banks.

“Foreign banks are still interested in coming to Indonesia because the net interest margin is still high at around 5 percent,” he told media.

The single presence policy was introduced in 2006 as a way to push consolidation among the 2,000 or so local banks. However, it proved unpopular with some of the foreign lenders seeking to expand their operations in Indonesia.

A bigger deterrent came in 2012 when regulators restricted foreign holdings in local lenders to 40 percent, prompting DBS Group Holdings Ltd. to abandon an attempt to take over publicly listed PT Bank Danamon Indonesia Tbk (IDX: BDMN) the following year.

Since then, Indonesia has relaxed the 40 percent rule, clearing the way for Japan’ Mitsubishi UFJ Financial Group Inc. to take control of Danamon earlier this year and for Sumitomo Mitsui Financial Group Inc. to buy PT Bank Tabungan Pensiunan Nasional Tbk (IDX: BTPN).

Kristiyana explained that the entry of technology firms into the financial industry requires a more nimble banking sector in Indonesia. He stated, “With the development of FinTech and banking digitalization, banks are required to be efficient so they can compete. You must consolidate if you can’t compete.”

Removing the single presence rule could make it easier for Standard Chartered Plc., to hang on to its 45 percent stake in PT Bank Permata Tbk (IDX: BNLI), according to Suria Dharma, an analyst at Samuel Sekuritas. The London-based bank said in 2016 it was considering merging its local branch network with Permata in order to move to a single presence, before indicating earlier this year it may sell out of Permata.

Indonesian lender PT Bank Mandiri Tbk (IDX: BMRI) has been in discussions to purchase the Permata stake, and has hired Morgan Stanley to advise on the potential deal, people familiar with the matter said earlier this year.

Kristiyana said the single presence rule may still apply if a large bank seeks to take a stake in another size-able lender. A large bank acquiring a smaller rival would be allowed to retain it as a separate entity, he added, without specifying the threshold for a merger requirement.

Indonesia has 115 conventional and Shariah banks and almost 1,800 rural lenders, catering to the archipelago’s more than 260 million people, data from the regulator showed.

Even as the single presence policy is relaxed, foreign banks looking to acquire Indonesian lenders should still demonstrate a commitment to lending to infrastructure and small and medium-sized enterprises, and appoint Indonesian residents as president director and president commissioner, the two most senior corporate roles, Kristiyana said.

Written by Staff Editor, Email:

Morning Briefing: Widodo will Announce 2020′ State Budget, New Capital City

President Republic of Indonesia Joko Widodo will deliver his speech today at the Parliament - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesian President Joko Widodo will deliver his speech on the country direction in 2020 at the People’s Consultative Assembly and House of Representatives. As he promised, the Indonesian leader also will announce the new capital city of the country.

Last month, the government and parliament has set the macro assumption indicator for the 2020 State Budget. For 2020, the economic growth set in the range 5.2 to 5.5 percent, inflation at three percent with one percent deviation, and three months letter of the state treasury at 5 percent to 5.6 percent.

Then, Rupiah against US dollar is set at Rp14,000-15,000, Indonesia Crude Price in the range of $60 – $70 per barrel, oil lifting 695,000 to 840,000 barrels per day also the gas lifting is estimated at 1.19 million to 1.3 million barrels of oil equivalent per day.

Indonesia’ external debt rose 10 percent in the second quarter (Q2) of 2019 compared to same period in 2018, primarily due to withdrawal of external debt and the strengthening of Rupiah against US dollar.

Bank Indonesia (BI) said, the rising of total external debt mainly driven by government external debt, amid slower growth of private external debt. The country’s total debt recorded US$391.8 billion in the 2Q 0f 2019, consisted of government and central bank debt of $195.5 billion, as well as private debt (including state-owned enterprises) amounted to $196.3 billion.

On Thursday, Indonesian Rupiah weakened 0.20 percent to 14,274 per US dollar and in the middle rate of BI, the local currency weakened 0.44 percent to 14,296. While, the Jakarta Composite Index slightly dropped to 6,257.59 compared to prior day.

The weakening on the financial market, according to some observer, was influenced by the fears of slowing global economic growth, especially in the European region. Five countries are projected to be in recession due to a trade war that led to a currency war are Britain, Germany, Italy, Mexico and Brazil.

In addition, US bond yields continued to decline while domestically  July trade balance deficit $63.5 million was better than analyst projections. For today, they said, Rupiah has the potential to strengthen in the range 14,213 to 14,306 against the US dollar.

US government bond yield curve slipped below the 2 percent level, suggesting investors expect gloomy prospects for its economy. China pledged to launch countermeasures if the White House carries out its recent plan to impose 10 percent tariffs on an additional $300 billion of Chinese imports.

U.S.-initiated trade offensives against its major trade partners have weighed heavily on the export-oriented German economy as well as that of the European Union as a whole. Germany’ gross domestic product (GDP) shrank by 0.1 percent from April to June from the previous quarter.

While, US’ Retail sales data for July rose 0.7 percent last month. Sales rose an even stronger 0.9 percent if auto dealers and gasoline stations are omitted.

On Friday, the composite index is estimating move in the range 6,123 to 6,372. The stocks to be watch are PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Central Asia Tbk (IDX: BBCA), PT Astra International Tbk (IDX: ASII), PT Jasa Marga Tbk (IDX: JSMR), PT Telkom Indonesia Tbk (IDX: TLKM), PT HM Sampoerna Tbk (IDX: HSMP), PT Wijaya Karya Tbk (IDX: WIKA), PT PP Tbk (IDX: PTPP), and PT Adhi Karya Tbk (IDX: ADHI).

May you have a profitable day!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia

China Pledges Countermeasures in Response to US Tariff Hikes

United States and China trade talks making the most significant progress - Photo: Special

JAKARTA (TheInsiderStories) – China announced that it would be forced to take necessary countermeasures if United States (US) moves forward with tariffs set to take effect Sept. 1, continuing the back-and-forth escalation of the trade war even as the conflict elevates fears of a global economic slowdown.

“China has to take necessary countermeasures in response to the US announcement of imposing additional 10 percent tariffs on 300 billion US dollars of Chinese imports”, an official with the Customs Tariff Commission of the State Council said Thursday (08/15).

Earlier this week, in a rare moment of easing, US President Donald Trump announced that tariffs on certain consumer goods would be postponed until mid-December to spare consumers and companies some of the added costs during the holiday shopping season.

It marked Trump’s first public acknowledgment that Americans shoulder the burden from his tariffs, although in tweets the President also said the move “actually helps China more than us” and claimed China would reciprocate.

“Good things were stated on the call with China the other day. They are eating the Tariffs with the devaluation of their currency and “pouring” money into their system. The American consumer is fine with or without the September date, but much good will come from the short deferral to December,” the President tweeted.

“It actually helps China more than the US but will be reciprocated. Millions of jobs are being lost in China to other non-Tariffed countries. Thousands of companies are leaving. Of course, China wants to make a deal. Let them work humanely with Hong Kong first,” he adds.

But the Chinese response Thursday showed that Beijing was not appeased by the delay.

“The move by the US seriously violated the consensus reached between the two heads of state in Argentina and Osaka, and deviates from the right track of resolving differences through consultation,” the Customs Tariff Commission of the State Council said in a statement. “China will have to take necessary countermeasures.”

Markets around the world slumped after China’s announcement. In the US, stocks vacillated between gains and losses, with the Dow Jones industrial average rising about 100 points, or .4 percent, by the closing bell, AP reported.

Chinese officials offered no further details as to what form countermeasures might take, or whether their trade negotiators would still be coming to the US to continue talks in September.

But the message shows China is prepared to dig its heels in, even as it grapples with political protests in Hong Kong and a raft of disappointing economic data. Earlier this week, China reported levels of high unemployment, as factory output fell to a 17-year low, showing the breadth of the nation’s economic slowdown.

In the US, similar omens are looming. For the first time since the run-up to the Great Recession, the yields — or returns — on short-term US bonds eclipsed those of long-term bonds. This phenomenon, which suggests investor faith in the economy is faltering, has preceded every recession in the past 50 years.

The panic caused the Dow Jones industrial average to shed about 800 points Wednesday, in its biggest single-day drop of 2019. Stocks bounced around most of Thursday, a reflection of investor uncertainty over the competing issues of China trade, the global bond market, and an expanding US economy.

By the end of the day, there was not that much change from when the session started. There was some help from a robust report on July retail sales from the Commerce Department. The Labor Department also reported that US productivity rose 2.3 percent in the second quarter.

The Dow and Standard & Poor’s 500 indexes both settled slightly to the upside but far from clawing back Wednesday’s losses. Shares of retail giant Walmart spearheaded the blue chips, rising 6.11 percent on a better-than-expected earnings report. The S&P finished up the day at 2,847, a gain of 7 points or 0.25 percent. The Nasdaq composite was the only down-note, but it was still close to break-even at 7,766, a 7-point loss.

“Walmart, a great indicator as to how the US is doing, just released outstanding numbers. Our Country, unlike others, is doing great! Don’t let the Fake News convince you otherwise,” he said.

Signs of the trade war’s toll are surfacing not just in the US and China but all over the globe. Central bank leaders in Europe, Asia, and Australia have announced interest rate cuts in recent weeks, attributing the need for economic stimulus to the fallout from the trade war.

And on Wednesday, Germany announced that its export-driven economy had shrunk .1 percent between April and June, and officials blamed the drop-off on the fallout from the trade war and the looming threat of a hard Brexit by Britain. With another contraction this quarter, Germany would officially be in a recession.

Written by Lexy Nantu, Email:

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