JAKARTA (TheInsiderStories) - Three state-controlled banks and eight state owned enterprises (SOEs) have signed hedging facilities worth $1.92 billion on May 25 to avoid foreign exchange (FX) losses in their businesses. The signing ceremony between the SOEs was witnesses by Governor of Bank Indonesia (BI) Agus Martowardojo and Minister of SOEs Rini Soemarno.
In the facilities, portion of PT Bank Rakyat Indonesia Tbk (IDX: BBRI) was at $750 million, PT Bank Negara Indonesia Tbk (IDX: BBNI) $619 million and PT Bank Mandiri Tbk (IDX: BMRI) at $555 million.
The eight companies that have secured the hedging facilities are PT Aneka Tambang Tbk (IDX: ANTM), PT Perusahaan Gas Negara Tbk (IDX: PGAS), PT Pupuk Indonesia, PT Pelabuhan Indonesia (Pelindo) II, PT Pelindo III, PT Semen Baturaja Tbk (IDX: SMBR) and Perum Badan Urusan Logistik.
“Hedging facility provides certainty calculation of cash flow and could calculate our profit management and can avoid the risk of default,” said Agus at the signing of hedging facilities with eight SOEs and three SOEs bank.
He added, if all the stakeholders commit to reform their policies, Indonesian gross domestic products (GDP) could reach $4,000 trillion by 2030 from now around $1 trillion. Meanwhile, Rini hopes that the SOEs manage their management risk to avoid the FX losses at their business and make their business becoming healthier.
Early this month, BI together with Financial Service Agency (OJK) and Finance Ministry explore various instruments to develop money market more attractive. The three parties explore to develop derivative transactions such as promissory notes, reverse repo transaction and sharia product.
“With this agreement we hope the financial markets become deeper, more investors will come, more instruments are available and could be harmonized with the regulations, which is important to educate wider community so that our financial markets become more efficient,” he stated.
Muliaman Hadad, the Chairman of OJK added, the agency also is seeking to create protected mutual funds based on infrastructure projects. While, Finance Minister Bambang Brodjonegoro added that the government has released regulation to drive the real estate investment funds (REITS) market in the country as part of efforts to attract investor investment.
“The point we want to multiply the securities that can be traded, reflecting the structure to longer terms, so that all necessary short term to long term could be filled. These products will be created in cooperation with BI and carry tenors of 1,2,3-years,” Muliaman said.
This month, BI together with Financial Service Agency (OJK) and Finance Ministry explores various instruments to develop money market more attractive for investors. The three parties explore to develop derivative transactions like promissory notes, reverse repo transaction and sharia product. (*)