JCI Dips on Rival Pols? Claims to House
Jakarta. Stocks in Jakarta declined on Thursday, with traders citing concerns over rival claims to leadership of Indonesia?s House of Representatives.
Other Southeast Asian stock markets mostly rose after the US Federal Reserve, as long-expected, ended its massive quantitative easing program.
The Jakarta Composite Index lost 0.3 percent to close at 5,058.85 on Thursday after the Indonesia Stock Exchange gained 1.5 percent in the previous session. Traders say a vote on House commission leaders weighed on sentiment.
About 4.72 billion shares worth Rp 7.87 trillion ($649.5 million) changed hands on the day. Stocks that declined beat stocks that gained by 169 to 120.
Foreign investors, which accounted for about 66 percent of Thursday?s transactions, actually bought Rp 255.1 billion more shares than they sold.
However, local investors were concerned about the political situation unfolding the House, and the index could not sustain its half-day gain.
Analysts and investors are concerned the Awesome Indonesia coalition that supports president Joko Widodo, but which holds a minority of seats in the House, is destabilizing the country?s political situation by naming its own speaker and deputies as house leaders without legal sanction.
On Wednesday the Awesome Indonesia coalition moved for a no-confidence vote against the House leadership, which is controlled by the majority Red-White coalition that backs losing presidential candidate Prabowo Subianto.
?This is a negative and unprecedented for Indonesia, creating messiness within the House and political uncertainty for the country,? Bahana Securities said in a note.
Bucking the market trend, shares of Indonesian palm oil companies gained on an expected increase in palm oil prices and strong earnings, traders said.
Shares of Astra Agro Lestari, which issued its third quarter results on Thursday, rose as much as 8.2 percent.
The plantation arm of Astra International said its profits more than doubled in the first nine months of the year due to higher palm oil prices.
In an investor memo submitted to the Indonesia Stock Exchange on Thursday, Astra Argo said its net income rose to Rp 1.88 trillion ($157 million) in the January-September period from Rp 910 billion in the same period in 2013. The company?s average selling price rose 24 percent to Rp 8,474 per kilogram.
Revenue at Astra Agro jumped 41 percent to Rp 11.76 trillion.
London Sumatra Indonesia?s share price was up 4.8 percent and Salim Ivomas Pratama gained 4.7 percent.
On Thursday, an index that traces 20 agricultural-related stocks increased by 3.37 percent.
However, more stocks declined. An index that tracks stock prices of 64 companies in basic industry and chemical-related businesses declined by 1.15 percent.
An index that monitors the share price of 37 consumer goods companies declined by 0.91 percent.
Shares of state-controlled Semen Indonesia, the country?s biggest cement manufacturer, fell 2.03 percent to Rp 15,700.
The cement producer, which also announced its earning results, actually posted a higher profit in the January-September period amid strong demand.
Its net income rose 4.7 percent to Rp 4.1 trillion in the nine-month period, compared to Rp 3.9 trillion in the same period in 2013, according to a statement on Thursday. Its revenue increased by 11 percent to Rp 19.4 trillion.
An index that tracks 83 finance-related stocks declined by 0.57 percent.
The share price of Bank Central Asia, the biggest private lender in the country, declined by 2.8 percent despite posting a healthy profit.
The US Federal Reserve on Wednesday ended its program that purchased vast sums of government bonds ? and at its peak pumped $85 billion per month into the financial system. The move signalled confidence the US economic recovery would remain on track despite signs of a slowdown in many parts of the global economy.
Most emerging Asian currencies slid on Thursday as the Federal Reserve struck a more hawkish tone than expected.
The rupiah eased and closed at Rp 12,125 against the greenback.
Jakarta Globe, Reuters
BCA, BNI Post Healthy Profits
Two of Indonesia?s biggest lenders by assets posted healthy profit growth in the first nine months of this year, thanks to strong growth in their operational income.
Net income at Bank Central Asia, the second-biggest lender in the country, rose 17.7 percent to Rp 12.2 trillion ($1 billion), compared to the same period last year.
The lender booked Rp 23.6 trillion in net interest income in the nine-month period, up 23.4 percent from the previous year, while its non-interest income climbed 21 percent to Rp 6.5 trillion.
BCA?s net interest margin rose to 6.5 percent in September, from 6 percent in the previous year.
The bank?s total outstanding loans grew 10.6 percent to Rp 330.7 trillion, thanks to strong loan growth to corporate consumers. Its third-party funds ? which consist of time deposits, current accounts and savings ? rose 7.9 percent to Rp 432 trillion.
Meanwhile, state-owned Bank Negara Indonesia (BNI) ? the country?s fourth-biggest lender by assets ? posted Rp 7.61 trillion in net profit, up 16.4 percent from last year.
Operational income grew 13 percent to Rp 23.68 trillion, bolstered by a net interest income that grew 18.6 percent growth to Rp 16.4 trillion. Its non-interest income rose 2 percent to Rp 7.29 trillion.
Total outstanding loans at the state-controlled lender climbed 14.1 percent to Rp 267.9 trillion. BNI?s third-party funds saw a 11.9 percent growth to Rp 308.3 trillion.
?We maintained the quality of the third-party funds by focusing on accumulating cheap funds in the form of current-account saving-account [CASA] in the third quarter, which made up 62 percent of the third-party funds,? Gatot M Suwondo, president director of BNI, told reporters in Jakarta on Thursday.
CASA offers lower deposit rates compared to time deposits.
Despite the rosy financial reports, both banks remarked that lending growth in Indonesia is forecast to slow or even stagnate in the next year, as tight liquidity conditions remain the biggest challenge.
?We?re not that too hopeful that there will a big growth in lending next year,? Jahja Setiaadmaja, BCA?s president director told reporters in Jakarta on Thursday.
Indonesian lenders began raising their deposit rates in a neck-and-neck race to attract depositors and raise funding earlier this year ? sparking the so-called interest rate war ? before the Financial Services Authority (OJK) intervened by placing a cap on deposit rates for major players last month.
BNI?s Gatot said the new presidential administration may also contribute to the slower lending as corporations may adopt a ?wait and see? stance toward promised reforms that may vary in implementation.
BSD City?s Aeon Mall Set to Open by May
Jakarta. Next year will be a big year for Sinar Mas Land, a holding company for property businesses of Sinar Mas group, as the first Aeon mall and a large convention and exhibition center, which are currently being developed, will kickstart their commercial operations.
A source from AMSL Indonesia, a joint venture between Aeon and Sinar Mas Land , said Aeon?s first mall will be opened in BSD City, Sinar Mas Land?s signature township in Tangerang, Banten, in May next year.
Aeon is Japan?s largest shopping mall developer and operator, and Sinar Mas Land is a Singapore-listed holding company that controls Bumi Serpong Damai, a Jakarta-listed property developer that owns BSD City, a Jakarta satellite city that encompasses a total area of around 6,000 hectares.
?Construction progress has now reached 55 percent and by May next year, we expect construction to be complete and the first Aeon mall in Indonesia will be opened commercially,? said the source who spoke on the condition of anonymity.
In March last year, Sinar Mas Land announced it had signed a deal with Aeon to build 20 shopping malls in Indonesia over the next eight years.
The first Aeon mall, which will be called Aeon Mall BSD, was estimated to cost $150 million to $200 million, including land and construction costs, according to Ishak Chandra, a director at Sinar Mas Land in March last year.
The source said, the mall will offer ?very Japanese? features like Aeon malls in Japan, from the choice of its tenants, merchandisers to the mall designing itself.
According to plans, Aeon Mall BSD will span 125,000 square meters.
Aeon, which operates 120 malls in Japan, has announced its strategy to shift growth development into Asian markets and the group is actively pursuing consumers in China and Southeast Asia.
Indonesia has been attracting large retailers, thanks to its rising middle-income class, which is expected to continue growing.
Ikea, an international home-furnishing retailer and Courts Asia, a Singapore-based furniture and electronics retailer have opened their first outlets in Indonesia.
Also in BSD City, will be the country?s biggest convention center, called the Indonesia Convention Exhibition (ICE), which will cover an area of 50,000 square meters of indoor space and another 50,000 square meters of outdoor space.
Sinar Mas Land has inked a deal with Dyandra Media International, a unit of the Kompas Gramedia conglomerate, to build the ICE, through the Indonesia International Expo joint venture.
IIE has signed a contract with Hannover Fairs International, a subsidiary of a leading German exhibitor Deutsche Messe, to be the official operator of the ICE.
The ICE will host a Micheal Buble concert, and is rumored to be the future host of the Indonesia International Motor Show.
As Young Fans Enjoy World Series, Magazine Ads Link Baseball and Smokeless To...
For millions of fans of all ages, October means the excitement of the baseball playoffs and World Series.
For tobacco companies, it means another opportunity to target kids by associating smokeless tobacco with baseball and other sports.
This month’s issues of the two leading sports magazines, Sports Illustrated and ESPN, have included huge, two-page advertising spreads for Grizzly, which is by far the most popular smokeless tobacco brand among youth ages 12-17. Grizzly is made by American Snuff Company, a subsidiary of tobacco giant Reynolds American.
WHO Conference Recommends Nations Increase Tobacco Taxes To Save Lives
Meeting in Moscow on implementing the world’s first public health treaty, the World Health Organization Framework Convention on Tobacco Control, country delegates from around the world have unanimously recommended that parties to the treaty increase tobacco taxes to reduce tobacco use and save lives.
The 179 parties to the treaty are legally obligated to raise taxes on tobacco products to reduce tobacco consumption. The guidelines unanimously adopted this week will help parties meet this obligation.
Studies and experience from around the world show that making tobacco products more expensive by raising taxes is the most effective way to reduce tobacco use, especially among vulnerable populations such as youth, pregnant women and low-income tobacco users. Tobacco taxes are also an effective way for governments to generate revenue.
New Report: Graphic Cigarette Warnings Spread Around World
The number of countries requiring graphic health warnings on cigarette packs is growing rapidly, according to a report issued today by the Canadian Cancer Society.
The report finds that 77 countries and territories have finalized picture warnings — up from 55 countries that had implemented by the end of 2012 and just one country — Canada — in 2001.
RI, Rwanda vow to strengthen diplomatic and trade ties
Rwandan president Paul Kagame met with Vice President Jusuf Kalla on Friday, discussing various issues related to trade, investment, cultural exchange and conflict resolution to strengthen bilateral ties between Indonesia and Rwanda.
Chevron meets VP, asks for support in case
Representatives of oil firm PT Chevron Pacific Indonesia (CPI), part of US giant Chevron, met with Vice President Jusuf Kalla on Friday, asking for the government's support in its bioremediation case.
Indonesia inks oil deal with Angola
President Joko ?Jokowi? Widodo has signed a Memorandum of Understanding (MoU) forging an energy deal with the African nation of Angola.