Cooling demand, lower exports ‘will hit Indonesia’s growth’

[CityFarmer]

The time is running out for India and Indonesia's central banks to action, and act fast...

Fitch warns India, Indonesia of downgrades if confidence falls further

LONDON – India and Indonesia could see their credit ratings lowered if their governments fail to halt the current slump in investor confidence towards the countries, Fitch ratings said on Thursday.

Fitch currently rates both India and Indonesia BBB- with a stable outlook but the recent sell-off in emerging markets, sparked by worries of a scaling back of cheap US financial stimulus, has raised the pressure on the countries.

http://www.todayonline.com/business/fitc...ls-further

[AlphaQuant]

and in the meantime, Indonesia has spent 13.6% of its FX reserves...

http://www.ft.com/cms/s/0/fe21614a-0afe-...z2cmWe8uZ5

[CityFarmer]

President Yudhoyono in action ...

Indonesia unveils new steps to boost economy

JAKARTA — Indonesia yesterday announced fresh measures to boost investment in labour-intensive industries and reduce imports, seeking to revive confidence and consumer spending in South-east Asia’s largest economy.

The intervention by President Susilo Bambang Yudhoyono comes after a punishing week for emerging markets, which were hit hard by fears of higher global borrowing costs and a reduction of cheap funds from the United States.

The Indonesian government will provide tax relief to companies that employ a lot of workers, including garment and toy makers that export at least 30 per cent of their output, Economic Minister Hatta Rajasa said at a news conference after a Cabinet meeting chaired by Mr Yudhoyono. Details will be announced at a later date.

To address a widening current account deficit, the government will phase out a luxury tax imposed on certain products made locally to cut imports. On the other hand, the government will increase taxes on imported, completely built-up cars and luxury goods to between 125 and 150 per cent from an average 75 per cent now, Mr Rajasa said.

The government will open more domestic industries to foreign investment and speed up investment licensing, he said.

Meanwhile, the quota imposed on raw mineral exports will be “temporarily” scrapped. Consumption of biodiesel will be boosted to reduce reliance on crude-based fuels, which Indonesia mostly imports, said Mr Rajasa.

http://www.todayonline.com/business/indo...st-economy

[Greenrookie]

President Yudhoyono in action ...

[b]Indonesia unveils new steps to boost economy[/

Meanwhile, the quota imposed on raw mineral exports will be “temporarily” scrapped. Consumption of biodiesel will be boosted to reduce reliance on crude-based fuels, which Indonesia mostly imports, said Mr Rajasa.

http://www.todayonline.com/business/indo...st-economy

Hmm palm plantations employ a lot of ppl, and definitely more than 30percent for export for golden Agri, then also incrwase biofuel consumption. Seem like the worst is over for golden Agri with crude oil supported at such level due to Egypt chaos.. Vested at golden Agri, but for Indonesia govt, say no use, must implemented.

[a74henry]

Raw minerals should get cheaper without this tax. Opportunity for companies with biodiesel experience and companies to assemble cars in Indonesia.

[KopiKat]

Once-Hot Indonesia Loses Allure as Prices Chill Buyouts
Bloomberg 4 Sep 13

Some extracts,

Indonesia has lost much of its allure for private equity as steep valuations restrain buyouts in a country that two years ago was, in the words of one investor, “probably the sexiest destination in the emerging markets.”

International private-equity firms have acquired stakes in four Indonesian companies this year, down from 10 in 2011 and seven last year, according to data compiled by Bloomberg and the Asian Venture Capital Journal. Total transaction values fell from $649 million for the nine deals in 2011 where terms were disclosed to $324 million for the six deals last year for which prices were available, the data show.
Even after its 20 percent decline from its all-time high on May 20, the Jakarta Composite Index (JCI) has surged 79 percent over the past four years, compared with a 12 percent increase in the MSCI Emerging Markets Index.
.
The companies in the Jakarta index are trading at 17 times earnings, compared with 11 times earnings for companies in the MSCI Emerging Markets Index, according to data compiled by Bloomberg.
.
In addition to valuations, deal making is being chilled by shifting government regulations, which complicate market assumptions for acquirers, and competition from strategic buyers.
.

[CityFarmer]

A weaker currency helps...

Indonesia sees first trade surplus in 5 months

JAKARTA – Indonesia recorded a surprise trade surplus for August, its first in five months, offering some relief to the ailing rupiah, but the country’s current account deficit will likely keep weighing on Asia’s weakest currency this year.

Southeast Asia’s largest economy had a trade surplus of US$130 million (S$163 million) in August, compared with a record US$2.3 billion deficit the previous month.

A Reuters poll had expected an August deficit of US$890 million. Only one participant, Bank of America Merrill Lynch, had forecast a surplus.

“The trade surplus will give comfort to the current account deficit problem,” said Mr Aldian Taloputra, senior economist with Mandiri Sekuritas.

The rupiah edged higher after the trade data, touching an intraday high of 11,530 to the dollar compared with 11,540 just before the announcement.
...
http://www.todayonline.com/business/indo...s-5-months

[CityFarmer]

Indonesia trade account is improving...

Indonesia surprises with a sizable Nov trade surplus

JAKARTA – Indonesia reported a surprisingly large trade surplus for November, while inflation was steady last month, which could give the central bank room to keep its benchmark rate unchanged next week.

Data from the statistics bureau showed a trade surplus of US$780 million (S$988 million) in November, compared with a projected US$70 million deficit in a Reuters poll.

November’s exports fell 2.4 per cent on an annual basis, but imports dropped 10.55 per cent as demand was subdued, apparently in part because the weak rupiah has raised import costs.
...
http://www.todayonline.com/business/indo...de-surplus