BCAS Vista 13 Jan-20

Hourly salary will be applied on services industry

Hourly wage and salary, as regulated in omnibus law, will only be applied for particular profession, particularly in the services sector, such as lawyer and notary. Note that, the minister of manpower, Ida Fauziah, stated that the regulation on hourly salary will not affect the minimum wage regulation in the omnibus law. (Bisnis Indonesia)

2020 Village Fund disbursement change of scheme

The government through 2019 Finance Ministerial Regulation (PMK) no. 205 has made a revision regarding to village fund management to be implemented starting Jan-20, which includes:

•   2020 village fund disbursement scheme will be conducted through Phase I (40%) the earliest in January and the latest in June, Phase II (40%) with the earliest in May and the latest in the 4th week of August, and Phase III (20%) with the earliest in June. Note that the previous scheme’s proportion was Phase I (20%), Phase II (40%), and Phase III (40%).

•   The formula adjustment for Village Fund allocation

•   Adjustment on the document requirement for each phases

Also to note that, allocation for 2020 village fund reached IDR72tn from 2019’s realization at IDR70tn.

(Kontan)

Several miners halted production

Indonesia Nickel Miners Association (APNI) stated that many nickel miners have decided to halt their mining operations given the subdued price coupled with the implementation of nickel ore export. Additionally, they also mentioned that several nickel mines have closed down their company due to the increase of royalties. The association is expecting that the government to implement and decide the reference nickel price (HPM) in order to get more clarity on pricing, and in return revive the mining operations. (Bisnis Indonesia)

Comments: The new higher royalty will minimally impact nickel miners under our coverage (please read our “Pushing for downstream” report). The new royalty cost will raise ANTM’s cost by around 1%. While a more positive impact on INCO as they export only nickel matte, where royalties are halved.

Tanjung Emas & Kendal seek for IDR9tn investment

The development of Tanjung Emas and Kendal Seaport, Central Java, are expected to reach IDR9tn (regulated under President Regulation (Perpres) No.79/2019). IDR2tn will be spent for the optimalization of Tanjung Emas which includes an upgrade to the port, will be carried out by Pelindo III. While IDR7tn will be allocated for the development of Kendal Seaport, which will be likely funded from private sector. (Bisnis Indonesia) 

Indomobil Multi Jasa (IMJS) secures USD175mn syndicated loan

IMJS have secured USD175mn syndicated loan with a maturity of 4 years through CSM Corporatama, its subsidiary that engages in car rental segment. The proceeds will be used for debt refinancing and working capital. IMJS is set to receive the syndicated loan from Bank of China, BNGA , CTBC Financial Holding, DBS Group, OCBC, SMF and Taishin Financial Holding Co. (Bisnis Indonesia)

Medco Energi Internasional (MEDC) to issue global bonds up to USD650mn

MEDC plans to issue global bonds up to USD650mn through its subsidiary, Medco Bell Pte Ltd. The total value will be finalized after the roadshow is completed on 16-17 Jan. The proceeds will be used to refinance their IDR bonds which will mature in 2021. The global bonds has received B1 rating from Moody’s Investors Service. The underwriters are Morgan Stanley, Standard Chartered Bank, Societe Generale, Credit Suisse, DBS Bank Ltd, and PT Mandiri Sekuritas. (Investor Daily)

Industrial Bank of Korea to inject IDR700bn to Bank IBK Indonesia (AGRS)

AGRS plans to increase its capital by issuing up to 8 mn of new shares through a right issue, translating to 52.95% of company’s paid in capital.  The right issue will receive the effective declaration on 11th Feb-20 and will be conducted during 25th Feb-20 – 4th Mar-20. In addition, Industrial Bank of Korea stated that the company is ready to absorb up to IDR700bn of the AGRS’ right issue. (Investor Daily)

Kereta Api Indonesia (KAI) and MRT Jakarta formed a Joint Venture (JV)

KAI has formed a JV with MRT Jakarta, Moda Integrasi Transportasi Jabodetabek, which will intergrate both companies' transportations. MRT Jakarta holds 51% ownership while PT KAI holds 49%. Transportation Ministry, Budi Karya Sumadi, stated that this JV will develop 72 stations, including airports and commuterline. KAI and MRT will allocate IDR80bn as an initial capital which IDR50bn will be used to organize 4 railway station in Jakarta, including Senen station, Tanah Abang station, Juanda station and Sudirman station.  (Investor Daily)

Wechat Pay received approval from Bank Indonesia

Bank Indonesia (BO)’s deputy governor, Sugeng, stated that BI has officially approved Wechat Pay's operations since 1st Jan-20, which will collaborate with Bank CIMB Niaga (BNGA).  In addition, BNGA’s director of consumer, Lani Darmawan, stated that the company’s collaboration with Wechat Pay is aimed for transaction in tourism area. (Kontan)