Monday, June 14, 2010
Bakrie Spin Off Infrastructure Unit Next Year
PT Bakrie & Brothers (BNBR.JK), the holding company for Indonesia's Bakrie family, said it plans to spin off its infrastructure unit with assets of $3 billion, in an initial public offering by early 2011.
Rajawali to list $1 billion plantation assets
Indonesian investment firm Rajawali Group plans to unlock over $1 billion worth of plantation assets through a market listing within a year, and then hunt for coal and gold mines in the country.
Rajawali, owned by Peter Sondakh, one of Indonesia's richest men, is famous among local investors for managing to unlock value by developing companies, and built up a $1.6 billion warchest from asset sales to expand in mining, plantations and property.
"Cash is king. If there are distressed assets we can jump in," Managing Director Darjoto Setyawan told Reuters in an interview on Friday, adding the firm was worried about the potential fallout from euro zone debt on credit liquidity.
The company plans to start planting its 200,000-hectare landbank with palm oil this year, for an investment of as much as $700 million. It has also bought 70,000 hectares in the planned Merauke food estate in Indonesia's eastern Papau province, in which it will invest $400 million to plant sugar.
Indonesia is the world's top producer of palm oil, largest thermal coal exporter, and Southeast Asia's biggest sugar buyer. "Indonesia is the biggest crude palm oil producer so the product is very strategic for us," said Setyawan, adding the company decided to invest in sugar due to high domestic demand.
It aims to list the plantation assets, which could be through an initial public offering or potentially a backdoor listing. It holds a majority stake in restaurant business Eatertainment (SMMT.JK), its only holding among listed Indonesian firms after it fully sold its stakes in cement maker PT Semen Gresik (SMGR.JK) and cigarette producer PT Bentoel International Investama (RMBA.JK) in the past year.
The company has appointed the country's largest lender PT Bank Mandiri (BMRI.JK) as its main bank to provide loans for the Papua food estate project.
GOLD, COAL AND RESORTS
The firm has secured a 35 percent stake in PT Tambang Batubara Bukit Asam's (PTBA.JK) Banko coal mine, because of its purchase of an 80 percent stake in a $1.3 billion railway project to transport coal from the mine in Sumatra island, he said.
Rajawali is now looking for further coal and gold assets, either as greenfield projects or through stakes in existing mines or listed firms. It is already the majority shareholder in UK-listed gold miner Archipelago (AR.L).
"We're also looking at more than 10 coal assets in Sumatra and Kalimantan," Setyawan said, as he sketched out calculations for the value of its Sumatran assets on a white board.
Apart from plantations and mining, the firm plans to buy a hotel in Morocco or Turkey to tap the European tourism market. It already owns hotels in Indonesia, Malaysia and Australia, and could spin off property assets with another IPO.
The moves to unlock value come as Sondakh, 58, plans to retire as CEO in two years, staying on as chairman to oversee Rajawali as a strategic holding firm for its listed businesses.
Setyawan, in an office filled with model airplanes, said the firm has no plans to take part in the planned IPOs of Indonesian flag carrier Garuda or state steel maker Krakatau Steel. Local stock market players often follow the lead of Rajawali, described as a "savvy investor" by CLSA in a recent report.
"Our business model is always to go for a greenfield project, develop it and then we can enjoy the harvest," Setyawan said. From Reuters, 11th June 2010.
Rajawali, owned by Peter Sondakh, one of Indonesia's richest men, is famous among local investors for managing to unlock value by developing companies, and built up a $1.6 billion warchest from asset sales to expand in mining, plantations and property.
"Cash is king. If there are distressed assets we can jump in," Managing Director Darjoto Setyawan told Reuters in an interview on Friday, adding the firm was worried about the potential fallout from euro zone debt on credit liquidity.
The company plans to start planting its 200,000-hectare landbank with palm oil this year, for an investment of as much as $700 million. It has also bought 70,000 hectares in the planned Merauke food estate in Indonesia's eastern Papau province, in which it will invest $400 million to plant sugar.
Indonesia is the world's top producer of palm oil, largest thermal coal exporter, and Southeast Asia's biggest sugar buyer. "Indonesia is the biggest crude palm oil producer so the product is very strategic for us," said Setyawan, adding the company decided to invest in sugar due to high domestic demand.
It aims to list the plantation assets, which could be through an initial public offering or potentially a backdoor listing. It holds a majority stake in restaurant business Eatertainment (SMMT.JK), its only holding among listed Indonesian firms after it fully sold its stakes in cement maker PT Semen Gresik (SMGR.JK) and cigarette producer PT Bentoel International Investama (RMBA.JK) in the past year.
The company has appointed the country's largest lender PT Bank Mandiri (BMRI.JK) as its main bank to provide loans for the Papua food estate project.
GOLD, COAL AND RESORTS
The firm has secured a 35 percent stake in PT Tambang Batubara Bukit Asam's (PTBA.JK) Banko coal mine, because of its purchase of an 80 percent stake in a $1.3 billion railway project to transport coal from the mine in Sumatra island, he said.
Rajawali is now looking for further coal and gold assets, either as greenfield projects or through stakes in existing mines or listed firms. It is already the majority shareholder in UK-listed gold miner Archipelago (AR.L).
"We're also looking at more than 10 coal assets in Sumatra and Kalimantan," Setyawan said, as he sketched out calculations for the value of its Sumatran assets on a white board.
Apart from plantations and mining, the firm plans to buy a hotel in Morocco or Turkey to tap the European tourism market. It already owns hotels in Indonesia, Malaysia and Australia, and could spin off property assets with another IPO.
The moves to unlock value come as Sondakh, 58, plans to retire as CEO in two years, staying on as chairman to oversee Rajawali as a strategic holding firm for its listed businesses.
Setyawan, in an office filled with model airplanes, said the firm has no plans to take part in the planned IPOs of Indonesian flag carrier Garuda or state steel maker Krakatau Steel. Local stock market players often follow the lead of Rajawali, described as a "savvy investor" by CLSA in a recent report.
"Our business model is always to go for a greenfield project, develop it and then we can enjoy the harvest," Setyawan said. From Reuters, 11th June 2010.
Tuesday, November 3, 2009
BANK RAKYAT INDONESIA POSTS STRONG GROWTH IN NET PROFIT IN JAN-SEPT
JAKARTA-
The net profit of Bank Rakyat Indonesia (BRI) (JSX:BBRI) shot up 25.1 per cent year-on-year to Rp5.3 trillion (US$570 million) in the first nine months of this year on strong growth of net interest income.
The state lender posted a 13.6 per cent rise in net interest income to Rp16.69 trillion thanks to a surge in credit expansion as against cost of fund of Rp9.05 trillion.
The bank posted a 26.9 per cent increase in outstanding credit by the end of the nine month period to Rp219.56 trillion.
A stronger increase of 96.14 per cent was recorded in fee based income and other operating income to Rp2.72 trillion, the newspaper Bisnis Indonesia reported.
BRI President Sofyan Basir said the bank posted an increase in net profit when its net interest margin was cut to 9.21 per cent from 10.61 per cent.
The net profit of Bank Rakyat Indonesia (BRI) (JSX:BBRI) shot up 25.1 per cent year-on-year to Rp5.3 trillion (US$570 million) in the first nine months of this year on strong growth of net interest income.
The state lender posted a 13.6 per cent rise in net interest income to Rp16.69 trillion thanks to a surge in credit expansion as against cost of fund of Rp9.05 trillion.
The bank posted a 26.9 per cent increase in outstanding credit by the end of the nine month period to Rp219.56 trillion.
A stronger increase of 96.14 per cent was recorded in fee based income and other operating income to Rp2.72 trillion, the newspaper Bisnis Indonesia reported.
BRI President Sofyan Basir said the bank posted an increase in net profit when its net interest margin was cut to 9.21 per cent from 10.61 per cent.
Friday, October 30, 2009
BANK RAKYAT INDONESIA HIKES ITS BOND VALUE TO US$321 MLN
JAKARTA-
PT Bank Rakyat Indonesia (BRI)(JSX:BBRI), a publicly traded lender, said it will raise the value of bonds it plans to issue to Rp3 trillion (US$321 million) from Rp2 trillion set earlier.
The state bank, however, is still awaiting a go ahead from the capital market watchdog Bapepam to issue the bond scheduled for next month or December.
BRI Director Abdul Salam said the improved condition of the market prompted the bank management to raise the value.
With the bond fund, BRI hoped to maintain a safe capital adequacy ratio at 15 per cent, Salam said.
In June BRI's CAR was 14 per cent and the level was believed to have declined with dividend paid to the government.
PT Bank Rakyat Indonesia (BRI)(JSX:BBRI), a publicly traded lender, said it will raise the value of bonds it plans to issue to Rp3 trillion (US$321 million) from Rp2 trillion set earlier.
The state bank, however, is still awaiting a go ahead from the capital market watchdog Bapepam to issue the bond scheduled for next month or December.
BRI Director Abdul Salam said the improved condition of the market prompted the bank management to raise the value.
With the bond fund, BRI hoped to maintain a safe capital adequacy ratio at 15 per cent, Salam said.
In June BRI's CAR was 14 per cent and the level was believed to have declined with dividend paid to the government.
Friday, October 23, 2009
Five Indonesian banks set to launch Islamic units
* BI says sharia units can become sharia banks in one month
* Revised law on VAT encouraging banks to set up sharia units
* Paper reports U.S. insurer looking at buying sharia bank
JAKARTA - Five Indonesian banks including Bank Central Asia (BBCA.JK), the No. 3 lender, expect to launch standalone sharia units next year, boosting the sharia market in the world's most populous Muslim nation, officials said.
Industry officials said the revised law on value added tax, which removed double taxation in the Islamic market, would encourage more banks to set up Islamic banking subsidiaries. The double taxation had made Islamic transactions more expensive than comparable conventional deals.
"We hope that it would be easier for us to expand business and seek strategic partners. We also hope to grow faster and attract investors from Middle East," said Barno Sudarwanto, head of planning and development at the sharia unit of Bank Negara Indonesia (BBNI.JK), the No. 4 bank, which will be spun off.
Others due to set up separate sharia banking units include mid-sized lenders Bank Panin (PNBN.JK), Bank Victoria (BVIC.JK) and unlisted Bank Jabar Banten.
Investor Daily newspaper on Friday reported that a U.S. insurance firm had met with central bank officials this week to discuss the possibility of buying an Islamic-compliant lender in Indonesia, without giving details.
Conventional banks typically set up their Islamic subsidiaries by first setting up Islamic banking departments and later on converting them into separate Islamic banks. Others, including BCA, may acquire smaller conventional banks and turn them into Islamic subsidiaries.
"I expect to see more banks spinning off their sharia units as the new VAT law which scraps double taxation from sharia transactions will take effect next year," said Adiwarman Karim, chief of Karim Business Consulting.
The firm offers consultancy services on the Islamic market, including the establishment of Islamic banks.
Indonesia currently has five sharia banks and 24 commercial banks with sharia units as of August 2009, out of around 130 commercial banks operating in Southeast Asia's biggest economy.
ACQUISITIONS
BCA vice president director Jahja Setiaatmadja told Reuters the bank was in the final stage of setting up such a unit, adding that operations may start in January. He declined to give further details.
BCA, with a stock market value of $12 billion, acquired Bank UIB in October 2008 and planned to convert the small lender into a sharia bank.
Ramzi A. Zuhdi, director in charge of Islamic banking at the Indonesian central bank, said it took about a month for banks to obtain approvals to convert their Islamic banking units into Islamic banks if all the administrative requirements were met
In neighbouring Malaysia, seen as the Islamic financial hub in Asia, domestic banks can immediately convert their Islamic units operating under the parent companies into separate entities, said Vaseehar Hassan Abdul Razack, chairman of Unicorn International Islamic Bank Malaysia.
Riawan Amin, the chairman of Indonesia's association of Islamic banks (Asbisindo), said it often took longer than initially expected to launch Islamic banks in the country due partly to administrative reasons such as in recruiting employees.
October 23th 2009 By Reuters.
* Revised law on VAT encouraging banks to set up sharia units
* Paper reports U.S. insurer looking at buying sharia bank
JAKARTA - Five Indonesian banks including Bank Central Asia (BBCA.JK), the No. 3 lender, expect to launch standalone sharia units next year, boosting the sharia market in the world's most populous Muslim nation, officials said.
Industry officials said the revised law on value added tax, which removed double taxation in the Islamic market, would encourage more banks to set up Islamic banking subsidiaries. The double taxation had made Islamic transactions more expensive than comparable conventional deals.
"We hope that it would be easier for us to expand business and seek strategic partners. We also hope to grow faster and attract investors from Middle East," said Barno Sudarwanto, head of planning and development at the sharia unit of Bank Negara Indonesia (BBNI.JK), the No. 4 bank, which will be spun off.
Others due to set up separate sharia banking units include mid-sized lenders Bank Panin (PNBN.JK), Bank Victoria (BVIC.JK) and unlisted Bank Jabar Banten.
Investor Daily newspaper on Friday reported that a U.S. insurance firm had met with central bank officials this week to discuss the possibility of buying an Islamic-compliant lender in Indonesia, without giving details.
Conventional banks typically set up their Islamic subsidiaries by first setting up Islamic banking departments and later on converting them into separate Islamic banks. Others, including BCA, may acquire smaller conventional banks and turn them into Islamic subsidiaries.
"I expect to see more banks spinning off their sharia units as the new VAT law which scraps double taxation from sharia transactions will take effect next year," said Adiwarman Karim, chief of Karim Business Consulting.
The firm offers consultancy services on the Islamic market, including the establishment of Islamic banks.
Indonesia currently has five sharia banks and 24 commercial banks with sharia units as of August 2009, out of around 130 commercial banks operating in Southeast Asia's biggest economy.
ACQUISITIONS
BCA vice president director Jahja Setiaatmadja told Reuters the bank was in the final stage of setting up such a unit, adding that operations may start in January. He declined to give further details.
BCA, with a stock market value of $12 billion, acquired Bank UIB in October 2008 and planned to convert the small lender into a sharia bank.
Ramzi A. Zuhdi, director in charge of Islamic banking at the Indonesian central bank, said it took about a month for banks to obtain approvals to convert their Islamic banking units into Islamic banks if all the administrative requirements were met
In neighbouring Malaysia, seen as the Islamic financial hub in Asia, domestic banks can immediately convert their Islamic units operating under the parent companies into separate entities, said Vaseehar Hassan Abdul Razack, chairman of Unicorn International Islamic Bank Malaysia.
Riawan Amin, the chairman of Indonesia's association of Islamic banks (Asbisindo), said it often took longer than initially expected to launch Islamic banks in the country due partly to administrative reasons such as in recruiting employees.
October 23th 2009 By Reuters.
Thursday, October 22, 2009
SBI eyes second buy in Indonesia
Mumbai: State Bank of India (SBI), the country's largest bank, is actively considering a buyout in Indonesia. The deal size is expected to be over $100 million.
A senior SBI executive told FE, “The bank has already shortlisted three to four Indonesian banks for the proposed acquisition.” The deal would be SBI's second acquisition in Indonesia. In 2006, SBI had acquired 76% stake in PT Bank Indo Monex, an Indonesia bank, which was renamed as Bank SBI Indonesia—a SBI subsidiary.
"The Indonesian bank, which SBI is eyeing, would be merged with Bank SBI Indonesia that currently offers retail and wholesale banking services through 12 branches in the country," the SBI executive said.
In a bid to capitalise on the rising trade and investment between Indonesia and India, Bank SBI Indonesia had launched its foreign exchange trade facility last month. This facility enables the bank to offer foreign exchange services, trade finance and remittance facilities, and depository advisory services. Indonesia is India's second largest export market in Asean after Singapore. India is one of the largest importers of Indonesian commodities including palm oil, coil and gambier.
Indonesia is ranked 16th as a source of imports for India at $6.1 billion as on March 30, 2009, up 38% over the previous year. Currently, India's investments in Indonesia are at an impressive $2 billion. Indo-Indonesian trade crossed $10.6 billion last fiscal.
Sources reveal that SBI is also assessing a possibility to penetrate in countries such as Thailand and Vietnam. The bank is likely to open a representative office in Malaysia by March 2010. SBI's thrust to capture the lucrative business from the Far East region is evident from its Singapore subsidiary's balance sheet size that crossed $2 billion-mark as on September 30, 2009. SBI Singapore's trade finance business grew over 50% in the last six months.
To promote retail lending in Singapore, SBI is expected to open three new branches and two more off-site ATMs at a cumulative investment of over sing$35 million, and recruit over 60 personnel across various levels in the next 3-4 months. The bank launched its mortgage service on August 9, 2009. Till-date, it has transacted business worth over sing$10 million. SBI Singapore currently operates six branches and five off-set ATMs in the country.
As on March 30, 2009, SBI had 92 overseas offices across 32 countries, comprising of 37 branches, five sub offices, eight representative offices, 35 branches of subsidiaries, three managed exchange.
A senior SBI executive told FE, “The bank has already shortlisted three to four Indonesian banks for the proposed acquisition.” The deal would be SBI's second acquisition in Indonesia. In 2006, SBI had acquired 76% stake in PT Bank Indo Monex, an Indonesia bank, which was renamed as Bank SBI Indonesia—a SBI subsidiary.
"The Indonesian bank, which SBI is eyeing, would be merged with Bank SBI Indonesia that currently offers retail and wholesale banking services through 12 branches in the country," the SBI executive said.
In a bid to capitalise on the rising trade and investment between Indonesia and India, Bank SBI Indonesia had launched its foreign exchange trade facility last month. This facility enables the bank to offer foreign exchange services, trade finance and remittance facilities, and depository advisory services. Indonesia is India's second largest export market in Asean after Singapore. India is one of the largest importers of Indonesian commodities including palm oil, coil and gambier.
Indonesia is ranked 16th as a source of imports for India at $6.1 billion as on March 30, 2009, up 38% over the previous year. Currently, India's investments in Indonesia are at an impressive $2 billion. Indo-Indonesian trade crossed $10.6 billion last fiscal.
Sources reveal that SBI is also assessing a possibility to penetrate in countries such as Thailand and Vietnam. The bank is likely to open a representative office in Malaysia by March 2010. SBI's thrust to capture the lucrative business from the Far East region is evident from its Singapore subsidiary's balance sheet size that crossed $2 billion-mark as on September 30, 2009. SBI Singapore's trade finance business grew over 50% in the last six months.
To promote retail lending in Singapore, SBI is expected to open three new branches and two more off-site ATMs at a cumulative investment of over sing$35 million, and recruit over 60 personnel across various levels in the next 3-4 months. The bank launched its mortgage service on August 9, 2009. Till-date, it has transacted business worth over sing$10 million. SBI Singapore currently operates six branches and five off-set ATMs in the country.
As on March 30, 2009, SBI had 92 overseas offices across 32 countries, comprising of 37 branches, five sub offices, eight representative offices, 35 branches of subsidiaries, three managed exchange.
Sunday, October 18, 2009
Malaysia's RHB to pay $356mln for Bank Mestika
KUALA LUMPUR-
Malaysia's fourth-biggest lender RHB Capital (RHBC.KL) will pay 1.2 billion ringgit ($356.1 million) in cash for a controlling stake in Indonesia's PT Bank Mestika Dharma, joining rivals in the chase to gain a foothold in Southeast Asia's most populous country.
RHB said in a statement ahead of a press conference on Monday that it would also undertake a rights issue of 361 million shares, priced at 3.60 ringgit per share.
Malaysia's top two banks, Malayan Banking (Maybank) (MBBM.KL) and CIMB (CIMB.KL), already have a presence in the underbanked Indonesian market.
Analysts said loans growth in Indonesia's banking market, with its huge population, are expected to grow 15-25 percent this year.
Bank Mestika is based in Medan in Sumatra, Indonesia's third-most populous city after Jakarta and Surabaya.
Malaysia's fourth-biggest lender RHB Capital (RHBC.KL) will pay 1.2 billion ringgit ($356.1 million) in cash for a controlling stake in Indonesia's PT Bank Mestika Dharma, joining rivals in the chase to gain a foothold in Southeast Asia's most populous country.
RHB said in a statement ahead of a press conference on Monday that it would also undertake a rights issue of 361 million shares, priced at 3.60 ringgit per share.
Malaysia's top two banks, Malayan Banking (Maybank) (MBBM.KL) and CIMB (CIMB.KL), already have a presence in the underbanked Indonesian market.
Analysts said loans growth in Indonesia's banking market, with its huge population, are expected to grow 15-25 percent this year.
Bank Mestika is based in Medan in Sumatra, Indonesia's third-most populous city after Jakarta and Surabaya.
Thursday, October 15, 2009
IMF Indonesia rep says strong rupiah can help contain inflation
JAKARTA-
The appreciation of Indonesia's rupiah could help contain price pressure in Southeast Asia's biggest economy, the International Monetary Fund's senior resident representative in Indonesia said on Wednesday.
Milan Zavadjil, the IMF's representative, also told Reuters in an email that the central bank, Bank Indonesia (BI), was right to direct intervention to trying to reduce volatility in the rupiah, which is Asia's best-performing currency so far this year.
'In the current situation of strong capital inflows, the appreciation of the rupiah can help contain domestic price rises. BI is right to direct intervention largely at reducing volatility,' he said.
Zavadjil noted that the country's exchange rate flexibility has helped it in the past to deal with large capital flows.
'Exchange rate flexibility has served as an important shock absorber for Indonesia,' he said.
'During the worse of the global financial crisis, the flexibility of the currency helped absorb large capital outflows, thus avoiding a large loss in reserves and a loss in confidence.' October 14th 2009.
The appreciation of Indonesia's rupiah could help contain price pressure in Southeast Asia's biggest economy, the International Monetary Fund's senior resident representative in Indonesia said on Wednesday.
Milan Zavadjil, the IMF's representative, also told Reuters in an email that the central bank, Bank Indonesia (BI), was right to direct intervention to trying to reduce volatility in the rupiah, which is Asia's best-performing currency so far this year.
'In the current situation of strong capital inflows, the appreciation of the rupiah can help contain domestic price rises. BI is right to direct intervention largely at reducing volatility,' he said.
Zavadjil noted that the country's exchange rate flexibility has helped it in the past to deal with large capital flows.
'Exchange rate flexibility has served as an important shock absorber for Indonesia,' he said.
'During the worse of the global financial crisis, the flexibility of the currency helped absorb large capital outflows, thus avoiding a large loss in reserves and a loss in confidence.' October 14th 2009.
3 Indonesia banks agree to US$329 mln loan for coal power plants
JAKARTA- Three Indonesian state-owned banks agreed Wednesday to extend a syndicated loan of Rp3.94 trillion (US$328.5 million) to finance the construction of coal-fired power plants (PLTUs) in Lampung and North Sumatra provinces. BANK RAKYAT INDONESIA (BRI)(JSX:BBRI) and Rp1.28 from BANK NEGARA INDONESIA (BNI)(JSX:BBNI) and BANK MANDIRI (JSX:BMRI) will each contribute Rp1.38 trillion.
* BRI director Asmawi Syam, BNI director Riswandi and Bank Mandiri vice president director I Wayan Agus Mertayasa signed an agreement on the syndicated loan with state electricity company PT PERUSAHAAN LISTRIK NEGARA (PLN) president director Fahmi Mochtar in the presence of Coordinating Minister for Economic Affairs/Finance Minister Sri Mulyani on Wednesday.
* Riswandi said the syndicated loan will account for 85 per cent of the total funds needed to construct PLTU Tarahan in Lampung and PLTU Pangkalan Susu in North Sumatra.
* BRI director Asmawi Syam, BNI director Riswandi and Bank Mandiri vice president director I Wayan Agus Mertayasa signed an agreement on the syndicated loan with state electricity company PT PERUSAHAAN LISTRIK NEGARA (PLN) president director Fahmi Mochtar in the presence of Coordinating Minister for Economic Affairs/Finance Minister Sri Mulyani on Wednesday.
* Riswandi said the syndicated loan will account for 85 per cent of the total funds needed to construct PLTU Tarahan in Lampung and PLTU Pangkalan Susu in North Sumatra.
Saturday, October 10, 2009
Nishat Group Chmn:To Join Maybank In Buying Stakes In Overseas Bks
KARACHI (Dow Jones)-
Pakistan's Nishat Group said Wednesday it will tie up with Malaysia's Malayan Banking Bhd. (1155.KU), or Maybank, to buy stakes in overseas banks.
"We now plan to move ahead with acquiring stakes in some banks in the Middle East and Indonesia," Nishat Group Chairman Mian Mansha told reporters.
He declined to name the potential targets or the likely investment that could be made.
Mansha said the group's MCB Bank (MCB.KA), in which Maybank is a shareholder, is likely to complete the buyout of the Royal Bank of Scotland Group PLC's (RBS) Pakistan operations in two weeks.
The MCB Bank had bought Royal Bank of Scotland's Pakistan assets in August this year.
Pakistan's Nishat Group said Wednesday it will tie up with Malaysia's Malayan Banking Bhd. (1155.KU), or Maybank, to buy stakes in overseas banks.
"We now plan to move ahead with acquiring stakes in some banks in the Middle East and Indonesia," Nishat Group Chairman Mian Mansha told reporters.
He declined to name the potential targets or the likely investment that could be made.
Mansha said the group's MCB Bank (MCB.KA), in which Maybank is a shareholder, is likely to complete the buyout of the Royal Bank of Scotland Group PLC's (RBS) Pakistan operations in two weeks.
The MCB Bank had bought Royal Bank of Scotland's Pakistan assets in August this year.
Maybank CEO: No immediate plans for new acquisitions
KUALA LUMPUR-
Malayan Banking Bhd (Maybank) chief executive officer Datuk Seri Abdul Wahid Omar has dismissed reports that the group is looking to purchase new banking assets after spending RM11.1bil last year on acquisitions overseas.
“We did three acquisitions last year, and we have enough on our plates. The focus for us now is organic growth,” Wahid, who is also the bank’s president, said at a press conference to launch Maybank’s latest premium debit card product.
Earlier this week, the chairman of Pakistan’s Nishat Group, Mian Mohammad Mansha, was quoted in a foreign news report as saying that MCB Bank Ltd and Maybank may team up to acquire banks in the Middle East and Indonesia.
“It is not true. I believe the chairman’s statement was taken out of context,’’ Wahid said.
Nishat Group owns an estimated 32% stake in MCB Bank, while Maybank owns a 20% share in the Pakistan-based lender.
Wahid also ruled out a possible bid for a strategic stake in Bank Islam Malaysia Bhd.
“This is something which we have not looked into,’’ he said.
Maybank Islamic Bhd is currently the country’s biggest Islamic bank with total assets of RM35bil, and “we believe there is tremendous opportunity to expand our Islamic banking operations organically,’’ according to Wahid.
Last week, Dubai Financial Group confirmed that it was in the process of reviewing its strategic options relating to its 40% stake in Bank Islam.
Maybank Islamic had been previously linked as a possible buyer.
Elaborating on the group’s organic expansion plans, Wahid said this might include setting up Islamic banking operations in Indonesia.
Maybank had earlier announced that its unit Bank Internasional Indonesia (BII) will add 200 new branches to its existing 250 outlets over the next three years.
Wahid is also planning to boost contributions from the group’s operations in the Philippines and Cambodia by opening new branches in the two countries.
Malaysia’s biggest bank is also strengthening its grip in the home market.
In the debit-card business, Maybank has a dominant market share of 80% in terms of total billings and a 26% share of the total 24.4 million debit-card holders in the country.
Wahid estimated that Maybank’s debit-card transactions amounted to about RM120mil a month.“For Maybank MasterCard Platinum Debit, we are targeting to recruit half a million card members in two years,’’ Wahid said, adding that the latest product, aimed at big spenders and rich customers, would boost Maybank’s debit-card billings by 80% by the end of 2010.
Malayan Banking Bhd (Maybank) chief executive officer Datuk Seri Abdul Wahid Omar has dismissed reports that the group is looking to purchase new banking assets after spending RM11.1bil last year on acquisitions overseas.
“We did three acquisitions last year, and we have enough on our plates. The focus for us now is organic growth,” Wahid, who is also the bank’s president, said at a press conference to launch Maybank’s latest premium debit card product.
Earlier this week, the chairman of Pakistan’s Nishat Group, Mian Mohammad Mansha, was quoted in a foreign news report as saying that MCB Bank Ltd and Maybank may team up to acquire banks in the Middle East and Indonesia.
“It is not true. I believe the chairman’s statement was taken out of context,’’ Wahid said.
Nishat Group owns an estimated 32% stake in MCB Bank, while Maybank owns a 20% share in the Pakistan-based lender.
Wahid also ruled out a possible bid for a strategic stake in Bank Islam Malaysia Bhd.
“This is something which we have not looked into,’’ he said.
Maybank Islamic Bhd is currently the country’s biggest Islamic bank with total assets of RM35bil, and “we believe there is tremendous opportunity to expand our Islamic banking operations organically,’’ according to Wahid.
Last week, Dubai Financial Group confirmed that it was in the process of reviewing its strategic options relating to its 40% stake in Bank Islam.
Maybank Islamic had been previously linked as a possible buyer.
Elaborating on the group’s organic expansion plans, Wahid said this might include setting up Islamic banking operations in Indonesia.
Maybank had earlier announced that its unit Bank Internasional Indonesia (BII) will add 200 new branches to its existing 250 outlets over the next three years.
Wahid is also planning to boost contributions from the group’s operations in the Philippines and Cambodia by opening new branches in the two countries.
Malaysia’s biggest bank is also strengthening its grip in the home market.
In the debit-card business, Maybank has a dominant market share of 80% in terms of total billings and a 26% share of the total 24.4 million debit-card holders in the country.
Wahid estimated that Maybank’s debit-card transactions amounted to about RM120mil a month.“For Maybank MasterCard Platinum Debit, we are targeting to recruit half a million card members in two years,’’ Wahid said, adding that the latest product, aimed at big spenders and rich customers, would boost Maybank’s debit-card billings by 80% by the end of 2010.
Wednesday, September 30, 2009
CIMB says Indonesia to account for 40 pct profit by 2015
SINGAPORE -
Malaysia's second-biggest bank CIMB BUCM.KL said on Tuesday Indonesia will account for 40 percent of the group's profit by 2015, making it bigger than the contribution from its home operation.
However, the group's CEO Nazir Razak told reporters at the launch of its Singapore retail operations that the lender is not looking for more acquisitions in Indonesia.
Sept 29th From Reuters
Malaysia's second-biggest bank CIMB BUCM.KL said on Tuesday Indonesia will account for 40 percent of the group's profit by 2015, making it bigger than the contribution from its home operation.
However, the group's CEO Nazir Razak told reporters at the launch of its Singapore retail operations that the lender is not looking for more acquisitions in Indonesia.
Sept 29th From Reuters
Monday, September 28, 2009
Japanese Yen Hit Eight Month Record
The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
Sept 28 (Reuters) - The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
(Writing by Mathew Veedon and Eric Burroughs)
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
Sept 28 (Reuters) - The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
(Writing by Mathew Veedon and Eric Burroughs)
INDONESIA'S BANK MANDIRI EYEING CONTROLLING STAKE IN AXA MANDIRI
JAKARTA-
Indonesia's PT Bank Mandiri (JSX:BMRI) said it is set to have controlling stake in life insurance company PT Axa Mandiri Financial Service (AMFS), it owns jointly with a French partner.
The state bank and the country's largest lender in assets, owns 49 per cent of Axa Mandiri and France's AXA holds the majority 51 per cent share.
Agus Martowardojo, the president of Bank Mandiri said the bank wants to acquire at least a 2 per cent stake from the AXA group, adding the acquisition process is expected to be completed before the end of this year.
AXA Mandiri has succeeded in banc-assurance business and grown to rank among three largest in life insurance market share in less than two years after its operation in the country. (28th September 2009)
Indonesia's PT Bank Mandiri (JSX:BMRI) said it is set to have controlling stake in life insurance company PT Axa Mandiri Financial Service (AMFS), it owns jointly with a French partner.
The state bank and the country's largest lender in assets, owns 49 per cent of Axa Mandiri and France's AXA holds the majority 51 per cent share.
Agus Martowardojo, the president of Bank Mandiri said the bank wants to acquire at least a 2 per cent stake from the AXA group, adding the acquisition process is expected to be completed before the end of this year.
AXA Mandiri has succeeded in banc-assurance business and grown to rank among three largest in life insurance market share in less than two years after its operation in the country. (28th September 2009)
Thursday, September 17, 2009
StanChart to advise Bayan on Indonesia coal financing
JAKARTA -
Indonesian coal miner PT Bayan Resources Tbk (BYAN.JK) said on Wednesday it has appointed Standard Chartered Bank (STAN.L) as a financial adviser for raising at least $150 million for a briquetted coal project.
Standard Chartered is advising PT Kaltim Supacoal -- a joint venture firm between Bayan and a unit of Australia's White Energy Ltd (WEC.AX) -- on financing for the expansion phase of Bayan's Tabang mine in East Kalimantan on Borneo island to 5 million tonnes in annual capacity, it said.
"Based on current information and proposed expansion plans, the final amount available under the facility is expected to be a minimum of $150 million," Bayan said in a statement.
The joint venture was established to turn high moisture coal produced in Bayan's Tabang mine into a higher energy clean burning product using technology provided by White Energy for use in coal-fired power plants.
Bayan plans to get production up to 15 million tonnes a year from an initial target of 5 million. It has completed construction of the first coal upgrading plant and has produced first batch upgraded clean coal briquettes last month at its plant which has a capacity of 1 million tonnes per annum.
The financing will be conditional upon the successful completion of due diligence by Standard Chartered Bank including the satisfactory operation of the new plant, the firm said.
Standard Chartered has also agreed to provide Kaltim Supacoal with an immediate interim working capital facility of $10 million to assist with its operating and production ramp-up expenses.
Bayan is one of Indonesia's largest coal miners, operating a 15 million tonnes per year coal terminal at Balikpapan in East Kalimantan.
Indonesian coal miner PT Bayan Resources Tbk (BYAN.JK) said on Wednesday it has appointed Standard Chartered Bank (STAN.L) as a financial adviser for raising at least $150 million for a briquetted coal project.
Standard Chartered is advising PT Kaltim Supacoal -- a joint venture firm between Bayan and a unit of Australia's White Energy Ltd (WEC.AX) -- on financing for the expansion phase of Bayan's Tabang mine in East Kalimantan on Borneo island to 5 million tonnes in annual capacity, it said.
"Based on current information and proposed expansion plans, the final amount available under the facility is expected to be a minimum of $150 million," Bayan said in a statement.
The joint venture was established to turn high moisture coal produced in Bayan's Tabang mine into a higher energy clean burning product using technology provided by White Energy for use in coal-fired power plants.
Bayan plans to get production up to 15 million tonnes a year from an initial target of 5 million. It has completed construction of the first coal upgrading plant and has produced first batch upgraded clean coal briquettes last month at its plant which has a capacity of 1 million tonnes per annum.
The financing will be conditional upon the successful completion of due diligence by Standard Chartered Bank including the satisfactory operation of the new plant, the firm said.
Standard Chartered has also agreed to provide Kaltim Supacoal with an immediate interim working capital facility of $10 million to assist with its operating and production ramp-up expenses.
Bayan is one of Indonesia's largest coal miners, operating a 15 million tonnes per year coal terminal at Balikpapan in East Kalimantan.
Tuesday, September 15, 2009
Indonesia's largest bank leads syndication credit to fertilizer company
JAKARTA-
Indonesia's largest bank, Bank Mandiri, was appointed to lead a syndication credit, worth 490 million U.S. dollars, for PT Pupuk Kalimatan Timur (Pupuk Kaltim),the country's biggest fertilizer manufacturer, local media detikcom reported on Monday.
The fund is aimed to refinance construction of Kaltim-5 project with capacity of 2,500 Metric Tons per Day (MTPD) of ammonia and 3,500 MTPD of urea in Bontang of West Kalimantan, Agus Martowardojo, the bank's president director, was quoted by the report as saying.
The total investment for the project is 700 million U.S. dollars, according to the report.
"The syndication credit is expected to be an important momentum to support government program of fertilizer company revitalization for the sake of the country's food resilience," said Agus here.
He said that local and foreign banks have expressed their intention to participate in the syndication.
There is an annual demand of 10 million tons of fertilizer in the country, however, the domestic companies can only produce 7 million tons a year.
The Pupuk Kaltim's president director Hidayat Nyakman said the project is one effort to increase Indonesia's fertilizer production capacity. The project will replace the aging and inefficient Kaltim -1.
Hidayat said that of the total investment of 700 million, his company expects 70 percent (490 million dollars) from banking finance and the rest (210 million dollars) from its internal fund.
Indonesia's largest bank, Bank Mandiri, was appointed to lead a syndication credit, worth 490 million U.S. dollars, for PT Pupuk Kalimatan Timur (Pupuk Kaltim),the country's biggest fertilizer manufacturer, local media detikcom reported on Monday.
The fund is aimed to refinance construction of Kaltim-5 project with capacity of 2,500 Metric Tons per Day (MTPD) of ammonia and 3,500 MTPD of urea in Bontang of West Kalimantan, Agus Martowardojo, the bank's president director, was quoted by the report as saying.
The total investment for the project is 700 million U.S. dollars, according to the report.
"The syndication credit is expected to be an important momentum to support government program of fertilizer company revitalization for the sake of the country's food resilience," said Agus here.
He said that local and foreign banks have expressed their intention to participate in the syndication.
There is an annual demand of 10 million tons of fertilizer in the country, however, the domestic companies can only produce 7 million tons a year.
The Pupuk Kaltim's president director Hidayat Nyakman said the project is one effort to increase Indonesia's fertilizer production capacity. The project will replace the aging and inefficient Kaltim -1.
Hidayat said that of the total investment of 700 million, his company expects 70 percent (490 million dollars) from banking finance and the rest (210 million dollars) from its internal fund.
Friday, September 11, 2009
Indonesia's Mandiri to open remittance unit in Malaysia
JAKARTA-
Indonesia's Bank Mandiri (BMRI.JK) will open a new unit in Kuala Lumpur dedicated to collecting remittances from the millions of Indonesians working in Malaysia, a senior executive said late on Thursday.
Thomas Arifin, Director for International Banking, said the new unit would help Mandiri, Indonesia's biggest bank, increase its fee-based income.
"The bank will initially cover millions of Indonesian workers who are working in Malaysia by progressively extending the number of outlets," Arifin said in a text message sent to Investor Daily.
In a press release on Friday, Bank Mandiri said the remittance unit in Malaysia would be set up by Mandiri International Remittance, the lender's subsidiary which is focused on developing remittance services.
Indonesians working abroad, mainly Malaysia, Singapore and the Middle East, sent home about $8.2 billion in remittances in 2008, according to the state agency in charge of migrant workers.
However, remittances are expected to drop as much as 10 percent this year as firms lay off workers because of tougher economic conditions.
Shares in Bank Mandiri were unchanged on Friday, while the broader market .JKSE was up 0.4 percent.
Indonesia's Bank Mandiri (BMRI.JK) will open a new unit in Kuala Lumpur dedicated to collecting remittances from the millions of Indonesians working in Malaysia, a senior executive said late on Thursday.
Thomas Arifin, Director for International Banking, said the new unit would help Mandiri, Indonesia's biggest bank, increase its fee-based income.
"The bank will initially cover millions of Indonesian workers who are working in Malaysia by progressively extending the number of outlets," Arifin said in a text message sent to Investor Daily.
In a press release on Friday, Bank Mandiri said the remittance unit in Malaysia would be set up by Mandiri International Remittance, the lender's subsidiary which is focused on developing remittance services.
Indonesians working abroad, mainly Malaysia, Singapore and the Middle East, sent home about $8.2 billion in remittances in 2008, according to the state agency in charge of migrant workers.
However, remittances are expected to drop as much as 10 percent this year as firms lay off workers because of tougher economic conditions.
Shares in Bank Mandiri were unchanged on Friday, while the broader market .JKSE was up 0.4 percent.
Wednesday, September 9, 2009
More than a year ago, Malaysia Today triggered the alarm bell by revealing that Maybank, a taxpayer-owned bank, was about to blow billions in a stupid deal. None of the politicians from Pakatan Rakyat took up the case though. Maybe they felt since it was Malaysia Today that revealed it then there was no need to panic. But NST and BT also reported the matter, although they tried to make it sound like a positive move. Now, everyone is trying to lock the stable door after the horse has bolted.
NO HOLDS BARRED
Raja Petra Kamarudin
Another RM2 billion loss?
By Hussein Hamid
http://blog.limkitsiang.com/, 9 September 2009
Tell me who would be stupid enough to go and buy a bank in Indonesia? You tell me who would do that? Then if that was not enough you go and take a running jump into Pakistan and buy another bank there. But wait there is more! While they are doing that why not pick up a bank in Vietnam. In all they spent an incredible RM10.8 billion to acquire these three banks. Who would be stupid enough to do this when Maybank has been advise AGAINST making the purchase? Maybank belongs to the Government and so they will take instructions from the Government.
Taking instructions from a Government run by idiots who thinks that Maybank is also Maybank. So in essence it is the Barisan Government that is stupid enough to go and buy three Banks in Indonesia, Pakistan and Vietnam for RM10.8 billion.
Now Malayan Banking has confirmed that it lost RM2 billion in this escapade. Now which UMNO guy made a few hundred million in commission from these purchases? Who are the usual suspects? Najib as the Minister of Finance has to be suspect number one – but if MACC does the questioning they will say that he is just ‘helping with inquires’. But Najib must beware that even helping with inquiries can be dangerous if Muhyiddin has anything to do about it.
Najib must have been advised by that Nor Mohamed Yaacob because he had experience of losing more billion when he was with Bank Negara – around RM30 billion in fact.
This latest escapades would have been hysterically funny if it had happened in one of those tin pot African country where you would need half the money in the Banks just to buy a loaf of bread. And of course as far as Najib is concern this is a ‘victimless crime’ because it does no physical harm to any person or property, or to which was in fact consented, and is currently illegal if based on statutory laws. As victimless as PKFZ and all those plundering of the nation resources. Well Najib I got news for you. The Rakyat now knows that in the end they pay !! That RM37.23 million Aidilfitri bonus for Felda – we all pay. That RN500 million for Razak Baginda – we pay. Soon you will be paying for this that you are now making the Rakyat pay…and then it will be Good Night for you.
*************************************************
Maybank wins bid for Indonesia's BII
By Adeline Paul Raj
New Straits Times, 27 March 2008
MALAYSIA'S biggest bank, Malayan Banking Bhd (Maybank), has won a bid to take control of Bank Internasional Indonesia (BII) for US$1.5 billion (about RM4.8 billion), a major step for the lender to expand in the region. BII is Indonesia's sixth largest bank in terms of assets, with over 230 branches.
"This acquisition will transform our growth prospects in Indonesia and significantly enhance our regional presence," Maybank acting chief executive officer Datuk Aminuddin Md Desa told reporters at a briefing yesterday in Kuala Lumpur.
To comply with takeover rules, Maybank will also offer to buy the remaining 44 per cent of BII, which could push its total bill to US$2.7 billion (RM8.6 billion). It plans to fund this internally. The deal comes just days after it agreed to buy a 15 per cent stake in Vietnam's An Binh Bank for RM430 million.
Maybank's bid for BII, at 4.6 times book value, appears steep, an indication of the stiff fight from bigger rivals and limited opportunities in the region. Analysts said that it was probably the most expensive bank purchase ever in Indonesia. Research firms like Citigroup had expected it to pay US$1.8 billion (RM5.7 billion) for all of BII.
Aminuddin, however, believes it is worth paying the hefty premium to get a controlling stake in a crucial market like Indonesia. The country has no foreign shareholding limits and offers one of the highest growth potential in the region. "It's an opportunity we couldn't afford to miss," he said.
A Reuters report said Maybank had beaten Bank of China for BII, after Europe's biggest lender, HSBC, dropped out in the last leg of the race. According to Aminuddin, BII will start contributing profits in the third year after the deal is completed. Maybank's strategy is to tap the remittance business and, later, trade finance. With BII, revenue contribution from Maybank's international operations will jump to 30 per cent in the next one or two years from about 19 per cent currently, he said.
In the first stage of the BII deal, which could take three months to complete, Maybank will pay RM4.8 billion to buy all of Sorak Financial Holdings Pte Ltd, which holds 56 per cent of BII. Sorak is owned by Singapore investment arm Temasek (75 per cent) and South Korea's Kookmin Bank (25 per cent). Maybank will then make a RM3.8 billion offer to buy out BII's minority shareholders.
On whether Maybank intends to take BII private, Aminuddin said it was still too early to say as it would depend on how minority shareholders respond to the offer. He pointed out, however, that Indonesian law states that as long as there are at least 3,000 public shareholders, a company can be kept listed no matter what the public shareholding spread is. Maybank, whose shares traded at RM8.95 yesterday before being suspended for the announcement, expects to complete the entire deal in six months. Temasek is selling its stake in BII to comply with Indonesian laws that forbid a foreign investor from owning more than one bank.
*************************************************
Temasek comes full circle with BII stake
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
Business Times, 11 August 2008
Temasek Holdings’ trouble-plagued bid to sell a stake in Indonesia's PT Bank Internasional Indonesia to Malaysia's Maybank holds a significance beyond the deal itself. More than just a transaction gone awry, it also reflects the changing realities facing the Singapore investment company.
The story of BII in Temasek's portfolio, in fact, says a lot about the shifts in its investment history over the last few years.
It will not be too much of an exaggeration to say that the road to Barclays and Merrill Lynch started with two Indonesian banks in the early 2000s. BII was one of the first major overseas investments by Temasek. Back in 2003, Temasek led a consortium called Sorak Financial Holdings, which also included Kookmin Bank, Barclays and Swiss-based ICB Financial Group Holdings, to clinch ownership of BII after reaching an agreement with the Indonesian Bank Restructuring Agency (Ibra).
Sorak paid 1.9 trillion rupiah (S$380 million at the time) for a 51 per cent stake in BII. The BII acquisition came just after Temasek and Deutsche Bank acquired a 62 per cent stake in another Indonesian lender, Bank Danamon, earlier that year.
Until then, Temasek's major investments had been mostly Singapore-centric. So BII, together with Danamon, marked the start of Temasek's overseas investments, as well as the beginning of its investments in foreign banks. Some questioned the acquisitions at the time, while others saw a political motive (buying the two banks, which were distressed entities restructured for sale by Ibra, was seen as contributing to Indonesia's recovery from the Asian crisis).
But there was also a clear commercial imperative: It was a genuine opportunity to buy financial assets at attractive valuations with the potential for strong returns — a theme that would run through to the present time.
Temasek went on to buy over Barclays and ICB's stakes in BII, and is estimated to have invested at least S$455 million in all in the bank.
Then came one of the regulatory shifts that have become all too familiar to Temasek. New foreign ownership rules under the Indonesian central bank's single presence policy, which takes effect by the end of 2010, meant that Temasek had to reduce its Indonesian bank portfolio by half.
Until late last year, the preferred option seemed to be a merger of BII and Danamon to meet the new rules. BII went as far as to say that it was drafting a proposal to merge with Danamon. The two banks complemented each other, said BII president-director Henry Ho.
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
What led to the change of heart? First, it could be reflective of Temasek's growing caution, even disappointment, over the Indonesian market. The regulatory shifts and flip-flops in Indonesia, including that involving Temasek's telco investment
Indosat, suggested that reducing its Indonesian exposure might be a prudent option.
At the same time, while the financial sector in Indonesia appeared healthy, critics have charged that it was vulnerable to a sudden reversal of fortunes because of the inflow of hot money into the stock market and the spike, until recently, in international commodity prices.
The second factor might hold some irony. If the path to Barclays and Merrill had started with BII and Danamon, then the decision to sell BII could also be traced to Temasek's push west-wards. Temasek's investments in Barclays and Merrill, beginning last year, signified a new global thrust beyond regional acquisitions.
That meant realigning the portfolio, and raising funds for new investments by disposing of existing assets. There could be one more reason at play: the billions pumped into Barclays and Merrill, while undeniably long-term in nature, are currently sitting on huge paper losses. It would be nice to book a profit somewhere, and the sale of the BII stake to Maybank would have yielded a useful S$1 billion, according to some estimates.
Of course, in the neighbourhood scheme of things, Malaysian central bank Bank Negara put the brakes on the deal last month. Apparently, it was worried that Maybank could suffer losses from overpaying (not unreasonable, given that the price is 4.7 times over book) for BII. It is still unclear how things would pan out, but as it is, it is a setback for Temasek.
It is now forced to revisit its options for BII, including merging it with Danamon. And if Temasek continues to put the BII stake up for sale, it is unlikely to fetch a price as high as the one Maybank was willing to pay, given the circumstances.
Another lesson in the realities of investing in the region then. No wonder even ailing US and European banks look so attractive.
*************************************************
Najib: Deal good for Maybank
New Straits Times, October 2008
Maybank's decision to acquire a controlling stake in PT Bank Internasional Indonesia (BII) was made before the global economic downturn, Datuk Seri Najib Razak said.
Therefore, he said, it was too late for Maybank to back out of the acquisition.
Asked if the move was a good idea considering the current state of the global economy, the deputy prime minister and finance minister said the decision was a commercial one which was up to Maybank to decide on without government intervention.
Najib, however, insisted that the move was still a good one for the country.
"It (Maybank) will own the fifth largest Indonesian bank and become a regional bank," he said at the cabinet's open house at the Putra World Trade Centre on Wednesday.
Maybank shelled out RM4.26 billion for a 55.6 per cent stake in BII on Tuesday.
It was given a RM759 million rebate after the original price was deemed too high given the current economic scenario.
The initial price was more than four times the book value of the bank, resulting in several parties demanding that a new deal, at two to three times the book value, be hammered out.
Maybank stood to forfeit its RM480 million deposit from the original tender if it pulled out of the deal.
NO HOLDS BARRED
Raja Petra Kamarudin
Another RM2 billion loss?
By Hussein Hamid
http://blog.limkitsiang.com/, 9 September 2009
Tell me who would be stupid enough to go and buy a bank in Indonesia? You tell me who would do that? Then if that was not enough you go and take a running jump into Pakistan and buy another bank there. But wait there is more! While they are doing that why not pick up a bank in Vietnam. In all they spent an incredible RM10.8 billion to acquire these three banks. Who would be stupid enough to do this when Maybank has been advise AGAINST making the purchase? Maybank belongs to the Government and so they will take instructions from the Government.
Taking instructions from a Government run by idiots who thinks that Maybank is also Maybank. So in essence it is the Barisan Government that is stupid enough to go and buy three Banks in Indonesia, Pakistan and Vietnam for RM10.8 billion.
Now Malayan Banking has confirmed that it lost RM2 billion in this escapade. Now which UMNO guy made a few hundred million in commission from these purchases? Who are the usual suspects? Najib as the Minister of Finance has to be suspect number one – but if MACC does the questioning they will say that he is just ‘helping with inquires’. But Najib must beware that even helping with inquiries can be dangerous if Muhyiddin has anything to do about it.
Najib must have been advised by that Nor Mohamed Yaacob because he had experience of losing more billion when he was with Bank Negara – around RM30 billion in fact.
This latest escapades would have been hysterically funny if it had happened in one of those tin pot African country where you would need half the money in the Banks just to buy a loaf of bread. And of course as far as Najib is concern this is a ‘victimless crime’ because it does no physical harm to any person or property, or to which was in fact consented, and is currently illegal if based on statutory laws. As victimless as PKFZ and all those plundering of the nation resources. Well Najib I got news for you. The Rakyat now knows that in the end they pay !! That RM37.23 million Aidilfitri bonus for Felda – we all pay. That RN500 million for Razak Baginda – we pay. Soon you will be paying for this that you are now making the Rakyat pay…and then it will be Good Night for you.
*************************************************
Maybank wins bid for Indonesia's BII
By Adeline Paul Raj
New Straits Times, 27 March 2008
MALAYSIA'S biggest bank, Malayan Banking Bhd (Maybank), has won a bid to take control of Bank Internasional Indonesia (BII) for US$1.5 billion (about RM4.8 billion), a major step for the lender to expand in the region. BII is Indonesia's sixth largest bank in terms of assets, with over 230 branches.
"This acquisition will transform our growth prospects in Indonesia and significantly enhance our regional presence," Maybank acting chief executive officer Datuk Aminuddin Md Desa told reporters at a briefing yesterday in Kuala Lumpur.
To comply with takeover rules, Maybank will also offer to buy the remaining 44 per cent of BII, which could push its total bill to US$2.7 billion (RM8.6 billion). It plans to fund this internally. The deal comes just days after it agreed to buy a 15 per cent stake in Vietnam's An Binh Bank for RM430 million.
Maybank's bid for BII, at 4.6 times book value, appears steep, an indication of the stiff fight from bigger rivals and limited opportunities in the region. Analysts said that it was probably the most expensive bank purchase ever in Indonesia. Research firms like Citigroup had expected it to pay US$1.8 billion (RM5.7 billion) for all of BII.
Aminuddin, however, believes it is worth paying the hefty premium to get a controlling stake in a crucial market like Indonesia. The country has no foreign shareholding limits and offers one of the highest growth potential in the region. "It's an opportunity we couldn't afford to miss," he said.
A Reuters report said Maybank had beaten Bank of China for BII, after Europe's biggest lender, HSBC, dropped out in the last leg of the race. According to Aminuddin, BII will start contributing profits in the third year after the deal is completed. Maybank's strategy is to tap the remittance business and, later, trade finance. With BII, revenue contribution from Maybank's international operations will jump to 30 per cent in the next one or two years from about 19 per cent currently, he said.
In the first stage of the BII deal, which could take three months to complete, Maybank will pay RM4.8 billion to buy all of Sorak Financial Holdings Pte Ltd, which holds 56 per cent of BII. Sorak is owned by Singapore investment arm Temasek (75 per cent) and South Korea's Kookmin Bank (25 per cent). Maybank will then make a RM3.8 billion offer to buy out BII's minority shareholders.
On whether Maybank intends to take BII private, Aminuddin said it was still too early to say as it would depend on how minority shareholders respond to the offer. He pointed out, however, that Indonesian law states that as long as there are at least 3,000 public shareholders, a company can be kept listed no matter what the public shareholding spread is. Maybank, whose shares traded at RM8.95 yesterday before being suspended for the announcement, expects to complete the entire deal in six months. Temasek is selling its stake in BII to comply with Indonesian laws that forbid a foreign investor from owning more than one bank.
*************************************************
Temasek comes full circle with BII stake
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
Business Times, 11 August 2008
Temasek Holdings’ trouble-plagued bid to sell a stake in Indonesia's PT Bank Internasional Indonesia to Malaysia's Maybank holds a significance beyond the deal itself. More than just a transaction gone awry, it also reflects the changing realities facing the Singapore investment company.
The story of BII in Temasek's portfolio, in fact, says a lot about the shifts in its investment history over the last few years.
It will not be too much of an exaggeration to say that the road to Barclays and Merrill Lynch started with two Indonesian banks in the early 2000s. BII was one of the first major overseas investments by Temasek. Back in 2003, Temasek led a consortium called Sorak Financial Holdings, which also included Kookmin Bank, Barclays and Swiss-based ICB Financial Group Holdings, to clinch ownership of BII after reaching an agreement with the Indonesian Bank Restructuring Agency (Ibra).
Sorak paid 1.9 trillion rupiah (S$380 million at the time) for a 51 per cent stake in BII. The BII acquisition came just after Temasek and Deutsche Bank acquired a 62 per cent stake in another Indonesian lender, Bank Danamon, earlier that year.
Until then, Temasek's major investments had been mostly Singapore-centric. So BII, together with Danamon, marked the start of Temasek's overseas investments, as well as the beginning of its investments in foreign banks. Some questioned the acquisitions at the time, while others saw a political motive (buying the two banks, which were distressed entities restructured for sale by Ibra, was seen as contributing to Indonesia's recovery from the Asian crisis).
But there was also a clear commercial imperative: It was a genuine opportunity to buy financial assets at attractive valuations with the potential for strong returns — a theme that would run through to the present time.
Temasek went on to buy over Barclays and ICB's stakes in BII, and is estimated to have invested at least S$455 million in all in the bank.
Then came one of the regulatory shifts that have become all too familiar to Temasek. New foreign ownership rules under the Indonesian central bank's single presence policy, which takes effect by the end of 2010, meant that Temasek had to reduce its Indonesian bank portfolio by half.
Until late last year, the preferred option seemed to be a merger of BII and Danamon to meet the new rules. BII went as far as to say that it was drafting a proposal to merge with Danamon. The two banks complemented each other, said BII president-director Henry Ho.
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
What led to the change of heart? First, it could be reflective of Temasek's growing caution, even disappointment, over the Indonesian market. The regulatory shifts and flip-flops in Indonesia, including that involving Temasek's telco investment
Indosat, suggested that reducing its Indonesian exposure might be a prudent option.
At the same time, while the financial sector in Indonesia appeared healthy, critics have charged that it was vulnerable to a sudden reversal of fortunes because of the inflow of hot money into the stock market and the spike, until recently, in international commodity prices.
The second factor might hold some irony. If the path to Barclays and Merrill had started with BII and Danamon, then the decision to sell BII could also be traced to Temasek's push west-wards. Temasek's investments in Barclays and Merrill, beginning last year, signified a new global thrust beyond regional acquisitions.
That meant realigning the portfolio, and raising funds for new investments by disposing of existing assets. There could be one more reason at play: the billions pumped into Barclays and Merrill, while undeniably long-term in nature, are currently sitting on huge paper losses. It would be nice to book a profit somewhere, and the sale of the BII stake to Maybank would have yielded a useful S$1 billion, according to some estimates.
Of course, in the neighbourhood scheme of things, Malaysian central bank Bank Negara put the brakes on the deal last month. Apparently, it was worried that Maybank could suffer losses from overpaying (not unreasonable, given that the price is 4.7 times over book) for BII. It is still unclear how things would pan out, but as it is, it is a setback for Temasek.
It is now forced to revisit its options for BII, including merging it with Danamon. And if Temasek continues to put the BII stake up for sale, it is unlikely to fetch a price as high as the one Maybank was willing to pay, given the circumstances.
Another lesson in the realities of investing in the region then. No wonder even ailing US and European banks look so attractive.
*************************************************
Najib: Deal good for Maybank
New Straits Times, October 2008
Maybank's decision to acquire a controlling stake in PT Bank Internasional Indonesia (BII) was made before the global economic downturn, Datuk Seri Najib Razak said.
Therefore, he said, it was too late for Maybank to back out of the acquisition.
Asked if the move was a good idea considering the current state of the global economy, the deputy prime minister and finance minister said the decision was a commercial one which was up to Maybank to decide on without government intervention.
Najib, however, insisted that the move was still a good one for the country.
"It (Maybank) will own the fifth largest Indonesian bank and become a regional bank," he said at the cabinet's open house at the Putra World Trade Centre on Wednesday.
Maybank shelled out RM4.26 billion for a 55.6 per cent stake in BII on Tuesday.
It was given a RM759 million rebate after the original price was deemed too high given the current economic scenario.
The initial price was more than four times the book value of the bank, resulting in several parties demanding that a new deal, at two to three times the book value, be hammered out.
Maybank stood to forfeit its RM480 million deposit from the original tender if it pulled out of the deal.
Friday, September 4, 2009
Maybank, CIMB in big fight in Indonesia
THE stage is set and the fight begins at two levels for CIMB group and Malayan Banking Bhd (Maybank) to slug it out in Indonesia – between themselves as the two largest Malaysian banking groups – and among the formidable banking giants in Indonesia.
Between the two, it looks like CIMB has a seven-year headstart, having bought Bank Niaga at a time when many were afraid to touch Indonesian assets and at a much cheaper price of 1.5 times book value compared with Maybank’s acquisition of Bank Internasional Indonesia (BII) at 4.6 times.
While Maybank was busy settling external and internal issues related to the Indonesian government’s regulations and huge impairment charges at BII, CIMB was building its fort in Indonesia by merging Bank Niaga with Bank Lippo. That brings CIMB Niaga’s branch network in Indonesia to 654 which definitely overshadows BII’s 250 at the moment.
On an individual bank level, CIMB Niaga, the fifth largest bank in terms of asset size, and BII, which is eighth largest, will have to contend with the other banking giants in Indonesia.
CIMB’s overseas (mostly from Indonesia) pre-tax profit contribution at 22% is, of course, a source of excitement within the group. It is something that Maybank, which is already very successful in its core commercial banking operations, is eyeing with “green eyes.’’
For the second quarter ended June 30, the enlarged CIMB Niaga’s pre-tax contribution surged 82.8% to RM371mil from RM203mil. When it comes to business and competition, those that respond to new challenges can emerge winners and those that appear to be the current winners can suddenly find themselves out of the race, if they are not vigilant.
For many back home, it will be a keenly watched competition between the two Malaysian banking groups in Indonesia especially now that Maybank has made known its decision to take a one-time hit of RM1.7bil in impairment and higher loan loss provisions at BII.
With a new team in place, BII appears resolute and confident that it can make some money at the operating level by year-end although it will take three to five years to be earnings accretive.
The anticipation (and pressure) is very obvious among Maybank executives when they speak of BII. “Our first priority was to address the motorcycle financing problems,’’ said Maybank president and CEO Datuk Seri Abdul Wahid at last week’s results briefing. “That has turned around with good operating numbers. We will proceed to improve consumer, small and medium-scale enterprises and corporate banking at BII.’’
The initial expectations of BII are not high but as the momentum builds up, Maybank hopes to at least obtain a return on investment that is equivalent to the cost of debt (taken to fund the acquisition) at about 6%, which comes up to about RM474mil.
The competition between CIMB and Maybank in Indonesia will become more intense should Maybank double its number of branches at BII, by which time, CIMB would have done something else to fortify its position.
At the moment, CIMB seems pretty confident that it has the scale; something that is required in the Indonesian banking sector, while their strategists would probably be trying to figure how fast Maybank would take to carry out its BII expansion.
CIMB chief financial officer Kenny Kim recently told StarBiz that CIMB Niaga was dominant in the capital market franchise, with Niaga’s strength in retail and corporate banking and Lippo’s leadership in transactional banking. Overall, the message is to build leadership in key market segments.
All said, one should not forget that Maybank has other substantial foreign operations such as in Singapore while CIMB is about to implement a transformation programme for its Thai business.
By Yap Leng Kuen
● Senior business editor Yap Leng Kuen’s view is that reach through a strong branch presence is important but equally vital are internal strategies to extract value. Many would be watching if BII can deliver its numbers and show that it is able to earn more from a smaller physical branch network than CIMB Niaga.
Between the two, it looks like CIMB has a seven-year headstart, having bought Bank Niaga at a time when many were afraid to touch Indonesian assets and at a much cheaper price of 1.5 times book value compared with Maybank’s acquisition of Bank Internasional Indonesia (BII) at 4.6 times.
While Maybank was busy settling external and internal issues related to the Indonesian government’s regulations and huge impairment charges at BII, CIMB was building its fort in Indonesia by merging Bank Niaga with Bank Lippo. That brings CIMB Niaga’s branch network in Indonesia to 654 which definitely overshadows BII’s 250 at the moment.
On an individual bank level, CIMB Niaga, the fifth largest bank in terms of asset size, and BII, which is eighth largest, will have to contend with the other banking giants in Indonesia.
CIMB’s overseas (mostly from Indonesia) pre-tax profit contribution at 22% is, of course, a source of excitement within the group. It is something that Maybank, which is already very successful in its core commercial banking operations, is eyeing with “green eyes.’’
For the second quarter ended June 30, the enlarged CIMB Niaga’s pre-tax contribution surged 82.8% to RM371mil from RM203mil. When it comes to business and competition, those that respond to new challenges can emerge winners and those that appear to be the current winners can suddenly find themselves out of the race, if they are not vigilant.
For many back home, it will be a keenly watched competition between the two Malaysian banking groups in Indonesia especially now that Maybank has made known its decision to take a one-time hit of RM1.7bil in impairment and higher loan loss provisions at BII.
With a new team in place, BII appears resolute and confident that it can make some money at the operating level by year-end although it will take three to five years to be earnings accretive.
The anticipation (and pressure) is very obvious among Maybank executives when they speak of BII. “Our first priority was to address the motorcycle financing problems,’’ said Maybank president and CEO Datuk Seri Abdul Wahid at last week’s results briefing. “That has turned around with good operating numbers. We will proceed to improve consumer, small and medium-scale enterprises and corporate banking at BII.’’
The initial expectations of BII are not high but as the momentum builds up, Maybank hopes to at least obtain a return on investment that is equivalent to the cost of debt (taken to fund the acquisition) at about 6%, which comes up to about RM474mil.
The competition between CIMB and Maybank in Indonesia will become more intense should Maybank double its number of branches at BII, by which time, CIMB would have done something else to fortify its position.
At the moment, CIMB seems pretty confident that it has the scale; something that is required in the Indonesian banking sector, while their strategists would probably be trying to figure how fast Maybank would take to carry out its BII expansion.
CIMB chief financial officer Kenny Kim recently told StarBiz that CIMB Niaga was dominant in the capital market franchise, with Niaga’s strength in retail and corporate banking and Lippo’s leadership in transactional banking. Overall, the message is to build leadership in key market segments.
All said, one should not forget that Maybank has other substantial foreign operations such as in Singapore while CIMB is about to implement a transformation programme for its Thai business.
By Yap Leng Kuen
● Senior business editor Yap Leng Kuen’s view is that reach through a strong branch presence is important but equally vital are internal strategies to extract value. Many would be watching if BII can deliver its numbers and show that it is able to earn more from a smaller physical branch network than CIMB Niaga.
Wednesday, August 26, 2009
Indonesia's Bank Mandiri eyes subordinated debt issue
JAKARTA -
Indonesia's biggest lender PT Bank Mandiri Tbk (BMRI.JK) plans to raise 3 trillion rupiah ($300 million) or more from a subordinated bond issue for further expansion, the bank's president director said late on Tuesday.
President Director Agus Martowardojo told reporters that the debt offering would take place by the end of the year.
"We estimate the value to be around 3 trillion rupiah or more. We are watching the market response for possible dollar (denominated) bonds or rupiah, at this point the rupiah is likely to be more feasible," he said.
Mandiri, which has a stock market value of $8.67 billion, posted a 24.4 percent increase in net profit to 1.5 trillion rupiah in the second quarter, based on Reuters calculations.
The lender forecast loan growth of 15-18 percent in 2009, higher than the central bank's forecast of 11-12 percent.
Mandiri will select advisors for the issue from seven investment banks and securities firms already approached, but Martowardojo declined to say how many advisors would be appointed. ($1 = 9,995 rupiah)
Indonesia's biggest lender PT Bank Mandiri Tbk (BMRI.JK) plans to raise 3 trillion rupiah ($300 million) or more from a subordinated bond issue for further expansion, the bank's president director said late on Tuesday.
President Director Agus Martowardojo told reporters that the debt offering would take place by the end of the year.
"We estimate the value to be around 3 trillion rupiah or more. We are watching the market response for possible dollar (denominated) bonds or rupiah, at this point the rupiah is likely to be more feasible," he said.
Mandiri, which has a stock market value of $8.67 billion, posted a 24.4 percent increase in net profit to 1.5 trillion rupiah in the second quarter, based on Reuters calculations.
The lender forecast loan growth of 15-18 percent in 2009, higher than the central bank's forecast of 11-12 percent.
Mandiri will select advisors for the issue from seven investment banks and securities firms already approached, but Martowardojo declined to say how many advisors would be appointed. ($1 = 9,995 rupiah)
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