HONG KONG, Jan 21 (Reuters) - PT Bank Danamon Tbk (BDMN.JK), Indonesia's fifth-largest lender, has tapped investment banks Citigroup (C.N) and Morgan Stanley (MS.N) to help it raise several hundred million dollars in a rights offering, two people familiar with the matter said on Wednesday.
Danamon officials were not immediately available for comment. Citigroup and Morgan Stanley both declined to comment.
Wednesday, January 21, 2009
Indonesia's Bank Muamalat plans rights issue in H2
JAKARTA- Indonesian Islamic lender PT Bank Muamalat is planning a rights issue in the second half of 2009 to raise its capital adequacy ratio (CAR), the bank said on Monday.
The bank -- whose total assets rose 20 percent to 12.67 trillion rupiah ($1.14 billion) last year -- said it aims to increase its capital adequacy ratio to about 12 percent in 2009 from around 10.8 percent last year.
"The lower CAR is the consequence of our financing growth in 2008...Although the central bank regulates a minimum CAR level of 8 percent, the management considers a CAR level of 12 percent is needed to become a good bank," M. Hidayat, a director at the bank, told reporters.
The official said the rights issue could take place in the second half of the year, but did not give a value.
Muamalat, majority owned by Islamic Development Bank (IDB), recorded a 39 percent rise in its operating profit to 308 billion rupiah in 2008. It also aims to increase financing by 10 percent this year, compared to 22 percent financing growth in 2008.
Indonesia's first sharia bank said it would maintain 60-70 percent of its financing disbursement to small and medium enterprises (SMEs), citing their ability to weather the current global crises.
Under sharia or Islamic law, interest is banned and income must be derived from a fundamental economic transaction such as trade in goods and services, direct investment in a business, or renting out property.
The world's most populous Muslim country, however, has lagged behind neighbours Singapore and Malaysia in developing its Islamic finance industry. Around 85 percent of the population of 226 million people is Muslim.
The central bank said on its website (www.bi.go.id) its target for sharia banking was for total assets of 50 trillion rupiah and 87 trillion rupiah in 2008 and 2009 respectively. As of November, total assets for sharia banking stood at 47.2 trillion rupiah.
The bank -- whose total assets rose 20 percent to 12.67 trillion rupiah ($1.14 billion) last year -- said it aims to increase its capital adequacy ratio to about 12 percent in 2009 from around 10.8 percent last year.
"The lower CAR is the consequence of our financing growth in 2008...Although the central bank regulates a minimum CAR level of 8 percent, the management considers a CAR level of 12 percent is needed to become a good bank," M. Hidayat, a director at the bank, told reporters.
The official said the rights issue could take place in the second half of the year, but did not give a value.
Muamalat, majority owned by Islamic Development Bank (IDB), recorded a 39 percent rise in its operating profit to 308 billion rupiah in 2008. It also aims to increase financing by 10 percent this year, compared to 22 percent financing growth in 2008.
Indonesia's first sharia bank said it would maintain 60-70 percent of its financing disbursement to small and medium enterprises (SMEs), citing their ability to weather the current global crises.
Under sharia or Islamic law, interest is banned and income must be derived from a fundamental economic transaction such as trade in goods and services, direct investment in a business, or renting out property.
The world's most populous Muslim country, however, has lagged behind neighbours Singapore and Malaysia in developing its Islamic finance industry. Around 85 percent of the population of 226 million people is Muslim.
The central bank said on its website (www.bi.go.id) its target for sharia banking was for total assets of 50 trillion rupiah and 87 trillion rupiah in 2008 and 2009 respectively. As of November, total assets for sharia banking stood at 47.2 trillion rupiah.
NZ expands PT Panin Bank stake in A$166 million deal
ANZ has continued its Asian expansion by increasing its stake in PT Panin Bank, a major player in the Indonesian market.
It has acquired a further 8.4% of Panin in a deal worth $US114 million ($A166 million), bringing its total interest in the company to 38.3%.
ANZ chief executive officer Asia Pacific Alex Thursby says the increase in ANZ’s shareholding reflects ANZ’s commitment to the partnership with Panin and to growth in Indonesia.
“Indonesia is a key market in ANZ’s growth strategy in Asia and Panin is one of ANZ’s longest standing and largest strategic partnerships in the region,” Mr Thursby says.
“This increased shareholding recognises the strong position of Panin and the opportunities offered by a well-run bank with strong management and underlying fundamentals that supports its business plan.”
The shares in Panin were acquired by ANZ off-market from institutional investors.
ANZ has been a shareholder in Panin, Indonesia’s seventh biggest bank, since 1999, and the two companies also have a joint venture, PT ANZ Panin Bank, that dates back to 1993.
ANZ chief executive Mike Smith has emphasised the importance of expanding into Asia to increase the bank’s profits.
The bank has made a goal of being a “super regional” bank in Asia by 2012, with the region contributing 20% of the group’s earnings.
Last October ANZ announced it would be expanding its Vietnam operation, establishing a head office in Sun City in Hanoi and at least four branches and transaction offices in Hanoi and Ho Chi Minh City, with more to come this year.
News of the Panin deal has had little effect on ANZ’s share price, which has fallen 32c to $A14.76 amid fears the ongoing US banking crisis will have a flow-on effect on Australian banks’ profitability.
It has acquired a further 8.4% of Panin in a deal worth $US114 million ($A166 million), bringing its total interest in the company to 38.3%.
ANZ chief executive officer Asia Pacific Alex Thursby says the increase in ANZ’s shareholding reflects ANZ’s commitment to the partnership with Panin and to growth in Indonesia.
“Indonesia is a key market in ANZ’s growth strategy in Asia and Panin is one of ANZ’s longest standing and largest strategic partnerships in the region,” Mr Thursby says.
“This increased shareholding recognises the strong position of Panin and the opportunities offered by a well-run bank with strong management and underlying fundamentals that supports its business plan.”
The shares in Panin were acquired by ANZ off-market from institutional investors.
ANZ has been a shareholder in Panin, Indonesia’s seventh biggest bank, since 1999, and the two companies also have a joint venture, PT ANZ Panin Bank, that dates back to 1993.
ANZ chief executive Mike Smith has emphasised the importance of expanding into Asia to increase the bank’s profits.
The bank has made a goal of being a “super regional” bank in Asia by 2012, with the region contributing 20% of the group’s earnings.
Last October ANZ announced it would be expanding its Vietnam operation, establishing a head office in Sun City in Hanoi and at least four branches and transaction offices in Hanoi and Ho Chi Minh City, with more to come this year.
News of the Panin deal has had little effect on ANZ’s share price, which has fallen 32c to $A14.76 amid fears the ongoing US banking crisis will have a flow-on effect on Australian banks’ profitability.
SOERYADJAYA FAMILY TO TAKE OVER INDONESIAN BANK IFI
JAKARTA-
The family of William Soeryadjaya is taking 99 per cent of Indonesian PT Bank IFI, re-entering the banking sector after 16 years.
The family stopped business in the banking sector when its bank, Summa Bank, collapsed in 1992 when non-performing credits forced it to sell its stake in Indonesia's largest automotive company PT Astra International, which the family founded.
The family formed a consortium with the family of Sabar Ganda Sitorus, a business tycoon from North Sumatra to take over Bank IFI, Bank Indonesia deputy governor Siti CH. Fadjrijah said.
Bank IFI director Agus Suyanto said shareholders in the bank agreed to sell their stake and the acquisition was being processed.
Sabar Sitorus told that the agreement was signed two weeks ago but the price was still being negotiated.
The family of William Soeryadjaya is taking 99 per cent of Indonesian PT Bank IFI, re-entering the banking sector after 16 years.
The family stopped business in the banking sector when its bank, Summa Bank, collapsed in 1992 when non-performing credits forced it to sell its stake in Indonesia's largest automotive company PT Astra International, which the family founded.
The family formed a consortium with the family of Sabar Ganda Sitorus, a business tycoon from North Sumatra to take over Bank IFI, Bank Indonesia deputy governor Siti CH. Fadjrijah said.
Bank IFI director Agus Suyanto said shareholders in the bank agreed to sell their stake and the acquisition was being processed.
Sabar Sitorus told that the agreement was signed two weeks ago but the price was still being negotiated.
Saturday, January 10, 2009
Danamon: Indonesian Rupiah May Rise 7% on Slowing Imports
The currency will also strengthen as investors become more willing to take risk as the credit crisis wanes in 2009, Helmi Arman, an economist in
“Exports may contract, but imports could also shrink to a larger magnitude, thereby providing some cushion,” said Helmi, confirming the contents of a research report sent to clients yesterday. “The de-leveraging by global investors is not going to go on forever.”
PT Bank Danamon, which is controlled by
‘Not Groundless’
The rupiah reached a decade low of 13,150 in November as a global recession deterred investment in emerging-market assets.
Bank
“Such concerns are not groundless, but we think the accompanying fall in imports is likely to prevent the current account going deep into negative territory,” Helmi wrote in the report. “What we have in mind is a widening of the current- account surplus from 0.1 percent of GDP in 2008 to 1 percent of GDP in 2009.”
Friday, January 9, 2009
Indonesia Central Bank Cuts Rates, Sees Room to Ease Again
JAKARTA-
Indonesia's central bank slashed interest rates more than expected on Wednesday and said it may cut again to spur economic growth, just days after the government announced a US$ 6.6 billion fiscal stimulus package.
The half-point cut aims to soften the impact of the global crisis on Southeast Asia's biggest nation, where economic growth, prices, jobs and poverty will be among the key issues for voters in elections later this year.
Bank Indonesia cut its benchmark interest rate by 50 basis points to 8.75 percent, compared to a 25 basis point move predicted by economists in a Reuters poll.
"The risk from inflationary pressure is milder compared to the risk concerning economic activity, therefore the move needed to be effective and we decided to go ahead with a 50 basis point cut," Bank Indonesia Deputy Governor Hartadi Sarwono told a news conference.
"With regards to the possibility of lowering the BI rate further, there is still room. But it all depends on inflation and economic conditions," he said.
Inflation has fallen from a September peak of more than 12 percent to just above 11 percent in December and the government expects it to drop into single digits in mid-2009.
The central bank said economic growth this year would slow to between 4 and 5 percent from an estimated 6.2 percent in 2008.
That would still make Indonesia one of Asia's top performers, but economists say it needs to grow by 6 percent a year to absorb the many of its 226 million population who reach working age each year.
Economists said Wednesday's move that followed a quarter-point cut in December should support government efforts to prop up the economy and saw more cuts before the end of the first quarter.
"This will definitely help the government's planned stimulus package," said Gundy Cahyadi, an economist at IDEAglobal in Singapore.
CREAKING INFRASTRUCTURE
The stimulus, which includes plans to spend on roads, ports, airports and railroads, is intended to create jobs and reduce business costs due to the country's creaking infrastructure.
"The rate cut will provide a stimulus to the economy. But the key lies in the fiscal policy, as well," said Eric Sugandi of Standard Chartered Bank in Jakarta.
"As Indonesia's economy is mostly driven by domestic consumption, now it's up to how the government sustains the purchasing power of households."
The finance ministry welcomed the rate cut, saying it should support government bonds.
"We see the prices of government bonds in the last two days have been increasing. We are optimistic it will be better in the future," treasury director Rahmat Waluyanto said.
The ministry on Wednesday said it planned to sell retail sukuk, or Islamic, bonds next month, and a yen-denominated bond issue, possibly around the middle of the year.
Anggito Abimanyu, head of fiscal policy at the finance ministry, said the government aims to get approval for standby loans of about $5.5 billion in the first quarter.
The loans, from the World Bank, Asian Development Bank, and some donor countries, would be used if the government cannot meet its debt issuance target.
With the global economy rapidly losing steam and the world's top economies already in a recession, other central banks in Asia have also been slashing borrowing costs to support faltering growth.
The Reserve Bank of India cut its benchmark rate by 1 percentage point on Jan. 2, while the Bank of Korea is expected to follow suit with a half percentage point cut on Jan. 9.
Investors pulled out of emerging markets like Indonesia late last year, in response to the global financial crisis, leading to a sharp drop in Indonesian stocks, bonds and the currency, which hit a decade low near 13,000 per dollar.
Analysts said lingering concerns about the rupiah may limit the scope for further rate cuts, even though the currency gained after the rate decision to 10,700 to the dollar from 10,850, reflecting market optimism about the growth outlook.
Indonesia's central bank slashed interest rates more than expected on Wednesday and said it may cut again to spur economic growth, just days after the government announced a US$ 6.6 billion fiscal stimulus package.
The half-point cut aims to soften the impact of the global crisis on Southeast Asia's biggest nation, where economic growth, prices, jobs and poverty will be among the key issues for voters in elections later this year.
Bank Indonesia cut its benchmark interest rate by 50 basis points to 8.75 percent, compared to a 25 basis point move predicted by economists in a Reuters poll.
"The risk from inflationary pressure is milder compared to the risk concerning economic activity, therefore the move needed to be effective and we decided to go ahead with a 50 basis point cut," Bank Indonesia Deputy Governor Hartadi Sarwono told a news conference.
"With regards to the possibility of lowering the BI rate further, there is still room. But it all depends on inflation and economic conditions," he said.
Inflation has fallen from a September peak of more than 12 percent to just above 11 percent in December and the government expects it to drop into single digits in mid-2009.
The central bank said economic growth this year would slow to between 4 and 5 percent from an estimated 6.2 percent in 2008.
That would still make Indonesia one of Asia's top performers, but economists say it needs to grow by 6 percent a year to absorb the many of its 226 million population who reach working age each year.
Economists said Wednesday's move that followed a quarter-point cut in December should support government efforts to prop up the economy and saw more cuts before the end of the first quarter.
"This will definitely help the government's planned stimulus package," said Gundy Cahyadi, an economist at IDEAglobal in Singapore.
CREAKING INFRASTRUCTURE
The stimulus, which includes plans to spend on roads, ports, airports and railroads, is intended to create jobs and reduce business costs due to the country's creaking infrastructure.
"The rate cut will provide a stimulus to the economy. But the key lies in the fiscal policy, as well," said Eric Sugandi of Standard Chartered Bank in Jakarta.
"As Indonesia's economy is mostly driven by domestic consumption, now it's up to how the government sustains the purchasing power of households."
The finance ministry welcomed the rate cut, saying it should support government bonds.
"We see the prices of government bonds in the last two days have been increasing. We are optimistic it will be better in the future," treasury director Rahmat Waluyanto said.
The ministry on Wednesday said it planned to sell retail sukuk, or Islamic, bonds next month, and a yen-denominated bond issue, possibly around the middle of the year.
Anggito Abimanyu, head of fiscal policy at the finance ministry, said the government aims to get approval for standby loans of about $5.5 billion in the first quarter.
The loans, from the World Bank, Asian Development Bank, and some donor countries, would be used if the government cannot meet its debt issuance target.
With the global economy rapidly losing steam and the world's top economies already in a recession, other central banks in Asia have also been slashing borrowing costs to support faltering growth.
The Reserve Bank of India cut its benchmark rate by 1 percentage point on Jan. 2, while the Bank of Korea is expected to follow suit with a half percentage point cut on Jan. 9.
Investors pulled out of emerging markets like Indonesia late last year, in response to the global financial crisis, leading to a sharp drop in Indonesian stocks, bonds and the currency, which hit a decade low near 13,000 per dollar.
Analysts said lingering concerns about the rupiah may limit the scope for further rate cuts, even though the currency gained after the rate decision to 10,700 to the dollar from 10,850, reflecting market optimism about the growth outlook.
Indonesia set rules for commodity exports, protects currency
JAKARTA-
Indonesia will require commodities exporters to use letters of credit issued by local banks in future, to make sure that foreign exchange remains onshore, the trade minister said on Friday (9/1).
Indonesia has taken several steps to try to reduce capital outflows and lessen the impact of a world economic crisis.
The latest moves would force exporters to keep the foreign currency proceeds with a bank onshore, where the money would be subject to restrictions such as how much can be converted and transferred offshore.
"The regulation aims at keeping the flow of foreign exchange revenue fast and smooth," said Trade Minister Mari Pangestu.
Exporters of coffee, crude palm oil, cocoa, rubber and mineral products, including refined tin, must use letters of credit starting from March 5, the minister said.
"Letter of credit proceeds must go through and must be received by onshore banks," Pangestu told reporters.
"The requirement will also guarantee that exporters receive payment from buyers," she said, referring to cases where buyers have refused to pay on the arrival of a shipment because the commodity price has fallen.
Indonesia is one of the world's main producers of palm oil, rubber, coffee, cocoa, tin, nickel and coal. Prices for commodities including crude palm oil and tin have tumbled from their peaks due to weaker demand.
Many Indonesian exporters have cancelled shipments of commodities, including palm oil and rubber, after buyers failed to pay up because of the sliding in prices.
Indonesia will require commodities exporters to use letters of credit issued by local banks in future, to make sure that foreign exchange remains onshore, the trade minister said on Friday (9/1).
Indonesia has taken several steps to try to reduce capital outflows and lessen the impact of a world economic crisis.
The latest moves would force exporters to keep the foreign currency proceeds with a bank onshore, where the money would be subject to restrictions such as how much can be converted and transferred offshore.
"The regulation aims at keeping the flow of foreign exchange revenue fast and smooth," said Trade Minister Mari Pangestu.
Exporters of coffee, crude palm oil, cocoa, rubber and mineral products, including refined tin, must use letters of credit starting from March 5, the minister said.
"Letter of credit proceeds must go through and must be received by onshore banks," Pangestu told reporters.
"The requirement will also guarantee that exporters receive payment from buyers," she said, referring to cases where buyers have refused to pay on the arrival of a shipment because the commodity price has fallen.
Indonesia is one of the world's main producers of palm oil, rubber, coffee, cocoa, tin, nickel and coal. Prices for commodities including crude palm oil and tin have tumbled from their peaks due to weaker demand.
Many Indonesian exporters have cancelled shipments of commodities, including palm oil and rubber, after buyers failed to pay up because of the sliding in prices.
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