Goldman, Morgan in Talks to Buy Indonesian Brokers: Sources

Jakarta Globe, September 12, 2011

Related articles

• Doubts Linger Over Impact of New Tax Holiday Scheme
• Indonesia to Require Exporters to Return Earnings
• New BI Forex Rule Is No Cause For Alarm: Analysts
• Economy: Bank Indonesia Keeps Key Rate Steady for Growth
• The Thinker: Reforming SOEs

Goldman Sachs and Morgan Stanley are each in talks to buy an Indonesian brokerage firm to expand their reach into the booming capital market of Southeast Asia’s biggest economy, sources said.

Goldman is in talks to buy Tiga Pilar Sekuritas and expects to complete the acquisition before the end of 2011 as it aims to start a local brokerage operation next year, two sources with direct knowledge of the deal told Reuters on Monday.

Goldman does not have an underwriting or broking license in Indonesia, while Morgan Stanley secured an underwriting licence in 2008, but is seeking a bigger presence through a full-fledged broker license.

Both banks plan to add research analysts as well as sales and trading staff to the brokerages next year, while Goldman could also add investment bankers, as they seek to win fees from equity offerings and debt deals, the sources said.

“I think this signals a positive view on our capital market ... It has really become an important destination for global investment banks,” said Winston Sual, who manages nearly $1 billion in funds at Panin Sekuritas in Jakarta.

“This will give more competition for fees among global bankers like JPMorgan and Credit Suisse.”

The banks’ plans in Indonesia, which has seen its stock market hit records this year on surging foreign investment, follow moves by Nomura Holdings and Citigroup to ramp up equity research teams in Jakarta this year to challenge leaders Credit Suisse and Deutsche Bank.

Investment interest in the G20 member is set to rise again next year, when Indonesia hopes to get an upgrade by Fitch Ratings to an investment grade sovereign rating that will put it alongside top emerging BRIC nations such as Brazil. 

Goldman has completed due diligence for Tiga Pilar and both parties are now negotiating the deal structure and valuation, said one of the sources, who all declined to be identified.

“Goldman has already asked Tiga Pilar to start looking for prospective staff and bankers as a precondition before they complete the deal,” said the source. No financial details were immediately available.

Officials at Tiga Pilar and Goldman declined to comment.

The Tiga Pilar deal size is likely to be small as Goldman is only seeking to buy the operating licenses that the deal will provide. It will need to at least inject the Rp 50 billion ($6 million) in license costs and required brokerage capital.

Tiga Pilar, partly owned by the family of Tan Pia Sioe, traded Rp 445 billion by stock value in the first six months of this year, ranking it 102 out of 117 active brokerages, according to stock exchange data.

The IDX composite index has jumped over 5 percent so far this year, topping the list of gainers in Southeast Asia. 

Goldman’s rival Morgan Stanley has also identified a target brokerage firm to acquire and hopes to conduct due diligence this year in order to start operations next year, said three other sources with direct knowledge of this deal.

“Talks are ongoing. It is still early to mid-phase. Morgan Stanley is talking to people,” said one of the sources. Sources declined to give the name of the target brokerage and no financial details were available.

A Morgan Stanley spokesman declined to comment. The talks are aimed at either buying a brokerage to get their seat on the stock exchange or to buy a seat from an existing brokerage, one of the sources said.

A full broking license would allow the firm to cover the secondary side of sales and trading as well as research, the source added.

Citigroup bought Indonesian brokerage Republik last year and this year added bankers and analysts, including veteran analyst Ferry Wong from Macquarie as its new head of research.

Citi was not in the top five for underwriting Indonesian equity deals last year but this year has surged up the league table to rank second among global banks, behind Deutsche.

Reuters

Related Articles:

Maligned at Home, Bakrie Group Is the Face of Indonesia Inc. Around the World

The company formed by the union of Bumi Resources and Berau
 Coal Energy is looking to acquire coal mines around the world and
become a global giant, investor Nathaniel Rothschild, left, said on Friday.

Bakrie to Run for President: Source


UK to push through tough bank reform

US 'to sue a dozen banks over housing bubble mortgages'

Garuda $500 Million IPO Kicks Off Busy Year in Indonesia

Jakarta Globe, Denny Thomas & Vikram Subhedar | January 04, 2011

Hong Kong. Flag carrier PT Garuda Indonesia launched an up to $500 million initial public offering (IPO) on Tuesday, kicking off a busy year for capital-raising in Southeast Asia's biggest economy.

A Garuda Indonesia airplane undergoes maintenance work in the
Garuda Maintenance Facility at Soekarno-Hatta International
Airport in Cengkareng, Indonesia. The flag carrier launches an up
to $500 million initial public offering (IPO) on Tuesday. (Bloomberg
Photo)

Indonesia's fast-growing economy is attracting interest from foreign investors, encouraging companies to tap equity markets.

Indonesia's benchmark share index .JKSE jumped 46 percent last year, in-part supported by $2.18 billion in foreign portfolio inflows, which was more than double the level in 2009.

Banks are also raising fresh capital to support an expected pick up in lending growth. PT Bank Mandiri Indonesia Tbk BMRI.JK, the nation's biggest lender, was raising up to $1.6 billion to support credit growth, according to a term sheet seen by Reuters.

The Indonesian government had initially planned to launch the Garuda IPO in November last year, but later delayed it for 2011.

The company aimed to list on Feb. 11, the term sheet said.

"IPOs of this size and nature will be a key feature of the industrialisation process driving ASEAN growth," said Singapore-based Geoff Howie, a sales and markets strategist at MF Global, referring to the Association of Southeast Asian Nations grouping.

"As the economic modernisation of Indonesia, Malaysia and Thailand continues, their new and existing financial assets will continue to provide investable economics," he added.

Citigroup Inc C.N and UBS AG UBSN.VX are the international book runners for Garuda's offer.

Reuters

Pertamina takeover plan confirmed

Nani Afrida, The Jakarta Post, Jakarta | Fri, 10/08/2010 10:00 AM

The government confirmed Thursday that Pertamina planned to acquire a majority stake in PT Medco Energi Internasional although the state oil and gas company has not issued an official statement on the plan.

State-Owned Enterprises Minister Mustafa Abubakar said that the state oil and gas company would take over the stake currently held by PT Encore Energy — a company owned by prominent Indonesian conglomerate Arifin Panigoro — through Pertamina subsidiary PT Pertamina Hulu Energy (PHE).

“The acquisition is now under negotiation,” he told reporters .

The minister said that the acquisition was part of PHE’s expansion program to further strengthen its oil and gas exploration and production operations.

Although Pertamina has not yet publicly announced the acquisition, Mustafa said that the state oil and gas company had reported the plan to his office and he expected negotiations would be completed before the end of the year.

Medco Energi was the first Indonesian company to operate in the oil and gas sector and has been listed on Jakarta Stock Exchange since 1994.

It has transformed itself from locally-focused company to an energy company operating throughout Indonesia and overseas, as well, with focus on oil and gas, power generation and renewable fuels.

According to the company’s 2009 financial report, Arifin’s Encore, which owns a 42.41 percent stake, is the single majority shareholder.

The public holds a 40.8 percent stake and is the second largest shareholder.

According to Bisnis Indonesia daily, Pertamina would acquire 46.41 percent stake in Medco.

Over the last three months, the firms have negotiated several cooperation agreements governing joint operations and mergers and acquisitions.

The takeover might cost Pertamina Rp 6.5 trillion (US$728 million), according to estimates.

On the acquisition, Medco Energi Internasional project director Lukman Mahfoedz declined to comment, saying that the company had not determined yet how great stake would be acquired by PHE.

“The decision will be in the hands of our company’s shareholders. I can’t comment,” he said as quoted by Bisnis Indonesia.

Pertamina corporate communications vice president Mochammad Harun said that the companies had not yet reached any agreement on the acquisition, nor on the percentage of shares to be acquired.

“When we have finished or closed the deal, we will inform the public,” he said as quoted by Republika online news portal.

Mochammad said that there were still processes that had to be completed before the company could acquire the stake officially.

He added that the company was conducting currently a study to determine which of Medco’s physical facilities could be synergized with Pertamina.

“We don’t have any deadline, because if we’re too hurried, the process can’t be optimized,” he said.

Earlier reports said that PHE postponed its initial public offering (IPO) plan this year due to the acquisition.

Medco Energi booked total revenues of $397.09 million in the first half of 2010, up 27.67 percent from $311.03 million in the same period last year.

Net profits rose 26.2 percent to $12.1 million in the first half, up from $9.6 million in the same period last year.

Revenues from oil and gas sales contributed $258.55 million to the total revenue from January to June while contracts and services provided $56.79 million, electricity and related businesses such as petroleum products contributed $30.24 million and $51.51 million, respectively. (rdf)

Indonesian Exchange Begins Trading Rupiah Palm Oil Futures

Jakarta Globe, Bloomberg & Reuters, May 21, 2010

The Indonesia Commodity and Derivatives Exchange on Friday started trading a rupiah-based palm oil futures contract aimed at setting a new benchmark and rivaling the dominant market in neighboring Malaysia.

“The ICDX is optimistic about fulfilling Indonesia’s aspiration to become the commodity price reference, especially for crude palm oil,” Megain Widjaja, president director of the exchange, said in a statement.

Indonesia is the world’s largest producer of palm oil, followed by Malaysia, where the benchmark contract is traded.

Palm oil futures in Kuala Lumpur have dropped 6.8 percent this year to 2,481 ringgit ($747) a metric ton on the Malaysia Derivatives Exchange.

The ICDX August CPO futures contract opened at Rp 7,020 per kilogram ($758 a ton).

The launch of the rupiah-based crude palm oil contract marked Indonesia’s second attempt at creating a local price benchmark to rival Malaysia’s. It won’t be easy.

The absence of regular data from Indonesia and most users’ preference for Malaysia’s pricing benchmark will also make it tougher for the Indonesian contract to gain a toehold.

Last year, global vegetable-oil dealers and Southeast Asian plantation firms cited the lack of transparency in industry data as a reason for shunning the trading of physical CPO contracts that debuted on the Jakarta Futures Exchange.

Industry officials and analysts fear the same fate could await the ICDX, even though there is demand for a benchmark price in Indonesia, whose production is expected to rise to nearly 23 million metric tons this year, outstripping Malaysia’s 18.1 million tons.

Unlike Malaysia, however, Indo nesia does not have a strong industry regulator that releases reliable data on monthly production, exports and stocks.

“It is not easy to launch a futures contract because we have to persuade people to trade here,” said Deddy Saleh, head of supervision at the ICDX. “But we expect the contract will be liquid.”

Posing an additional challenge is a plan by the CME Group, the world’s largest futures exchange, to introduce a dollar-denominated palm oil contract on Monday based on settlement of the Malaysian contract.

The trading of the new rupiah contract comes as the exchange received five new members: PT Asian Agri, PT ED and F Man Indonesia, PT Askap Futures, PT Bakrie Sumatera Plantations and PT Real Time Futures, the exchange statement said.

The existing 20 members include units of Wilmar International, the world’s largest palm oil trader, and PT Sinar Mas Agro Resources and Technology, a unit of Indonesia’s biggest producer, Sinar Mas Group. The bourse started trading gold futures on March 31.

The new contract, using the ports of Dumai and Belawan on Sumatra island as points of delivery, will be traded in 10-metric-ton lots to allow smaller local plantations to participate, Megain said.

Sumatra is the main producing region.

Trading runs from 9:30 a.m. to 5 p.m. on weekdays.

The Jakarta Futures Exchange, established in 2000, offers a palm olein contract in rupiah.

Pupuk Kaltim set to build two urea plants in North Sumatra

Nani Afrida, The Jakarta Post, Jakarta | Wed, 05/19/2010 10:57 AM

State owned fertilizer company PT Pupuk Kalimantan Timur (Pupuk Kaltim) will build two fertilizer plants and develop oil palm plantations in North Sumatra in cooperation with two state owned plantations firms PT Perkebunan Nusantara (PTPN) IV and PTPN V, the fertilizer producer’s top executive has said.

Pupuk Kaltim’s president director Hidayat Nyakman said in Jakarta on Tuesday that the three companies would soon set up a joint venture to operate the two fertilizer plants and to develop oil palm plantations which would absorb an initial investment of about Rp 500 billion (US$55 million).

Pupuk Kaltim will have a 51 percent stake in the joint venture which will be named Nusantara. PTPN IV which is based in North Sumatra, will have a 35 percent stake and PT PTPN V in Riau province will control the remaining 14 percent.

“The construction of the two fertilizer plants will cost about $18 million,” he said adding that the fertilizer factories would have a combined production capacity of 200,000 tons a year.

The joint venture will also spend up to Rp 39 billion to develop the plantations, which will cover an area of between 12,000 and 13,000 hectares, Hidayat said.

He also said that part of the fertilizer production would be used for the joint venture’s plantations, and the rest for the two plantation companies’ own plantations.

Last year, Pupuk Kaltim also established a joint venture with a state plantation company. Joint venture PT Kalianusa is developing 13,000 hectares of oil palm plantations in East Kutai, East Kalimantan.

Besides establishing new joint ventures with several state plantations, Pupuk Kaltim is also building a Nitrogen, Phosphorous, and Potassium (NPK) fertilizer plant, and a new urea plant (Kaltim V) as well as a new coal-fired power station its industrial compound in Botang, East Kalimantan.

“Those projects require Rp 11 trillion in total investment,” Hidayat said. “The projects are financed with our own funds and bank loans. We can also sell bonds if needed,” he added.

Last year, Pupuk Kaltim issued bonds worth about Rp 1.3 trillion partly to finance projects.

The company, which produces three kinds of fertilizers; urea, NPK and ammonia, expects to book net profits of Rp 1 trillion this year, higher than the Rp 832.2 billion recorded in 2009.

Pupuk Kaltim supplies two-thirds of the country’s urea fertilizer production. This year, it expects to produce about 3 million tons of urea, a slight increase over the 2.94 million tons produced in 2009.

Pupuk Kaltim expects that the new Kaltim V urea fertilizer plant will boost the company’s urea fertilizer production nationally to 3.4 million tons a year. At present total domestic consumption of fertilizer reaches about 14 million tons per year. The government predicts that by 2025 Indonesia will need about 23.2 million tons of fertilizer per year to meet growing demand.

Uno May Spend $214 Million Buying Stakes in Consumer Goods Companies

Jakarta Globe, Bambang Djanuarto & Berni Moestafa, February 15, 2010

Indonesia offers “huge potential for companies in the consumer sector," says Sandiaga Uno. (Bloomberg Photo/Dimas Ardian)

Sandiaga Uno, the second-youngest of the nation’s 30 richest people, may invest in consumer companies this year as investors’ interest shifts toward tapping household demand in Asia’s third-most-populous nation.

Uno’s PT Saratoga Investama Sedaya, which manages about $1.5 billion in assets, may spend as much as Rp 2 trillion ($214 million) to buy stakes in consumer companies, he said.

Jakarta-based Saratoga is looking at opportunities in the retail, food and beverage, and pharmaceutical industries among others, Uno said.

The private-equity firm is betting on domestic consumption in Southeast Asia’s biggest economy to boost returns. The country avoided following its neighbors into a recession after nine rate cuts by the central bank bolstered consumer spending, which accounts for about two-thirds of gross domestic product. Fourth-quarter growth was the fastest in a year at 5.4 percent.

“The demographic type of investment that relies on strong sales because of the population and the rise in the middle class has become the new theme of investment,” said Uno, 40, whose fortune is estimated at $400 million. Indonesia offers “huge potential for companies in the consumer sector.”

Growth in Indonesia’s $514 billion economy has been supported by rising consumer confidence, which according to a central bank index rose in January to near the five-year high recorded in July when President Susilo Bambang Yudhoyono was elected to a second term.

Retail-sales growth in Indonesia increased to 33.9 percent in November, the fastest pace in two years. PT Matahari Putra Prima, the country’s biggest retailer, last month sold its stake in a department-store unit for Rp 7.2 trillion, or double the unit’s share price before the deal was announced.

“We’re seriously looking into which pockets of industries still offer reasonable valuations,” Uno said. “We expect to complete an acquisition this year.”

Still, a possible increase in interest rates and under developed infrastructure may hamper investments, Uno said. Bank Indonesia on Feb. 4 kept its key interest rate at a record low of 6.5 percent for a sixth straight month to support consumer spending.

Inflation increased to 3.72 percent in January, the highest in seven months. The central bank may need to “take monetary policy action” if inflation approaches or exceeds 6 percent, Bank Indonesia Deputy Governor Hartadi Sarwono said last week.

Saratoga owns 23.15 percent of PT Adaro Energy, Indonesia’s second-biggest coal producer. The company also has investments in telecommunications and palm-oil businesses.

While Saratoga remains “bullish on coal,” finding new investment opportunities in energy-related industries has been difficult because competition among buyers has driven up the valuations of these assets, Uno said. PT Benakat Petroleum Energy said on Thursday that it signed a deal this month to buy a 37.15 percent stake in oil-services provider PT Elnusa, beating Uno’s Saratoga.

The private-equity firm plans to meet investors on a road show at the end of this year or early 2011 to raise $300 million as more foreign investors express interest in Indonesia, Uno said.

“They’re suddenly starting to look at Indonesia because the growth story is there, the political and economic stability is there,” he said.

Bloomberg

Jamsostek to expand into financial sector, healthcare service

Nani Alfrida, The Jakarta Post, Jakarta | Fri, 02/12/2010 11:22 AM

State workers’ insurance company PT Jamsostek plans to enter the financial sector, including banking, and healthcare services as part of the company’s expansion program, says a Jamsostek senior executive.

Jamsostek president director Hotbonar Sinaga said in Jakarta on Thursday the company would soon establish the investment firm, Jamsostek Investment Company (JIC), which would handle the company’s direct investments.

JIC will be established with an initial investment of Rp 1 trillion (US$107 million) and will manage all Jamsostek’s subsidiaries, he said.

Jamsostek, which at present places most funds collected from workers either in the form of savings or social and work insurance in bank deposits and portfolio investments such as bonds and equity, is also preparing to establish a reinsurance company to help mitigate the business risks of state companies, he said.

“The reinsurance firm will be established this year and will operate in cooperation with strategic partners,” he said during a hearing with the House of Representatives’ Commision IX overseeing population, health, employment and transmigration.

“In the health sector, we will acquire PT Nayaka, which provides healthcare services. At present, the company has a contract to provide healthcare services to Jamsostek members,” he said during the hearing.

“Jamsostek also plans to acquire PT Nakartrans, which provides recruitment services,” he added.

In the expansion of the banking sector, Hotbonar said the company was considering increasing its ownership in Bank Syariah Bukopin to 51 percent from the current share of 10 percent. He expected the bank could support Jamsostek’s programs to provide affordable house credits for its members.

In 2010, Jamsostek’s total investment is expected to increase by 8 percent to Rp 88.4 trillion ($9.45 billion). Jamsostek investment director Elvyn G. Massasya said the company would invest most of the funds on bonds. “We will place Rp 40 trillion or 46 percent of the total investment on bonds, mostly the government’s bonds,” Elvyn said.

According Elvyn, the government’s bonds carry fewer risks compared to corporate bonds.

Besides bonds, the company will also place about Rp 23.3 trillion of the investment funds in bank deposits, Rp 17.6 trillion in equity, Rp 4.9 trillion in mutual funds, Rp 785 billion in property and Rp 902 billion in direct investment. This year, the company expects to book investment returns totaling Rp 9.01 trillion from Rp 8.5 trillion last year. (ind)

Govt to offer bonds worth Rp4 trillion on Feb 9

Antara News, Saturday, February 6, 2010 06:42 WIB

Jakarta (ANTARA News) - The government will offer rupiah-denominated bonds of Rp4 trillion in an auction next Tuesday to meet part of financing target in the 2010 state budget, the finance ministry said.

The bonds up for the auction will have a nominal value of Rp1 million per unit, it said in a statement on Friday.

The bonds are series SPN20110210, FR0031, FR0040 and FR0052. The last three bonds are the reopening of the existing issues.

The discount rate bonds series SPN20110210 will mature on February 10, 2011.

The fixed rate bonds series FR0031 carry a coupon rate of 11 percent and will mature on November 15, 2020. Payments for the coupon will be made every May 15 and November 15.

The fixed rate bonds series FR0040 carry a coupon rate of 11 percent and will mature on November 15, 2025. Payments for the coupon will be made every March 15 and September 15.

The fixed rate bonds series FR0052 carry a coupon rate of 10.50 percent and will mature on August 15, 2030. Payments for the coupon will be made every February 15 and August 15.

The statement said the bonds will be offered in an open auction using a multi-price method.

Garuda Plans IPO This Year

The Wall Street Journal, by P.R. VENKAT

Garuda plans to increase its fleet size to 116 from 67 currently over the next five years. The company will take delivery of 24 aircraft this year.

SINGAPORE -- PT Garuda Indonesia Wednesday said it plans to go public by mid-2010 and aims to raise US$300 million through a listing in Indonesia.

Garuda Chief Executive Emirsyah Satar said in a statement that airline is close to completing its debt restructuring.

The move to clean up the national carrier's balance sheet is aimed at giving its public offering a better chance at success following several previous failed attempts by the Indonesian government to offload its stake. Garuda said earlier this month that it has reached an agreement with investors to restructure notes that were due in 2007.

The proceeds from the initial public offering will be used to fund Garuda's "long-term growth plans," Mr. Satar said.

"We have yet to determine the underwriters [for the IPO]. The IPO will either be in late second quarter or early third quarter of this year," he added.

Garuda plans to increase its fleet size to 116 from 67 currently over the next five years. The company will take delivery of 24 aircraft this year.

The fleet size will be based mainly on Boeing 737-800s and Airbus A330-300/20s, which are operated on medium- and long-haul routes.

Mr. Satar said that Garuda has converted the 10 Boeing 787 jets it ordered two years ago into Boeing 777-300E aircraft as the Indonesian carrier wasn't willing to wait out the delays in the production of the 787 plane.

"The airline will introduce the 10 Boeing 777 on new ultra long-range flights starting 2011 as it expands its international network," he said.

Garuda also said it plans to add 10 domestic routes this year and start a daily non-stop service to Amsterdam June 1.

Besides, Amsterdam, the airline is also looking to fly other European destinations such as Frankfurt, Paris, London and Rome.

"This [new international series of routes] will be launched over the next few years," he said.

Mr. Satar said that Garuda is also planning to create a separate low-cost carrier by the end of this year to meet the growing demand of domestic and short-duration travel.

"We are in the process to get regulatory approvals to establish the entity," Mr. Satar said, adding that the low-cost carrier will operate a fleet of about 20 aircraft.

Garuda currently has a low-cost carrier subsidiary called Citilink.

PP expects to raise Rp 581b from public offering

Nani Afrida, The Jakarta Post, Jakarta | Sun, 01/31/2010 6:41 PM

State construction company PT Pembangunan Perumahan (PP) has targeted to raise Rp 581 billion (US$63 million) from its initial public offering (IPO) of shares slated for early February.

Mandiri Sekurities, one of the IPO underwriters, said PP would sell 21 percent of its shares to the public, at Rp 560 each.

Mandiri Sekuritas director and head of investment banking Iman Rachman said investors had shown strong interest in the offer.

“Investors, including two foreign investors, Fidelity and Pheim Asset [Management], have expressed a strong interest in PP shares,” Iman said, adding that several domestic investment firms including PT Jamsostek had also made commitments.

Besides Mandiri Sekuritas, PP has also appointed Danareksa Sekuritas and DBS Vickers Sekurities Indonesia as underwriters.

Earlier PP had said the company would use the public money to finance its investment plan, including for projects in property, construction and the energy sectors.

Established in 1953, PP gained Rp 3.9 trillion in revenue last year.

CVC’s Venture Pays $771 Million to Acquire Matahari Store Unit

Bloomberg, by Widya Utami and Achmad Sukarsono

Jan. 25 (Bloomberg) -- Meadow Asia Company Ltd., a unit of U.K. buyout firm CVC Capital Partners Ltd., paid 7.2 trillion rupiah ($771 million) to buy the department store unit of PT Matahari Putra Prima, Indonesia’s biggest retailer.

Jakarta-based Matahari Putra sold its 90.76 percent stake in PT Matahari Department Store to Meadow, a venture it established with CVC Capital, Benjamin Mailool, president director of Matahari Putra, told reporters in Jakarta today.

Matahari Putra’s shares jumped 10.9 percent to 1,120 rupiah in Jakarta today, the biggest increase in almost two years. The retailer plans to buy a 20 percent stake in Meadow, with an option to purchase an additional 10 percent, Mailool said.

This transaction is “proof of foreign investor interest in Indonesian companies,” said Edwin Sinaga, president director of PT FinanCorpindo Nusa, a Jakarta-based brokerage firm. “The share surged as people expect a tender offer.”

Meadow will also buy another 7.24 percent stake in Matahari Department Store from shareholders, Matahari Putra said in a filing today on the Indonesia Stock Exchange. The agreement was signed on Jan. 23, the statement said.

Matahari Department’s shares surged 24 percent to 1,680 rupiah.

To contact the reporter on this story: Widya Utami in Jakarta at wutami@bloomberg.net; Achmad Sukarsono in Jakarta at asukarsono@bloomberg.net

Pertamina Shortlists Banks for $1.5 Billion Global Bond Sale

Bloomberg, by Bambang Djanuarto and Shelley Smith

Jan. 21 (Bloomberg) -- PT Pertamina, Indonesia’s state oil company, shortlisted banks to help it sell as much as $1.5 billion of global bonds.

“We’re still on track to issue a $1.5 billion global bond, but we’ll be looking at the market and the price,” Vice President Director Omar Anwar said in a phone interview from Jakarta today. “We’ve shortlisted some banks from the 20 proposed.”

Pertamina, whose profit in 2010 may rise to 20 trillion rupiah ($2.15 billion), is spending about $400 million to build two liquefied natural gas terminals in West Java and East Java. Indonesia’s President Susilo Bambang Yudhoyono, who won a second term in July in part on his promise to double spending on power plants, roads and ports, has pledged to deliver average annual economic growth of at least 6.6 percent over five years.

Pertamina said in November it planned to sell about $1 billion in dollar-denominated bonds in 2010 as it seeks to buy and develop oil fields to boost production. The company also plans to sell more than 1 trillion rupiah of bonds this year to finance capital spending, it said.

The $1.5 billion of bonds will be sold on the strength of Pertamina’s 2009 financial report, to be completed at the end of June, Anwar said.

Indonesia last week sold $2 billion of 10-year bonds at a higher yield than a sale earlier this month by the similar-rated Philippines, after scaling back the offering and canceling plans to sell 30-year debt.

To contact the reporter on this story: Bambang Djanuarto in Jakarta at bdjanuarto@bloomberg.net; Shelley Smith in Hong Kong at ssmith118@bloomberg.net.

Garuda to go public in first quarter

Antara News, Saturday, January 9, 2010 21:23 WIB

Banda Aceh (ANTARA News) - State Enterprises Minister Mustafa Abubakar said here on Saturday PT Garuda Indonesia would go public in the first quarter this year.

"Let us pray it will be warmly welcomed by investors so that the target of shares to be sold will be met," he said at the launching of an environment program held by the state-owned airline company in cooperation with International Leuser Foundation (YLI) in Aceh.

He said PT Garuda would sell 25 percent of its shares to the public to raise Rp2.5 trillion to strengthen its capital.

Mustafa expressed his appreciation to the company that had been able to achieve a four-star ranking or one grade lower for the company to get the world`s highest ranking.

"We hope PT Garuda which is under the supervision of the office of the state enterprise minister will be able to achieve the five-star status so that the public listing program will be smooth," he said at the event which was also attended by Garuda president director Emirsyah Satar and Aceh governor Irwandi Yusuf.

PT Garuda Indonesia is optimistic the initial public offering could be realized in the first semester this year.

"Right now preparations are already being done including selecting the underwriters," he said.Emirsyah meanwhile said the IPO plan was part of the company`s restructuring program to improve its performance.

The proceeds from the IPO are expected to reach US$300 million and will be used to finance additional fleets, refurbishment as well as improving services," he said.

He said the result of the IPO would be dependable upon market conditions. "We will adapt it to the domestic capital market conditions," he said.

Emirsyah said until 2014 the number of the company`s fleets would be increased to 116 units from currently 67 units. The increase in the number of fleets will be followed by a hike in routes to serve and flight frequencies to reach 3,000 flights per week from currently around 1,700 flights.

Last trade

The Jakarta Post, Wed, 12/30/2009 8:06 PM | Business

Stock brokers gather during the last stock trade in Jakarta on Wednesday. Finance Minister Sri Mulyani Indrawati said the Jakarta Stock Exchange was closed at 2,534.356 points, or up by 0.61 percent, making it one of the best in Southeast Asia. (Antara/Andika Wahyu)

PMI receives Rp1.5 B from capital market community

Antara News, Tuesday, December 29, 2009 02:38 WIB

Jakarta (ANTARA News) - The Indonesian Red Cross (PMI) has received Rp1.5 billion in aid from the Indonesian capital market community for earthquake victims in West Sumatra and Tasikmalaya.

Indonesia Stock Exchange (BEI) President Director Ito Warsito handed over the aid to new PMI Chief M Jusuf Kalla at the PMI Headquarters here on Sunday, the PMI said in a press statement on Monday.

Kalla expressed gratitude to the capital market community for trusting the PMI to channel the aid to quake victims in the two areas.

The aid would no longer be used for an emergency response phase but for a recovery one, Kalla said.

Realizing that Indonesia was highly vulnerable to natural disasters, the nation must keep watch against various natural disasters, particularly those caused by human activities, he said.

The one-time president said the PMI had committed itself to providing maximum services to victims of natural disasters by training more volunteers to achieve the goal.

"To that end, we will always cooperate with all partners to support the PMI`s activities," he said.

Ito Warsito meanwhile said his side had chosen PMI to channel the humanitarian aid because the agency had a better knowledge of the quake victims` needs, and was quick in channeling aid.

PMI data show the agency has so far channeled aid to 25,020 families and distributed more than 4 million liters of clean water among quake victims in West Sumatra.

An earthquake measuring 7.6 on the Richter scale rocked West Sumatra province on September 30 this year, killing more than 1,100 people and injuring thousands of others.

Only three state firms to go public in 2010

Nani Afrida, The Jakarta Post, Jakarta | Tue, 12/15/2009 8:10 PM

State Enterprises Minister Mustafa Abubakar confirmed Tueday that only three state companies — construction company PT Pembangunan Perumahan, flag carrier PT Garuda Indonesia and steel maker PT Krakatau Steel — qualified for privatization through an initial public offering (IPO) in 2010.

PT Pembangunan Indonesia would be privatized in the first semester of 2010, while Garuda Indonesia and Krakarau Steel in the second semester, Mustafa said.

“Garuda will go public in the middle of 2010, probably in June, while Krakatau Steel will follow in the second semester,” he said.

He said the government would also watch the condition of the steel market, particularly after the ASEAN-China Free Trade Agreement (FTA) takes effect on Jan. 1, 2010, before deciding on when Krakatau Steel could go public.

Mustafa acknowledged that the FTA would influence domestic steel prices, as steel imported from China would be cheaper than Krakatau's.

“We have to see how the FTA progresses, and then we can talk about the Krakatau IPO,” he said.

Mustafa also confirmed that the government would delay the privatization of state plantation firms PT Perkebunan Nusantara (PTPN) III, PTPN IV and PTPN VII. The privatization of these companies through IPOs was previously slated for next year.

“These companies still need support from the government,” he said.

Related Article:

Garuda FRN buyback flops as IPO looms

EMP plans $196m investment in 2010

The Jakarta Post, Jakarta | Tue, 12/15/2009 10:09 PM

PT Energi Mega Persada (EMP), the nation’s second-largest publicly listed oil company, is targeting capital spending of US$196 million in 2010, derived mostly from a planned rights issue to commence in January.

The rights issue is expected to raise Rp 4.8 trillion ($502 million) in proceeds.

Of that amount, EMP vice president for capital markets Herwin H. Hidayat said Tuesday, $111 million would be used to help finance the company’s capital expenditure, while the rest would come from EMP’s internal cash flow.

“The capital spending will be allocated for operating expenditure for all our operating blocks,” EMP president director Imam P. Agustino said during a public exposé in Jakarta.

He added the company was also looking to acquire more assets in Indonesia and abroad, but did not elaborate.

EMP’s blocks, which include the Kangean block, Malacca block and several others, produce a total of 13,000 barrels of oil per day (bpd) and 88 million standard cubic feet of gas per day (MMSCFD).

“Thirty to 50 percent of the capital expenditure will be spent on the Kangean and Malacca blocks,” Herwin said.

He added the money generated from the planned rights issue “would change the faith of the company” that has seen year after year of losses. (adh)

Online Transactions to Increase Fivefold

Tempo Interactive, Monday, 14 December, 2009 | 15:34 WIB

TEMPO Interactive, Solo:The Indonesia Stock Exchange is targeting a fivefold increase on online transactions next year. The present capacity is one million orders for daily transactions. “This is to anticipate additional members who will perform more online transactions,” said Director of Trade and Stock Exchange Member Management, Wan Wei Yiong in Solo, Central Java, on Saturday.

Although they are anticipating an increase, the stock exchange authority will not require securities companies to perform online transactions. The stock exchange authority will only provide facilities to brokers who use them. An average transaction of Rp. 3.75 trillion daily takes place.

According to Wan, the stock exchange authority will prepare a system that will allow a customer to perform an online transaction independently. But securities companies cannot shake off their responsibilities: they are obligated to apply risk management principles and to know their clients. “Brokers cannot shun responsibilities if something out of the ordinary occurs,” he said.

Regulations concerning online transactions are currently being discussed with stock market regulator Bapepam.

famega Syavira

BTN to sell stock at Rp800 per share

Antara News, Friday, December 4, 2009 19:06 WIB

Jakarta (ANTARA News) - State-owned Bank Tabungan Negara (BTN) plans to sell its shares at the Indonesia Stock Exchange on December 17, 2009 at a price of Rp800 per share, vice president director Evi Firmansyah said.

She said in a press statement on Friday that the price was set through a careful process by considering various significant aspects involved.

The price was also set through a meeting between the office of the state enterprises minister, the BTN management and the underwriters, namely PT Mandiri Sekuritas and PT CIMB Securities on December 3.

"The price of the BTN shares is set at Rp800 per share while the number of shares to be issued is 2.36 billion," she said.

She said the proceeds would be used to strengthen the company`s capital for future expansion.

The number of shares to be sold is equal to 27.08 of the bank`s shares with 24.48 percent of it for the public and 2.60 percent for the MSOP program.

The price offered is between 1.5 and 2.2 of the book value namely between Rp750 and Rp1.100 per unit.

Sixty-percent of buyers will be local investors while the rest are foreigners, she said.

She said she hoped the proceeds would improve the bank`s capital adequacy ratio from 15.04 percent to 27 percent.

"So, the company`s capital would increase from Rp3.4 trillion to Rp5 trillion to make the leverage for credit distribution to Rp60 trillion," she said.

She said the roadshows that had been carried out so far had been successful not only in the country`s big cities but also in overseas cities such as Singapore, Kuala Lumpur, Hong Kong, Frankfurt, Amsterdam, London and Edinburgh.

She said based on them it was seen that BTN shares had attracted a big interest from foreign investors.

Strong Demand in Indonesia For 2009’s Biggest IPO

The Jakarta Globe

The country’s biggest initial public offering this year, by state-owned PT Bank Tabungan Negara, has been massively oversubscribed, State Owned Enterprises Minister Mustafa Abubakar said on Friday.

BTN, the country’s largest home loan creditor, is offering 2.36 billion shares to the public, amounting to 27 percent of its equity. The share price has been set within a range of Rp 750 to Rp 1,100 (8 cents to 11 cents) per share, meaning BTN will raise between Rp 1.8 trillion and Rp 2.6 trillion.

The IPO attracted Rp 3.5 trillion of subscriptions, Mustafa said.

“BTN’s offer has been well received by potential investors during the road show,” he said.

BTN will offer the shares to investors on the primary market on Thursday and Friday, followed by a listing on the Indonesia Stock Exchange (IDX) on Dec. 17.

The state-owned bank has allocated 60 percent of the stock offered to local companies, with international buyers allocated the remaining 40 percent.

Several large investors have already committed to purchase sizeable stakes, Mustafa said.

“PT Jamsostek [a state-owned social security provider] is one of the biggest buyers of the BTN stock. We welcomed Jamsostek’s move because it will be positively accepted by local investors,” he said.

Jamsostek manages funds worth about Rp 78 trillion.

“The Government of Singapore Investment Corporation is one of the potential large international buyers,” Mustafa said.

The Singaporean government’s global investment management company manages around $100 billion. It invests in equities, fixed income, natural resources, treasury and currencies, real estate, and infrastructure.

BTN’s IPO has been delayed for several years as it waited for approval from the House of Representatives, which it received last year.

The bank said in a statement that all of the proceeds from the IPO would be used to support lending expansion in the coming years.

“This year we expect credit growth of 25 percent, while next year we hope it will grow by 20 percent,” said Iqbal Latanro, president director of BTN.