Decemeber 2015 2nd Week

21 december 2015

Categories : IR Weekly Review


  • MACRO
      • The plan of the US central bank, the Federal Reserve hoisted the benchmark rate on 14-15th December 2015 meeting directly affected the United States dollar (US). In fact, the US dollar was believed to be increasingly powerful until next year. The signals were captured after the world's major banks such as Deutsche Bank, Barclays, Morgan Stanley, BPNP Paribas, Credit Suisse, UBS Group AG, BNP Paribas and Goldman Sachs hunted dollar transactions up to US $ 5.3 trillion per day in the currency market. Referring to Bloomberg Dollar Spot Index this year, in fact the US dollar has gained 8%. Last year, the US dollar gained 11%. Since October 2015, the rate of the US dollar rose after the Fed signaled the increased interest in this week's meeting. Rampant poaching of the US dollar could cause erode Indonesian rupiah. That burden came from the high external risks such as the European Central Bank's monetary measures, the Chinese economy and the chance of the increased of the Fed’s interest rate in the next stage.
      • People's Bank of China (PBoC), on Wednesday (09/12/2015) re-cut the value of the yuan to a level of US $ 6.42 per dollar after earlier pegged the yuan central rate at US $ 6.4 per dollar. The value has dropped 0.5 percent since entering the yuan as IMF special drawing rights with other currencies that have become prior international currencies. Yuan devaluation made the price of goods that made in China cheaper, so it would increase the export of the country. CNNMoney reported, People’s Bank of China (PBoC) on December 7th 2015, reported only had foreign exchange reserves about US$ 3.4 trillion. The lowest level since early November 2013. Yuan devaluation made the most of market participants suspected China's economic slowdown was deeper than expected. In fact, it may be lower than the economic growth rate that was promulgated. In the third quarter of 2015, the Chinese economy was recorded a growth of 6.9 percent (year on year). It decreased 0.1 percent compared to the previous quarter.
      • Reviews :
        The impact of the increase in Fed Rate is the interest of both loans and deposits in the banks and other financial institutions can also ride. If the deposit rates in the banks within the United States rise, then interest bonds that are issued by companies in the United States usually also will go up. It will attract the investors from all over the world to place their funds in the US market, which impact the flight of investment from domestic to overseas.
  • MICRO
      • Indonesia Stock Exchange (IDX) recorded proceeds of corporate action in the capital markets throughout 2015 reached Rp. 115,35 trillion or increased 19.36 percent compared with the previous year, which amounted Rp96,64 trillion. "Total funds obtained from corporate action in the capital market consists of the IPO’s recording, the issuance of new shares (rights issue), the issuance of warrants, as well as from the issuance of bonds and cooperative’s sukuk (certificate)," said the Head of Corporate Communications of Indonesia Stock Exchange (BEI) Dwi R. Shara Shinta Sukarno in a press release in Jakarta, Sunday (13/12/2015). He detailed the company's funds acquisition from the corporate action through IPO equaled to Rp9,10 trillion, the issuance of new shares amounted to Rp45,85 trillion, the issuance of bonds and cooperative’s sukuk (certificate) reached Rp59,62 trillion, while issuance of warrants amounted to Rp. 780 billion.
      • The Financial Services Authority (FSA) would expand the role of finance, underwriting, pawnshops, venture capital’s companies and Indonesian export financing institutions in financing priority sectors by establishing a working group (POKJA). These six working groups would also involve local governments and related ministries. The working group, according to Chairman of the Board of Commissioners FSA Muliaman D Hadad was formed because all this time many programs in the priority sectors were hindered by lack of financing from the state budget. "FSA is about to launch the working group by involving the ministries. All this time there are many programs at the ministry but stuck in the financing, "Hadad said in Jakarta, Friday, December 4, 2015. Six working groups that include agriculture, animal husbandry, horticulture, tourism, highways and electricity. According to Hadad, the working groups would soon be launched in the near future.
      • Reviews :
        The impact of slowing economic growth in Indonesia where the purchasing power tends to weaken, government spending and exports and imports faltered, leading to market expectations for economic growth in Indonesia fall. On the other hand, financial releases which are issued by issuers do not match market expectations. This results in a decline correction in capital market, which is affecting JCI (IHSG).
  • BANKING
      • The unification of Automatic Teller Machine (ATM) four banks of State-Owned Enterprises (SOE), PT Bank Mandiri Tbk, PT Bank Rakyat Indonesia Tbk, PT Bank Negara Indonesia Tbk, and PT Bank BTN Tbk begin to see a bright spot. The joint ATM that named link will be launched this weekend (16/12/2015) in the market (Pasar) of Tanah Abang. The unification of the four state-owned bank's ATM will make customers become efficient in conducting transactions, where customers can make transactions via ATM anywhere at the same rates.
      • Bank Mandiri Tbk revalued its assets to strengthen its capital so as to increase the contribution in accelerating the pace of economic growth, "Step of Bank Mandiri to revalue these assets does not affect the 'cash flow' of the company. In fact, this step can strengthen the company's capital so that it can increase the contribution in accelerating the rate of economic growth in the future, "said Director of Finance and Strategy Bank Mandiri Kartika Wirjoatmodjo in a press release in Jakarta, Friday (12/11/2015). He noted that of the estimated results of revaluation conducted by Bank Mandiri in December 2015, the fixed assets of the Bank in 2016 was expected to rise about Rp23 trillion. "With the revaluation, we estimate that the capital adequacy ratio or (CAR) of Bank Mandiri will reach around 20 percent by 2016 so as to be able to meet the capital requirements in accordance with Basel III," he said. This revaluation, Kartika Wirjoatmodjo continued, the Bank would deposit the payment of the initial estimate of taxes on revaluation amounted to Rp693 billion, which supported the government's efforts to meet the budget requirements for development. "We hope, through this revaluation of the Bank can further enhance the role in driving the economy of Indonesia towards much better, and is able to become a friend of the country in developing within," he said.
      • Reviews :
        The advantage of the assets revaluation is the bank's capital decreases, which means that the capital adequacy ratio (CAR) also increases, which means that banks will have much ability to lend and will increase profitability.

Disclaimer : This document is for informational purposes only and obtained from a variety of reliable sources, but is not a guarantee the accuracy or completeness and should not be relied on completely. The above conditions may be changed at any time. Forbidden to rewrite anything without written permission from The East Java Regional Development Banks