Government cancels Islamic bond issuance

as published in Bisnis Indonesia daily newspaper

Wednesday, 14/10/2009 00:00 WIB

Government cancels Islamic bond issuance

JAKARTA: The government didn't absorb at all subscription made by the bidders at the auction for Islamic T-bond series IFR003 and IFR004 yesterday, leading to the cancellation of the bond issuance. The amount of subscription to the Islamic T-bonds reached IDR5.08 trillion.

The government planned to issue two Islamic T-bonds series IFR003 and IFR004 through auction yesterday and targeted to raise IDR1.5 trillion fund. IFR003 is a six-year bond, while IFR004 is an 11-year bond. Previously, the government issued Islamic T-bond series IFR001 and IFR002 last year through book building.

Director General of Debt Management Office at the Ministry of Finance Rahmat Waluyanto revealed the government didn't absorb the subscription since the average yield asked was above the yields of T-bonds in the secondary market.

"We have some reasons for not absorbing the subscription. One of the reasons is the relatively higher cost due to the high yield asked," he explained yesterday.

At the auction, the bidders recorded a total subscription of IDR5.08 trillion. The lowest and highest yields they asked for Islamic bond series IFR003 are 9.75% and 11.5%, respectively, while the lowest and highest yields they asked for Islamic bond series IFR004 are 10.5% and 12%, respectively.

Albeit declining to expose the yield expected by the government, Rahmat admitted the bid made by the Islamic financial industry was relatively smaller than that made by the conventional one.

He hoped the next auction would be able to attract more interests from the Islamic financial institutions.

According to Rahmat, the government was not worried with the cancelled bond issuance since T-bond issuance this year had reached 90% of the target. In addition, he inserted, the government had other debt instruments, such as Indonesian hajj [pilgrimage to Mecca] fund certificate (SDHI) and standby loan.

Director of Islamic Financing at the Ministry of Finance Dahlan Siamat said the government still intended to put into auction similar Islamic bonds this year.

According to him, auction enabled the government to save more money compared to bookbuilding.

Dahlan also admitted many market players asked the government to put into auction the Islamic bond already issued, so that Islamic debt securities trading in the secondary market would be more upbeat. However, he added, the government could not grant the request since Islamic T-bond series IFR001 and IFR002 prices in the secondary market had been too high.

"We cannot sell the bonds if the prices have already been too high in the market. If we force to sell the bonds, it will affect the already good price in the market." (Bisnis/21)

PP Issues Bonds worth IDR125 Billion

Selasa, 13/10/2009 00:00 WIB

PP Issues Bonds worth IDR125 Billion

JAKARTA: PT Pembangunan Perumahan (PP) issues medium-term notes (MTN) IX B/2009 worth IDR125 billion, which will mature in February 2011.

Corporate Secretary of PP Betty Ariana revealed the company appointed publicly listed PT Trimegah Securities Tbk to underwrite the bond issuance. However, he declined whether PP would issue another similar instrument this year.

Data by PT Kustodian Sentral Efek Indonesia yesterday showed PP would pay the coupon to the investors once every three months. The first coupon payment will be made on November 15.

PP issued two-year MTN IX A/2009 worth IDR50 billion at the end of last month. Betty stated the company had yet decided whether it would delay or realize the issuance of a similar instrument this year.

Concerning its initial public offering (IPO), the company confirms the government will still hold a 51% stake in the company.

"We will try to make the government still the majority shareholder of the company since this is part of the things we agree to with the House," explained President Director of PP Musyanif to the press yesterday.

He informed the company was only permitted by the House to divest a 30% stake maximum. According to him, the government at the moment controls a 51% stake in PP, while employee cooperative and PP employees seize a 49% stake.

PP appoints the consortium of PT Mandiri Sekuritas, PT Danareksa Sekuritas, and PT DBS Vickers Securities Indonesia to underwrite the IPO. The company and the underwriter plan to do a roadshow to several countries, such as Hong Kong and Singapore, to market the shares.

He exposed the company plans to switch the company's business focus from the construction sector to the infrastructure investment sector after the IPO. "We will receive two incomes, namely income from infrastructure projects and income from our position as one of the shareholders in the infrastructure consortium."

He added revenues from housing construction activities only represented less than 3% of the company's total revenues, while the rest was contributed by infrastructure projects. The company last year booked IDR285 billion in earnings and is working on projects worth IDR4 trillion at the moment. (Bisnis/21)

Batavia Prosperindo targets IDR250 billion

BI/bursa
Senin, 12/10/2009 00:00 WIB
Irvin Avriano (21)
Bisnis Indonesia

Batavia Prosperindo targets IDR250 billion
JAKARTA: PT Batavia Prosperindo Aset Manajemen targets the protected mutual fund, Si Dana Proteksi Batavia XVI, could tap IDR250 billion public investments. The product is released by end of the month.

"The product is predicted to have a lot of absorptions due to the relatively short tenure and lucrative yield," said Head of Sales & Marketing of Batavia Aset Manajemen Karma Perkasa Siregar in press release last week.

Si Dana Proteksi Batavia XVI has two years investment tenure.

The company targets the indication of protected mutual fund net yield worth about 9.25 percent per year which will be paid in the form of dividend every month.

The capital market investment product here will be marketed through PT Bank Permata Tbk, PT Bank Commonwealth Indonesia, and PT Bank DBS Indonesia that have got license from Bank Indonesia.

Karma said the mutual fund yield will be gained from the placement of investment portfolio of at least 80 percent on the corporate bond instrument and the other is financial market instrument.

The protected mutual fund product hit the market previously was so-called Si Dana Batavia X, which booked about IDR180 billion. The total fund under management was higher than the corporate target of IDR150 billion.

The product had 16 months investment tenure with net yield indication of 9.4 percent per year. The yield will be paid in quarterly dividend to the investors. (Bisnis/21)

IDR7.3 trillion bond and 4.17 billion stakes ready to enter capital market

Saturday, 10/10/2009 00:00 WIB

IDR7.3 trillion bond and 4.17 billion stakes ready to enter capital market

Irvin Avriano A.

Bisnis Indonesia

JAKARTA: The IDR7.3 trillion bonds and corporate sharia bonds and 4.17 billion new stakes will hit the market up to end of the year.

Documents submitted to the Corporate Finance Assessment Bureau of the Capital Market and Finance Institution Supervisory Agency (Bapepam-LK) indicated the expectation of the domestic economy players that have been better than that of last year.

"This could show the improvement of market," said Service Sector Corporate Finance Assessment Bureau Chief of Bapepam-LK Noor Rachman yesterday.

He said to ease the emitters interest, particularly the stock emitter, the capital market authority has revised two regulations. The revision aims to lure corporate interest to enter the bourse.

"Thus, they would not have thought longer to hit the bourse as there are many ways to get extra capital in such urgent condition."

Real Sector Corporate Finance Assessment Bureau Chief of Bapepam-LK Anis Baridwan added the revised regulations here include the regulation No.IX.D.4 on Capital Increase Without Futures Rights (non-HMETD) and No. XI.B.2 on The Stock Buyback Issued by the Emitter or Public Corporation.

The revision of the capital increase without HMETD will be larger into 10 percent as from the old regulation of 5 percent.

The stock buyback revised regulation will loosen the maximum value of stock buyback by 20 percent as from 10 percent.

The corporate bond issuance value this year is predicted to exceed IDR30 trillion noting the low BI rate which leads to the low government bond yield become the benchmark of bond coupon. (Bisnis/21)

Pacific Capital Bolsters Equity

Jumat, 09/10/2009 00:00 WIB
Pacific Capital Bolsters Equity

JAKARTA: PT Pacific Capital Investment bolsters its equity from IDR16 billion to IDR26 billion to meet the Capital Market and Financial Institution Supervisory Agency's (Bapepam-LK) regulation.

Director of Pacific Capital Andreas Yasakasih revealed the equity injection was also injected by the shareholders to market private equity mutual fund.

He explained Bapepam-LK was processing the notification letter of company's equity injection. The company, he continued, was sounding several investors to create similar products that had capital market securities as their assets. The company was optimistic to be able to issue one private equity mutual fund this year.

"For a start, the assets will still be marketable securities, but later we will try to look for projects in the real sector," he told Bisnis recently.

He added the company at the moment was asking for an effective statement for fixed-income mutual fund Pacific Fixed Fund. The mutual fund product is targeted to raise IDR100 billion in investment fund.

Andreas said the company had just launched balanced mutual fund Pacific Balanced Fund, which is the first mutual fund product issued by the company.

"We don't fix too high of a target since we are still monitoring the market condition."

Fund management

According to him, before issuing the mutual fund the company only oversaw a total discretionary fund of IDR30 billion--IDR40 billion.

The amount of fund was raised from several institutional investors, on which the company still relied its income.

Therefore, inserted Andreas, the company still targeted institutional investors as major investor in the mutual fund product. However, he explained the company would also try to join hands with retail investors to expand new investor base.

The additional investors, he exposed, were needed in line with the company's plan to develop its business.

With new products supported by management and information technology required by Bapepam-LK, the company hoped to make its products more active than before.

According to him, the company was still building investors confidence in their mutual fund products by showing good track records. (Bisnis/21)

Moody's Indonesia returns business permit

as published in Bisnis Indonesia daily newspaper

Jumat, 09/10/2009 00:00 WIB

Moody's Indonesia returns business permit

JAKARTA: The Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) since last week has officially received the business permit returned by rating agency PT Moody's Indonesia.

Accounting and Transparency Standard Bureau Chief of Bapepam-LK Etty Retno Wulandari revealed the business permit revocation had been approved of by Head of Bapepam-LK Ahmad Fuad Rahmany through Decision Letter Kep-339/BL/2009. The copy of the letter, dated September 30, was just sent to her yesterday.

"Therefore, their [Moody's Indonesia] obligation to us, which issues business permit, in returning their permit has been settled," Etty told the press yesterday.

She explained in the letter the capital market authority revoked Decision Letter Kep-37/PM/1997 on Business Permit as Securities Rating Agency issued on December 9, 1997.

The business permit was issued to PT Kasnic Duff & Phelps Rating Indonesia, which changed name in January 2007 to Moody's Indonesia after the change in the shareholders.

According to her, the shareholders and the management of the company in the letter had approved of the disbandment and liquidation of the rating agency.

The shutdown of Moody's Indonesia is made following Moody's Corporation's decision to close two other branch offices in Taipei, Taiwan and Indiana, the US, in the wake of the impacts of the global crisis. Moody's Corporation is the holding company of Moody's Investor Services, one of the largest rating agencies in the world.

Moody's Corporation controls a 99% stake in Moody's Indonesia. The holding company is currently restructuring their businesses in the wake of the global crisis.

In Asia Pacific, the company decides to hold their big businesses in Japan, Australia, Hong Kong, and Singapore.

Record by Bisnis showed that Moddy's Indonesia's letter to Bapepam-LK informed that the liquidation process was projected to be completed by the end of last month. However, it turned out the process was time-consuming, so that it could yet be completed so far.

Moody's Indonesia previously planned to return their business permit as rating agency to Bapepam-LK at the end of June 2009.

Based on Moody's' letter 115/Moody's/DIR/VI/200 to Bapepam-LK on June 24, then President Director of Moody's Indonesia Minon Almasyur said the company had first withdrawn 21 national note grades.

The notes consist of bonds and medium-term notes. In addition, the company has withdrawn seven corporation ratings consisting of two already published ratings and five rated in private. (21)

SUN transactions jumped this week

as published in Bisnis Indonesia daily newspaper

Saturday, 03/10/2009

SUN transactions jumped this week

JAKARTA: The average transaction of government's treasury bonds (surat utang negara/SUN) this week through the level Rp5, 42 trillion per day, above the weekly average since the beginning of the year.

However, the price index of government bonds fell yesterday was caused by profit taking action immediately after the bond price index is the highest level through Thursday.

According to the data receiver Bond Transaction Report which published by Indonesia Stock Exchange (IDX/Bursa Efek Indonesia), all series of SUN's transactions throughout the week that exceeds average monthly trading in June had soared in the level of Rp3, 71 trillion per day.

In the second week in June, the average level of treasury bonds trade reached Rp5,33 trillion from the action of buying and selling in large numbers the last few days.

Since the beginning of the year, average daily trading data in the first half SUN recorded Rp2,9 trillion per day.

The data from Inter Dealer Market Association (IDMA/Perhimpunan Pedagang Surat Utang Negara) showed price declines occurred in almost all the series yesterday. Declining prices caused the price index fell by 14 basis points (bps) from 95.24 on Thursday to 95.1 yesterday.

Decrease in the price index that reflected the decline in the FR0047 series' price decreased by 62 bps from level to level 94.12% 93.50% and boost the yield by 8 bps to 10.81% level. Price and yield conflicting, with the ratio of 100 bps is equal to 1%.

The FR0047 series is the most traded series this Friday that reach level Rp1, 34 trillion, which followed a series of retail bonds (ORI) 003 series Rp1, 2 trillion and FR0039 series of Rp727 billion.

Head of Debt Capital Markets from PT BNI Securities Sukartono assess the action took profit bond market players are still reasonable, given the high prices this week.

"It was unusual, because the market would normally Indonesia fell sharply after rising," he said when contacted by Bisnis last night.

He explained that market participants typically perform the same action when there is news or sentiment that spurred the transaction.

In addition, said Sukartono, market sentiment is still marked by economic improvement and the Bank Indonesia rate may reduced to as low as 6% this year and the potential increase in interest rates are still long.

He believes foreign investors ownership in SUN will continue to increase from 25 September for the position of Rp93, 03 trillion due to persistence of the series of positive sentiment this month.

Director of the Treasury Bonds - Directorate General Debt Management Office Ministry of Finance Bhimantara Widyajala said as of 1 October, the value of foreign ownership increased to SUN for Rp93, 99 trillion, or for 16.57% of total government issued SUN.

"The value was increased compared to Rp760 billion at the end of September position." (21)