Bond Issuance May Reach IDR29 Trillion: Increase in Indonesia's CDS Predicted to only be Temporary

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as published in Bisnis Indonesia daily newspaper
Monday, 30/11/2009 00:00 WIB
Bond Issuance May Reach IDR29 Trillion
Increase in Indonesia's CDS Predicted to only be Temporary

JAKARTA: Corporate bond issuance next year is projected at IDR27 trillion-IDR29 trillion, rising 5%-10% from IDR26.5 trillion this year.

Data by Bisnis show the total amount of corporate bonds maturing next year will reach IDR10.94 trillion, while the amount of T-bonds maturing next year will hit IDR70.47 trillion.

Data by Indonesia Stock Exchange (BEI) expose the volume of rupiah-denominated bond and Islamic bond so far this year has reached IDR19.33 trillion. Approaching the yearend, there will be additional IDR7.13 trillion in bond, leading to a total issuance of IDR26.46 trillion this year.

"Bond and Islamic bond issuances next year will grow 5%-10% from this year as several companies will be interested in entering the bond market in line with economic growth," observed a corporate bond analyst at publicly listed PT Trimegah Securities Octavianus Bramantya last weekend.

President Director of PT Pemeringkat Efek Indonesia (Pefindo) Kahlil Rowter viewed the Dubai World debt crisis would not hugely impact the T-bond and corporate bond market in the country. However, he admitted the debt crisis would impact the global bond market for a certain period of time.

"The debt crisis will not affect Indonesia much nor bond issuance target next year, which is projected at IDR25 trillion - IDR30 trillion," he said.

Kahlil took example that in the first quarter of 2009, the global market condition, reflected from Indonesia's high credit default swap (CDS), didn't discourage issuers to issue bond nor dispirited investors.

He explained the increase in Indonesia's CDS in the past two days would not last long, despite his belief that there would be fund withdrawal from the emerging bond markets for a certain time.

The CDS of five-year rupiah-denominated Indonesian T-bonds surged from 202.21 on November 25 to 238.64 on November 27.

Head of Pricing at Pefindo Ronny Wicaksono predicted bond issuance would be flourishing in the first semester of 2010 since the benchmark interest rate was still above the level desired by investors.

Several issuers whose bonds will mature next year are Astra Sedaya Finance (IDR1.15 trillion), Federal International Finance (IDR855 billion), Apexindo Pratama Duta (IDR750 billion), BTN (IDR750 billion), Indosat (IDR640 billion), and Jasa Marga (IDR650 billion).

State Budget Financing
Director General of Debt Management at the Department of Finance Rahmat Waluyanto disclosed the government had prepared funds to service T-bonds that would mature next year. "We have allocated funds for T-bonds through the State Budget."

Rahmat added the Department of Finance was optimistic domestic and global T-bond issuances would attract investors, thanks to better rating outlooks as released by Moody's and S&P.

He continued several analysts viewed the Dubai bond crisis would shrink investment flow into emerging countries, which would be potential to affect Indonesia's T-bond prices.

Foreign investor ownership of T-bonds also surged to IDR104.88 trillion as of November 20 from IDR103.3 trillion as of November 13.

However, Fauzi Ichsan, an economist at Standard Chartered Bank, cited economic players started worrying about the follow-up impacts of the Dubai World debt crisis, leading to negative sentiments in the domestic market for a short term.

In the short-term, Indonesian market players would take a defensive position on worries the phenomenon was only the beginning of the worse debt crisis to come in many countries. (Bisnis/21/agi)

Multi Nitrotama eyes on US$20 million loans

as published in Bisnis Indonesia daily newspaper
Saturday, 28/11/2009 00:00 WIB
Multi Nitrotama eyes on US$20 million loans

JAKARTA: PT Multi Nitrotama Kimia eyes on US$20 million loans from local bank to finance the new plant of ammonium nitride construction and old plant capacity rise.

“The company has sought loan from local bank as standby loan if the corporate bond issuance fails to meet the set target,” said Finance and Administration Director of Multi Nitrotama Aulia M. Oemar to press this week.

The company has been establish pricing and book building of bonds and sharia bonds worth totally at IDR370 billion with A- rating. Some 85 percent securities issuance funds will be spent for additional construction of ammonium nitride plant in Cikampek with 100,000 metric tons capacities.

The bonds will be categorized into three series, the A series with 2 years tenure, B series with 3 years tenure, and C series with 5 years tenure.

As underwriter, the company is assisted by PT Trimegah Securities Tbk and PT Indo Premier Securities. PT Bank Mega Tbk acts as trusteeship board.

Aulia said formerly the plant could produced 3,700 metric tons of ammonium nitride per year. The former plant capacity is either planned to increase up to 40,000 metric tons per year.

The company has constructed the plant a month ago.

The securities bond prospectus also explains the company has purchased secondhand machinery worth US$2.97 million for the new plant with refurbishment. The company also plans to buy new machinery from the fund.

The company targets to have IDR1trillion corporate sales this year

Next year, the company has planned to buy 18 hectares plot of areas close to Samarinda, East Kalimantan, to build warehouse for ammonium nitride whose development cost US$2-3 million.

Besides, the company also set the capital expenditure worth US$53 million to construct plant and warehouse next year deriving from the bond issuance and corporate internal cash.

The market shares of this industry is 50 percent and with the plant construction, the firm is optimistically to expand the profit as it could cut down the importation budget.

To cover the mining industry demand, the company should import ammonium nitride in addition to the 37,000 metric tons of production. (21)

Telkom selecting 6 securities, related to their plans to issue IDR2 trillion bonds

as published in Bisnis Indonesia daily newspaper

Saturday, 28/11/2009 00:00 WIB

Telkom selecting 6 securities

It plans to issue IDR2 trillion bonds

JAKARTA: PT Telekomunikasi Indonesia (Telkom) Tbk has been conducting beauty contest to six securities as candidates for underwriter of IDR2 trillion bond issuance.

Some informed Bisnis resources said the emitter has done the selection process with six potential securities companies to become underwriter of bond issuance here.

“The invited securities companies include four state securities firms and two private ones two weeks ago,” said one of the resources this week.

Other resource said the state firms invited here include PT Danareksa Sekuritas, PT Mandiri Sekuritas, PT Bahana Securities, and PT BNI Securities.

The private firms potentially taking parts in the bond issuance here include PT Trimegah Securities Tbk and PT Andalan Artha Advisindo Sekuritas (AAA Securities).

Besides, the bond is possibly be included in sharia financing scheme. “So, the would be issued securities will likely be sharia bonds.”

Finance Director of Telkom Sudiro Asno conceded the company has been conducting a beauty contest.

But he could not provide details on the number and name of the invited securities companies.

Next year Telkom plans to seek external funding to cover 40 percent next year capital expenditure worth US$2 billion or IDR20 trillions. The state firm here prepares the issuance scheme of IDR2-3 trillion bonds in semester I/2009.

Director of BNI Securities Jimmy Nyo, President Director of AAA Securities Th. Andri Rukminto and Director Trimegah Securities Desimon admitted the request for beauty contest but they could barely confirm the amount of issuance due to early process.

Telkom this year is proven to have absorbed the vendor financing facility worth US$60 million or IDR600 billion from two overseas firms.

Sudiro said the company has got commitment for vendor financing totally worth US$400 million from two firms. Huawei provides US$300 million financing and ZTE US$100 million.

“We have so far spent some US$60 million noting that the absorption depends on the needs,” he said to press after working meeting with the Parliament’s Commission XI last Thursday.

Vendor financing is one of corporate strategies to cover capital expenditure this year worth about IDR17 trillion. The other funding option is bonds and bank loan. (21/Arif Gunawan S.) (redaksi@ bisnis.co.id)

Sarijaya mutual funds been transfered

as published in Bisnis Indonesia daily newspaper
Tuesday, 24/11/09
Sarijaya mutual funds been transfered

JAKARTA: Investors and the management of funds in two mutual funds, Sarijaya Smart Equity and Sarijaya Smart Mix that worth IDR25 billion -- IDR30 billion, transfered to PT Bahana TCW Investment Management.

PT Sarijaya Permana Sekuritas, the securities company that manage the mutual funds been suspended earlier this year after a criminal case filed by the capital market's authority that point to its owner, Herman Ramli. He was accused for use investors money to invest without permission.

"It's been organized well, and still waiting for the agreement," said Invesment Management Bureau Chief Bapepam-LK Djoko Hendratto to the press yesterday.

Bahana TCW Investment's President Director Edward Parlindungan Lubis said the intention of switching the mutual funds came from investors request.

He said that the name of the two mutual fund will became Bahana Equity Smart and Bahana Mix Smart.(Bisnis/21)

Bond coupon of Sarana Multigriya at 8.5%-10.79%

as published in the Bisnis Indonesia daily newspaper
Tuesday, 24/11/2009 00:00 WIB
Bond coupon of Sarana Multigriya at 8.5%-10.79%

JAKARTA: PT Sarana Multigriya Finansial (SMF) offered II/2009 bond coupon worth totally IDR350 billion with 1 and 3 years tenure at the level of 8.5-9 percent and 9.79-10.79 percent. The issuance is potentially to grow up.

Director of PT Bahana Securities Andi Sidharta said the reference used for the one year tenure bonds used SPN and the three year tenure will use FR008 as the reference. Premium offered ranges at 150-250 bps above the reference yield.

He said the offered coupon shows the company remains optimistic the high customers demand as it targets investors with short term horizon.

Andi opens chance to the additional issuance, would the demand and coupon required by the investors be considered lucrative.

"It is unlike other bonds with longer term many issued by end of the year," he briefed the press yesterday. Bahana Securities acts as single underwriter here.

SMF targets bank customers and investment managers which prefer short term tenure investment instrument.

He said there are three major factors leading to the company and emitter optimism with the bond issuance gains. First, the bond rating is at AA level by PT Fitch Ratings Indonesia. As to him, it is rare now for corporate to get that high rating.

Second, the emitter is state owned enterprises fully guaranteed by the government. He cited example when every IPO of bonds or stocks, investors are always interested in the issued investment instrument.

Third, the offered bond coupon is higher than bank and deposit rate commonly at 8 percent with relatively the same tenure.

President Director of SMF Erica Soeroto said the company plans to disburse IDR450 billion financing next year. "But , it still waits for shareholders approval."

Director of SMF Sutomo said the company has sought some investment managers to market mutual funds using assets-backed securities instrument (EBA) issued twice by the company this year.

The derivative securities issuance here stands at IDR502 billion but mostly absorbed by SMF as the standby buyer.

He said retail investor later could enjoy protected mutual fund with EBA basis equity particularly EBA DSMF-BTN 02/2009 the company just issued.

"The coupon is still attractive and it'd better for mutual fund investor."

Up to yearend, the company will have a total assets worth IDR1.95 trillion coming from equity and EBA 01 and 02 worth totally IDR1.3 trillion, I/2009 bond worth IDR300 billion, and II/2009 bond scheme worth IDR350 billion. (Bisnis/21)

T-bond Issuance to be Suspended

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as published in Bisnis Indonesia daily newspaper
Wednesday, 18/11/2009 00:00 WIB
T-bond Issuance to be Suspended

JAKARTA: The government is going to suspend T-bond issuance this year as it has already met the target to raise IDR144.54 trillion in gross financing through the auction of three T-bond series worth IDR2.16 trillion.

Rahmat Waluyanto, Director General of Debt Management at the Department of Finance, revealed the government had been able to raise IDR2.16 trillion from the market through the issuance of T-bond series FR0031, FR0040, and FR0052 yesterday.

Although there was still 1.5 months left this year, there would be no more T-bond issued as the three series had been able to complete the fulfillment of the gross financing target of IDR144.54 trillion. "This is the last time since 100% of the target has been completed," he said yesterday.

At the T-bond issuance yesterday, the total bid received was IDR2.73 trillion. However, only IDR1.4 trillion was favored for the 11-year FR0031 series, IDR660 for the 16-year FR0040 series, and IDR104 billion for the 11-year FR0052 series.

In addition to rupiah-denominated bonds, the government has also issued three foreign-denominated bonds to patch up this year's deficit of IDR128.6 trillion or 2.4% of GDP. The three foreign-denominated bonds are global MTN (medium term notes) worth US$3 billion issued in February, global Islamic bond worth US$650 million issued in April, and Samurai Bond worth 35 billion yens issued in August.

Rahmat said the government was quite successful in its strategy of lowering yield by bolstering bond issuance earlier this year. "Such a measure enables us to control yield and prevent us from being controlled by the market."

Pursue target

An economist at the Institute for Development of Economic and Finance Aviliani viewed there had been an impression that the government only wanted to pursue financing target by bolstering bond issuances.

As a result, at the moment there had been competition for funds between the banking industry, which is facing liquidity problems, and the government, which offers huge yields.

An economist at Sustainable Development Indonesia Dradjad Hari Wibowo agreed, saying the maximum bond issuance was not matched by the parallel budgetary realization. As a result, there had always been budget left unabsorbed every year.

"The government's budgetary management is poor as the financing wheel doesn't match the wheels of spending and state revenues." (Bisnis/agi/21)

Salim Ivomas bond issuance below target: Jamsostek calls for 12-13% coupons

as published in Bisnis Indonesia daily newspaper

Wednesday, 18/11/2009 00:00 WIB
Salim Ivomas bond issuance below target
Jamsostek calls for 12-13% coupons

JAKARTA: The amount of I/2009 bond issuance and I/2009 sharia bonds of Salim Ivomas Pratama was IDR780 billion or less than the former scheme worth IDr1.25 trillion.

This is due to the resignation of PT Jamsostek and some investors noting that the offered coupon is 11.65 percent or lower than the demand.

"One of factors causing some investors walked out is that emitter set was too under standard than the investors expectation regarding the noted reputation of Salim Group and Indofood as the holding company," he said to Bisnis.

Other resources said the Jamsostek coupon demand is too high or 12-13 percent and that if emitter set the bond and sharia bond coupon 12 percent, the bond request would have been oversubscribed or could even raised into IDR1.5 trillion.

Investment Director of Jamsostek Elvyn Gani Masasya conceded the coupon set at the level of 11.65 percent will not be included in the investment criteria. But she did not provide detail explanation on the coupon asked by the company to Salim Ivomas as the underwriter.

The company formerly has set higher coupon offer than the earlier offering of 11.1-11.6 percent or 175-225 bps refering to the yield of the government bond of FR0026 series. Initially the maximum yield was at the level of 9.35 percent.

But, SUN yield of the series here was raised early this month up to 9.44 percent and the bond coupon indication increased up to 11.6 percent at maximum. Some market players suspected there was cornering action of SUN price to form new pricing at bond secondary market.

The company reason to refer to the coupon asked by the investors is that Salim Ivomas adjust it to the corporate short and long term lending rate.

In the issuance, emitter was assisted by five securities companies as the underwriters whose range is based on the bond and sharia bond sales result, namely PT OSK Nusadana Securities Indonesia, PT Mandiri Sekuritas, PT Kim Eng Securities, PT CIMB Securities Indonesia, and PT Danareksa Sekuritas.

Salim Ivomas also appointed PT Bank Mega Tbk as the trustee boards of the issuance of both notes.

Bond offering is scheduled from October 28 to November 11, 2009. Bapepam effective statement will be in November 20, 2009. Besides, for the bond schedule for IDX listing is on December 2, 2009.

The bonds and sharia bonds here got AA- ratings from PT Pemeringkat Efek Indonesia.

When confirmed, Director of Investment Banking of Danareksa Sekuritas Marciano Herman was not available for comment last night, and so were SVP Head of Debt Capital Markets of CIMB Securities Indonesia A. Siwiwardhani and Director Kim Eng Securities Syahrizal Yusuf. (Bisnis/21)

Multifinance issued IDR3.5 trillion bonds: Many issuances taking place in semester I/2010

as published in Bisnis Indonesia daily newspaper
Tuesday, 17/11/2009 00:00 WIB
Multifinance issued IDR3.5 trillion bonds
Many issuances taking place in semester I/2010

JAKARTA: Multifinance company bond issuance next year is estimated to surpass this year bond issuance value of IDR3.5 trillion due to the total matured bonds worth IDR4.5 trillion.

Data of the IDX up to October shows the bond issuance value of multifinance company stood at IDR3.5 trillion or 18.31 percent as from the total bond issuance of all sectors worth IDR19.1 trillion.

VP Financial Institution Rating of PT Pemeringkat Efek Indonesia (Pefindo) Hendro Utomo said the multifinance sector bond issuance will bolster the total bond issuance next year. The bonds here are predicted to exceed the issuance of this yearend with the estimated value of IDR32 trillion.

"The dynamics of multifinance company bond issuance is absolutely done as they continue to disburse credit particularly next year when the economy has better outlook than this year," he said to Bisnis this week.

The maturing bonds next year stand at IDR10.94 trillion of which some IDR4.5 trillion bonds will have the due date at the same period.

There are some factors determining the growing bond issuance here.

First, the prospect of multifinance credit channeling will grow up along with the rising expectation of car and motorbike sales in automotive sector.

Second, with the possible rise of interest rate by semester II/2010, the bond issuance windows in semester I will be higher than that of remaining period next year to cut down the issuance cost.

The cost is set from the offered coupon to the investors. Besides, the issuance will be favored by the mounting lending interest rate as multifinance will have more aggressive credit expansion.

The interest rate influences new corporate bond issuance as it is based on the offered coupons to the investors which will use yield of the government bonds (SUN) which moves along with the lending rate.

Higher rate will lead to the mounting SUN yield and thus lifts up higher the bond coupon which consequently will spend mor cost to pay the bond coupon.

Third, the growing interest rate will not influence the bond issuance value. Hendro said the financing will be more aggressive and concentrate more on the issuance in semester I. The company in this sector will compete for the chance to issue bonds at the same period.

However, there is possibility that multifinance sector seeks other more effective and efficient option other than bond issuance through public offering, namely the bank loan and medium term notes issuance (MTN).

MTN issuance has shorter tenure and more efficient if compared to the conventional bonds cost.

Besides, the more issuance of MTN this year tends to lure investors noting that there are some investment managers that cover the closely issued notes and change them into mutual fund.

The MTN issuance in previous years was far less than this year. Bisnis records the trend here is marked by the same notes issuance by PT Federal International Finance (FIF) worth totally IDR1 trillion and by PT Astra Sedaya Finance IDR500 billion.

President Director of PT Adira Dinamika Multifinance Stanley Setia Atmaja predicted the bond issuance value next year from multifinance company could be even higher by 15-20 percent than the matured bonds next year worth IDR4.5 trillion. This is due possibly to the fact that the company fails to shift it to bank loans. (Bisnis/21/mts)

Manulife Manajemen targets growth at 20%

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as published in Bisnis Indonesia daily newspaper
Tuesday, 17/11/2009 00:00 WIB
Manulife Manajemen Targets Growth at 20%

JAKARTA: PT Manulife Aset Manajemen Indonesia targets to bolster the amount of fund it oversees by 20% to IDR27.3 trillion-IDR27.6 trillion for 2010, thanks to its larger number of customers.

President Director of Manulife Aset Manajemen Denny Rizal Thaher revealed the amount of fund the company had overseen until the end of October reached IDR22 trillion consisting of IDR8.7 trillion in mutual fund and IDR13.3 trillion in discretionary fund.

"Manulife Manajemen also plans to issue two equity funds next year," he said yesterday.

He added the company also targets to boost the number of customers by 20% from the current 53,000 customers.

To realize the target, he continued, the company would work together with publicly listed PT Bank Central Asia (BCA) in developing auto debit and joint account facilities to eye the retail customers of the private bank.

Those facilities, he informed, will make it easier for customers to transfer their funds from their BCA accounts to their mutual fund accounts, leaving manual transfer no longer necessary.

He explained the second program aimed to make it easier for parents to make investments for their children from their infancy to their adulthood at 21 years of age.

The mutual fund account will have two owners, namely the investor and the trustee. The account will belong to the investor once he or she can be considered an adult.

"In principle, each investment manager has to have direct selling channel to diversify distribution channels."

According to Denny, Manulife Aset Manajemen at the moment is an investment manager overseeing the largest discretionary fund portfolio in the mutual fund industry.

In the meantime, the total amount of fund it oversees ranks second largest among four investment managers, with Schroders Investment, Fortis Investments, and Mandiri Manajemen Investasi being the other three. (Bisnis/21)

Salim Ivomas bond coupon at 11.65%

as published in Bisnis Indonesia daily
Monday, 16/11/2009 00:00 WIB
Salim Ivomas bond coupon at 11.65%
Total corporate debt per May 2009 stood at IDR6 trillion

JAKARTA: PT Salim Ivomas Pratama set the bond coupon and sharia bond of I/2009 on the level of 11.65 percent with the booking up to last week remaining under the target of IDR1.25 trillion.

Bisnis resources said the emitter nomination was not willing to increase the coupon value of both securities so some potential investors dropped their booking.

"That is based on their finance profile. If the coupon grows up, it will change their business strategy , particularly the existing loan profile," said Bisnis resource yesterday.

The company will ensure the number of issuance and coupon worth today after setting the early coupon by end of last week.

With the coupon, the demand for bonds could be lower than the corporate targeted value.

"The market is good with a slightly higher coupon, there should have had more investors and the issuance amount could stand at IDr1.25 trillion or up to IDR1.5 trillion for both securities here," other resources added.

Bond and sharia bond issuances had potentially to rise up to IDr1.5 trillion from IDR1.25 trillion. The bond and sharia bond issuance value stands at IDR1 trillion and IDR250 billion.

On the last month public expose, the coupon of both bonds were set slightly higher by 175-225 bps above the FR0026 or 11.1-11.6 percent.

When asked, Director of Investment Banking of PT Danareksa Sekuritas Marciano Herman was not willing to give comment noting the ongoing process of bond issuance.

SVP Head of Debt Capital Markets of PT CIMB Securities Indonesia A. Siwiwardhani was not available for comment yesterday.

In the issuance of securities here, in addition to Danareksa Sekuritas and CIMB Securities, Salim Ivomas assigned four other securities firms to become underwriters, namely PT OSK Nusadana Securities Indonesia, PT Mandiri Sekuritas, and PT Kim Eng Securities.

Salim Ivomas plans to spend IDr1 trillion of the bond and sharia bond tender offer to restructure some of the short term debt. Besides, the company also need to use some IDr250 billion fund from the sharia bonds issuance for the firm capital expenditure in transportation.

The company plans to restructure most of the short term loans gained from some national banks. Based on the corporate finance report per May 2009, the company still has short term obligation worth IDr2.18 trillion and long term one is IDR3.85 trillion.

Following the bond issuance, the composition of long term debt is predicted to increase into 76 percent. (21)

Lorena Transport eyes on IDR150 billion IPO

as published in Bisnis Indonesia daily
Saturday, 14/11/2009 00:00 WIB
Lorena Transport eyes on IDR150 billion IPO

JAKARTA: PT Eka Sari Lorena Transport plans to have initial public offering (IPO) worth IDR100 -150 billion in semester I/2010. Eka Sari Lorena is the subsidiary of PT Lorena Karina, the transportation provider.

"The company will wait for the financial statement of December this year as the document basis for the issuance," said President Director of PT Reliance Securities Tbk Orias Petrus Moedak to the press yesterday.

Reliance Securities is the underwriter for Lorena Transport IPO. "The IPO fund will be allotted for the capital of the family business and business expansion."

Lorena Karina is the Lorena Group firm majoring in land transportation connecting cities in Java, Sumatra, Bali, and Madura.

Orias said Reliance has eyed the underwriting of IPO of a food producer company worth IDR300-400 billion.

The target of bond and stock underwriting by Reliance Securities will reach IDR600 billion next year.

Responding to the EGMS of Reliance Securities yesterday, he said the company get approval for insuring IDR187.5 billion corporate assets as the collateral for the issuance of bond.

"The asset is allotted for the bond collateral which will be issued next year worth IDR125 billion with one and three years tenure."

The company plans to allocate the bond fund for developing online trading, to enlarge corporate investment banking division, and adding branch offices.

Besides that, the company also got approval from shareholders to convert the long investment of some stock portfolio into bank shares worth IDR100 billion.

He has studied two banks are in need of capital injection and the amount is the same of those to be allotted by Reliance Securities.

The largest investment portfolio is PT Kawasan Industri Jababeka Tbk, PT Sentul City Tbk, and PT Ades Waters Indonesia Tbk. (21)

Demand for PKT bonds stands at IDR2.6 trillion

As published in Bisnis Indonesia daily

Friday, 13/11/2009 00:00 WIB

Demand for PKT bonds stands at IDR2.6 trillion

JAKARTA: Demand for II/2009 bonds and I/2009 sharia bonds of PT Pupuk Kalimantan Timur (Pupuk Kaltim) got double oversubscription, or IDR2.6 trillion, of the total issuance of IDR1.3 trillion.

Bisnis resource said the emitter set 10.5 percent coupon and yield for each instrument to the investor.

"The coupon was set yesterday and the offer was closed," he said to Bisnis yesterday.

The largest composition of investors in the instrument here is pension fund and insurance which stood at 40-60 percent of the total issuance. The II/2009 bond and I/2009 sharia bonds of Pupuk Kaltim was set at IDR1 trillion and IDR300 billion.

When asked, Director of Investment Banking of PT Danareksa Sekuritas Marciano Herman declined to comment. He just said the demand for the bonds was beyond the emitter expectation and Danareksa. Danareksa Sekuritas acted as the underwriter in this case.

Finance Director of Pupuk Kaltim Eko Sunarko was not available for comment last night.

Some 20 percent of the fund raked from the issuance of both bond series here will be allotted for the construction of NPK fused blending fertilizer factory. The rest will be budgeted for working capital.

Pupuk Kaltim has just got IDR3 trillion loan commitment from the syndicated six banks led by PT Bank Mandiri Tbk to construct fertilizer factory, Pupuk Kaltim V.

Not simply from Bank Mandiri, the loans come either from PT Bank Rakyat Indonesia Tbk (BRI), PT Bank Negara Indonesia Tbk, PT Bank Central Asia Tbk, Bank Pembangunan Daerah DKI, and Bank Pembangunan Kalimantan Timur.

The company eyes on a total of US$115-120 million loans from BRI for the coal boiler construction.

Formerly the company intended to finance gasification through bond and sharia bond issuances.

Until last month, data of IDX shows the bond issuance in rupiah denomination domestic stood at IDR19.1 trillion.

Danareksa Sekuritas could have the market shares of underwriting by 20.3 percent with underwriting value of IDR3.83 trillion from the total issuances. (21)

Behind the coupon of Pupuk Kaltim's bonds

In the middle of passive appetite condition of domestic investors, PT Pupuk Kalimantan Timur (Pupuk Kaltim) decide let their bond II/2009 and sukuk I/2009's investor receive a 10.5% p.a. coupon. The investors already close their portofolio investment strategy earlier this year after booked high return since the economic turndown caused by global crisis last year.

Demand asked for the two kind of debt securities has 5 years tenures, which showed that the invesment instrument will matured in 2014, have shown that the investment appetite of domestic investors haven't fell to the lowest level.

The asked demand amount from the investors reach doubled of its original numbers, from it's earlier-decided size, IDR1.3 trillion, says someone who involve in the transaction. The demand, he said, reach Rp2.6 trillion.

"The book building process have settled the yield both for the bond and the ijarah sukuk," he said to by telephone interview, earlier this night.

Chief of Financial Officer of Pupuk Kaltim Eko Sunarko just read my text massage that I have sent earlier. He said the numbers haven't decided yet by the company and the underwriter. But the newspaper still must published in the morning, so his decline word can't be printed down.. (*My humble sorry pak Eko, the show must go on*). -- Please read Bisnis Indonesia newspaper daily this morning first or search it in bisnis.com, then read again this article.

The state-owned corporation must be greet the result, because another private bond issuer have decided to give their investors a far-bigger coupon, around 150 basis points (bps), or equals with 1.5% spread.

But their investors should asked the underwriter about the decision to make yield from the government bond 5 year tenured, FR00051 series, to become the counting basis for their coupon's yield.

The possibility cames to a conclusion. The series have a lower yield, that may made the management of Pupuk Kaltim doesn't have to lend high coupon to the insurance and pension fund investors, that have been the bond's most investor, around 40% -- 60%.

At least there are two things that not fit with the yield and arrangement. First of all, is about the liquidity that not as much as the other series that have a closer and fairer maturity date compared with the series, FR00026.

The FR00051 haven't trade much in high volume by traders and investors because it's have just issued by the Debt Management Office - Department of Finance at the begining of the year. And it is caused by the yield from the secondary market is not as high as other series with identical tenure.

The second one is about the tenure that doesn't close with the maturity date cause the FR00051 will mature in the beginning of 2014, far from the maturity date of Pupuk Kaltim's securities in November. And FR00026 have fairer time, that is longer than November, so it is has more significantly side for the investors than the other series.

But after all..the coupon nominals have decided. Even by the also-state-owned securities company that helped Pupuk Kaltim issues the bond and sukuk, PT Danareksa Securities, that easier to get investor in domestic areas, especially from also-state-owned kind of investors.

And like Yoda said in The Empire Strikes Back (1980), "So be it."

Return of RI global bonds the lowest in Asia: Government rakes IDR3.55 trillion from SUN tender

photo from http://jurnal-ekonomi.org/wp-content/uploads/2009/03/ledakan-utang-300x300.jpg

as published in Bisnis Indonesia daily newspaper
Rabu, 04/11/2009 00:00 WIB
Return of RI global bonds the lowest in Asia
Government rakes IDR3.55 trillion from SUN tender

JAKARTA: The return of the Indonesian government bonds (SUN) in October 2009 stood at -1.09 percent or the lowest among the 12 Asian countries but Japan.

Data released by HSBC Holdings Plc mentions the highest bond return was given by Sri Lanka of 3.51 percent, then Pakistan 2.68 percent, India 1.07 percent ans Vietnam 1.02 percent.

Director General of Debt Management - Department of Finance Rahmat Waluyanto said the return is influenced by the risk perception of a promissory note. If Indonesian bond return is low or drastically declining, it implies the risk perception of foreign exchange SUN declined.

"Return here shows that the Indonesian government bonds risk perception is low. This is proved by the rating given by the Moody's Investors Service and S&P [Standard & Poor's] which improve the rating outlook as of stable into positive rating," he said to Bisnis yesterday.

The low risk perception then leads to the inflow of overseas capital to government bonds market so as to increase the price and capital gain and plunge the return.

Based on the data of the directorate, the total overseas possession of the government bonds in October 2009 rose up to IDR8.39 trillion into IDR101.62 trillion from September IDR93.23 trillion.

The data last week mentions the soaring overseas ownership went along with the growing government bond traded from IDR567.37 trillion end of September into IDR574.97 per October 29.

As from IDR574.97 trillion, bank owns IDR256.09 trillion, BI IDR23.21 trillion, mutual fund IDR44.20 trillion, insurance IDR70.50 trillion and pension fund IDR37.56 trillion, securities IDR640 billion, and other parties IDR41.15 trillion.

Bond analyst of PT Trimegah Securities Tbk Ariawan said the overseas investors placing their funds on global bonds have long term investment horizon and thus the trade is not liquid.

Yesterday the government sold three series of SUN worth IDR3.55 trillion as from four bonds series offered. The incoming bid stood at IDR5.14 trillion. the number of divested SUN was higher than the indicative target of the government's formerly set target of IDR3 trillion.

Yield set by the government for FR0036 series is 10.25 percent, FR0044 at 10.65 percent, and FR0052 in 10.76953 percent.

Ariawan said the tender was successful noting that the bidders called for relatively low yield so the government could sell the investment instrument here in large quantities.

The tender yesterday could minimize negative sentiment among investors and bolster SUN price with potential pressure to the yield by 5-10 bps up to next weekend. (Bisnis/rni/21)

Return of 71 equity fund declined: Investors recommended starting buying investment product

as published in Bisnis Indonesia daily

Selasa, 03/11/2009 00:00 WIB

Return of 71 equity fund declined
Investors recommended starting buying investment product

JAKARTA: Some 71 equity funds booked the average return drop of 4.89 percent in October or higher than the plummet of Jakarta Composite Index (JCI) of 4.45 percent.

JCI on October 1, 2009, was on the level of 2,477.97 and declined 4.45 percent into 2,367.70 per October 30.

Amidst the falling participating units of mutual fund value due to the stock price drop which becomes the investment product portfolio, some investment managers recommended investors with long term investment horizon to buy mutual fund.

President Director of PT Fortis Investments Eko Priyo Pratomo said when the capital market condition is fluctuating like now, investor conversely enters and buys investment instruments when the price is low.

"Particularly for new investor, it'd better for them to play with mixed mutual fund which provide quite significant return and could maintain the falling price on the plummet," he said to press last week.

Director of PT Paramitra Alfa Sekuritas Ukie Jaya Mahendra said the investors needs no worry about the performance drop last month as mutal fund performance could not simply be seen from a month performance.

Daily data of mutual fund from Bisnis in October shows the Paramitra Premium, Makinta Mantap, Batasa Equity Syariah, BNI Dana Berkembang, and Jakarta Blue Chip booked the largest drop among the similar mutual funds.

Paramitra Premium booked negative return of 17.58 percent, Makinta Mantap 14.66 percent as from early October.

Investors are recommended to buy mutual fund unit with the assumption of better capital market.

"Optimistically this will be the beginning of next bullish trend, and it is time to buy."

Ukie said comparing to the return of April of about 79 percent a month, he was optimistic that the mutual fund here could provide returns amidst the better capital market this year.

Eko said for the new investors with long term investment horizon are recommended to buy mixed mutual funds product noting that the stock price drop will be limited by the bond portfolio which has more price resistance than stocks.

Based on data of the Finance Minister Debt Management directorate general, government bonds ownership of the investment managers October 2-30, 2009 increased IDR3 trillion from IDR42.21 trillion into IDR44.21 trillion.

Stock investment instrument as part of the portfolio could provide lucrative return to the investors when there is bullish pricing.

"So, there will be no missing momentum of the price drop or rise."

For investors with long term investment horizon, investors could opt for dollar cost averaging (DCA) method prioritizing periodical investment with fixed amount.

So, investor buys mutual fund once in large amount and continues to buy at standardized amount in fixed and discipline ways so that it would not miss the chance when the market is bullish or bearish.

Manager Mutual Fund Sales of PT Schroder Investment Management Indonesia Liza Lavina said mixed mutual fund with almost balance combination could help new investors to start their investment at capital market.

"Let alone when the condition is still unstable and unpredictable such as the current situation."

Liza said to prevent from investment risk investors should diversify their mutual fund product.
"Investors could adjust the product by adapting to the investment horizon." (Bisnis/21/rni)

Hendrata Sadeli : 'Do not turn off the small players'

Hendrata Sadeli : 'Do not turn down the small players'

JAKARTA: PT Panin Sekuritas Tbk have been 20-year-old, only 12 years ago after the stock market re-activated in 1977. Securities companies that had called PT Panin Sekuritasindo and PT Nusamas Panin before, now has a wide range of investors and a long history in the capital market.

With new management, Bisnis interviewed Panin Sekuritas's President Director Hendrata Sadeli after the company anniversary celebration at the Hotel Indonesia at the weekend. Here among the following interview:

What strategic plan Panin Securities plan to gain more and more investors?

We will be intensifying online trading through Panin Securities Online Stock Trading [POST] which was launched last year, it makes investors easier to trade. We will also build a few more branches next year, some of them in Semarang, Bali, Makassar, and Palembang.

What are the constraints to build local new branch offices?

One for looking for human resources who are competent because it would be ineffective if we will flew employees from Jakarta to the regions. Companies should have to educate future leaders from the region of origin or find the already prepared person.

What can be extracted from the area's native human resources?

Potentials such as the introduction of the influential figures in the area and type of investment demand, making it easier for the marketing strategy and approach to the community.

Potential investors and liquidity in the region oustide Jakarta is still big?

Still very large, especially since the regional autonomy that makes liquidity accumulated there. Unfortunately, the majority of Indonesian people in the area do not understand the investment other investment type than in a bank or savings deposits. It is to be one heavy duty for the authority the stock and the capital market.

Related with the plan pf separation function of securities and investment manager that will be set by the capital market and supervisory agency (Bapepam-LK/Badan Pengawas Pasar Modal dan Lembaga Keuangan) next year, will Panin Sekuritas ready to separating the two divisions?

We are already ready for it, but there are some investment managers or small-scale securities company that are not ready to separate themselves because of the demands of large capital necessity Rp25 billion.

But his goal to improve the quality of the industry players?

Indeed, but hopefully there are other ways that can improve quality without having to turn out the small players. Like us, once we were so small, but we can be as big as now because of the support industry. Capital market can bis as now because the player going forward together and it should continue that way, going bigger together and not leave the others.

What is the net profit target this year end?

We aimed for Rp150 billion [the company's net profit in the 3rd quarter posted for Rp133, 24 billion, Rp182,78 billion from business revenue, and Rp27, 57 billion from margin financing profit].

Interviewer: Irvin Avriano,

Bisnis Indonesia's Contributor

Theories about Optima's acquisition by Garuda Capital

Theories about Optima's acquisition by Garuda Capital

Numbers of theory float up to the surface, when several news about acquisition plan of Optima Group by PT Garuda Capital Investama blown in many newspaper in a week or two. A few of my colleagues in capital market have their own theory that cames from reading clues and hear stuff related with the issue and know from another sources.

Optima Group consists of PT Optima Kharya Capital Securities and the subsidiary PT Optima Kharya Capital Management. Optima Securities taking care of brokerrage and underwriting business, when Optima Management controls the investment management and keeps their mutual funds growth.

The sources said Garuda Capital is founded by political deal between the existing government with the owners of money that parked in the outside of Indonesia. The value of the runaway asset is estimated more than Rp100 trillion.

As we know, many account made in foreign country around 1998, after the turbulance of economic crisis rise up, and the dictatorship of five-star-General President Soeharto was collapsed by chaos and strikes in Jakarta and other cities.

Mostly, the account keeps the hot money in tax haven such as Switzerland, British Virgin Island, Singapore, Cayman Island, and many place around the world.

They said, the problems of defaulting discretionary fund (KPD/kontrak pengelolaan dana) that happens in the Grup Optima in these one or two years make the company's price sinking to the lowest level.

What makes them think that way? Just one name, Subur Budhisantoso, former Chairman of Democrat Party, the winner of two national elections who brings Susilo Bambang Yudhoyono (SBY) to the throne of president of the nation for the second period.

Subur's name and conviction in many newspaper said that the person is just one of officials came from the blue-starred-party to control the company. Many officials from Democrat Party, he said, also taking care of investment that will flew in from many countries, especially USA.

The story flow to the intension of SBY's will to bring 'home' the hot money back to Indonesia, to finance many projects in the real sector of economy, to build power plants, factory, bridges, houses, and several dam. The money laundry method also associated with the SBY economic growth targets about 6-8% in the next 5 years.

The agreement itself have issued before the time of SBY, when Abdurrachman Wahid sit on the Indonesia's No.1 hot chair. Because of the short term of the presidential of the theologian leader that have a several physically limitations, the plan was sinking. And the plan didn't run well when Megawati Soekarnoputri comes up to the president throne because too many officials in the period see the same thing.

The flight of the money from the hot account should be camouflaged, so it intends to flow through capital market. The capital market 'toll way' will be the easiest way for the 'washed' money because it won't detected by the central bank (Bank Indonesia) or Center of Reporting and Analysis for Financial Transactions (PPATK/Pusat Pelaporan dan Analisis Transaksi Keuangan).

What makes the theory is convincing were because there is no doubt about the interconnections between the party and Garuda Capital, and no argue about the intention of Garuda Capital to taking care of Optima Group.

Several things that make the first theory is vulnerable is about the existing of Garuda Capital itself, the competency of Optima Group that decent to earn the acquisition, or the possibility of the rumors was blown by the Optima Group itself to keep the client confident and stay loyal the company.

The camouflaged way also preferred by the related officials neither from Democrat Party or the SBY's cabinet because it won't be monitored by The Capital Market and Finance Institution Supervisory Agency (Bapepam-LK/Badan Pengawas Pasar Modal dan Lembaga Keuangan) as long as the investment management have a will to keep the investors identity save. It is reasonable because Bapepam-LK don't have any authority to revealed the source of investment money.

The existing of Garuda Capital is doubted when their office can not found. Many reporters in the capital market adds that the Garuda news rumors supplied by numbers people that have many projects to advertise news in industry with certain pay. It's indicating that the rumors is driven by people that willing to make purposive stories in the capital market.

The second reason is because the Optima don't worth to bailed out by any buyers, because they already have many problems to resolve. Their problems include the legal case filed by former Optima Management's CEO, Antonius T.P. Siahaan to his former business client, Optima Securities' CEO and owner of Optima Group, Harjono Kesuma.

Antonius manage the discretionary fund and runs many mutual funds, but the investment asset in the discretionary fund hooked in the repurchase agreement (repo) that conclude shares of companies from Bakrie Group. He claims that the defaulting investment are not his responsibility, want to clear his name from the company's problems, and don't want his asset value in the Optima decline that caused by market downturn in the late year.

Many source said that defaulting asset in Optima's discre is caused by Bakrie's shares repo, that havent reach the target value. And its make the investment can not be pulled by the client in the short term, as long as the value doesn't match with the target.

The newest issue of Optima Management is the announcement of Harjono Kesuma and Chief Financial Officer of PT Kereta Api Indonesia (KAI) Achmad Kuntjoro being suspect in a corruption case in the state-owned-company. The case which filed by board of commissioner of KAI were still related with discretionary fund managed by Optima. The investment worth Rp100 billion.

The KAI investing fund worth Rp100 billion in Juli into the discretionary fund, which promised to make gain around 20%. But the investment managers can't pay off when the investment matured.

So, Optima Group management asked Achmad Kuntjoro to reconstruct the called two-way-agreement and promised to settled in a few months. The reconstruction itself is disputed by the board of commissioner and give the issue to the Ministry of State-Owned-Company.

Lidyawati Herdianto, Head of PR & Promotion Optima Group said that the company are keeping to held the installment of restructured discretionary fund until the rollover of company's ownership and management is finished.

She says the several mutual funds that managed by Optima Management itself worth around Rp2 trillion. But she assured that the investors of company's mutual fund still can redempt their investment because it is placed in bank as the investment product's custody.

Bapepam-LK was also still investigate the Optima Group's management related with the suspension of Optima Securities' activities in the stock exchange and related with the defaulting of discretionary fund entrusted by the company's client.

"The investigation process still going on, and I can't tell anything related with the issue because I were prohibited by the law," says Inspection and Investigation Bureau Chief of Bapepam-LK Sarjito to the press last week.

The Indonesian Stock Exchange (IDX/Bursa Efek Indonesia) Director of Trading and Controlling on Exchange Members Wan Wei Yiong said that the suspension was caused by the rollover of the ownership and management. But none of the reporters in the capital market buy that none sense statement.

The more reasonable cause that Wei Yiong told about the Optima Securities activity suspension is less-managed documentations related with stock trading and brokerage, the stuff that will related to something else that bigger than this problem.