Readwrotes Blog

The World Bank boosted its growth forecast for China and said rising inflation should level off but warned Beijing needs to make the economy less reliant on trade to sustain its expansion. In a quarterly update released Wednesday, the bank said China's politically contentious trade surplus is likely to swell further in 2011, though it cautioned that weak global demand means Beijing shouldn't rely so heavily on exports. The bank raised its 2010 growth outlook from 9.5 percent to 10 percent and its growth outlook for next year from 8.5 percent to 8.7 percent. Growth eased in the third quarter to 9.6 percent from 10.3 percent the previous quarter as Beijing tried to steer it to a more manageable level. "Growth is likely to moderate somewhat more in 2011 and the medium term to a still robust pace," the bank said. Despite a largely upbeat outlook, the bank said Beijing needs to do more to boost domestic demand and cut reliance on exports and investment. Comm...

The planned joint venture between state-owned PT Krakatau Steel (KS) and South Korean-based company Posco may be in limbo after State-Owned Enterprises Minister Mustafa Abubakar suggested Krakatau prepare a "plan B". "I have told the *Krakatau* management to settle the negotiation *with Posco* this year, or prepare a new plan, like constructing a new steel plant itself," Mustafa told reporters in Jakarta on Friday. Mustafa said that although the steel plant without Posco's investment would have to operate on a smaller scale in terms of production capacity, the plant will be able boost Krakatau's steel production and generate additional income. "The capacity *of the new plant* may be about one million metric tons of steel plate annually, smaller than five million tons, which had been planned in the joint venture," he said. Posco and Krakatau planned to set up a joint venture to construct a steel plant in Tangerang, Banten,...

 The Jakarta Post, Jakarta | Wed, 05/12/2010 8:49 PM | Business Finance Minister Sri Mulyani Indrawati installed on Wednesday 24 new second echelon officials in the last inauguration ceremony she presided over before her departure to Washington DC. The ceremony looked like a farewell party, with Mulyani handing over her unfinished jobs, particularly the landmark bureaucratic reform, to all the Finance Ministry employees. “I put my hope in you, because this will be the last time I install new officials. I want you all to become my representatives, face, dreams and hopes. As you have been with me for a long time and know my character well, I believe you understand what I want,” Mulyani said as quoted by kompas.com A journalist covering the event could not hold back tears, while many Finance Ministry officials opted to look down. President Susilo Bambang Yudhoyono has approved Mulyani’s resignation, which will allow her to take the World Bank managing directo...

The Associated Press , Hong Kong | Fri, 02/26/2010 2:15 PM | Business Asian stock markets climbed Friday as more evidence Japan's economy was turning around added to optimism about the region's economic prospects. The move higher bucked selling in the U.S. and Europe overnight. The euro, meanwhile, regained some ground after concerns over Greece's mounting debt crisis pulled the currency lower the day before. Oil prices headed toward $79 a barrel. Japan's economy, the world's second biggest, showed more signs of recovery. Factory output, a key measure economic health, rose a better-than-expected 2.5 percent in January from the previous month, the government said. Shoppers were also in a better mood last month, sending retail sales surging nearly 3 percent, the most in about 2 1/2 years. In Tokyo, the Nikkei 225 stock average rose 24.07 points, or 0.2 percent, to 10,126.03 and Hong Kong's Hang Seng added 259.89, or 1.2 p...

Aditya Suharmoko , The Jakarta Post , Jakarta | Wed, 02/24/2010 10:41 AM | Business The Industry Ministry wants more support from banks to boost lending in support of growth in the real sector, Industry Minister Mohamad Suleman Hidayat said as he planned to meet the central bank and bankers for talks on Wednesday. “I want banking support to industries to increase. In the 2008-2009 period bank lending to all sectors of industry increased between 18 percent and 19 percent. This had dropped from five or six years ago, when lending growth had reached 20 percent,” Hidayat said speaking to representatives of the foods and beverages industry in his office Monday night. He said he would arrange a meeting with Bank Indonesia (BI) and bankers on Wednesday to discuss the issue. “I will make a presentation that in the industry sectors we also have programs [to promote lending],” he said, as reported by detik.com. As of the end of last year the banks chan...

By Michael Bowman Washington 13 August 2009 Shoppers move through the check-out line after a shopping trip to Wal-Mart in Tallahassee, Florida, 11 Aug. 2009 One day after the U.S. central bank signaled a possible end to America's longest recession since World War II, new data suggest continued weakness in several economic sectors. Less than 24 hours after the Federal Reserve proclaimed the recession to be easing, the United States has been hit with a quadruple batch of somber economic news, with retail sales down, business inventories cut, jobless claims up and home foreclosures hitting a new record high. Instead of the modest gain economists had been expecting, U.S. retail sales dipped .1 percent in July. Lakshman Achuthan of the New York-based Economic Cycle Research Institute says even a slight drop in sales has consequences. "You are talking about an [American] economy that is almost $14 trillion...

Dian Estey | Sun, 08/02/2009 12:36 PM | Headlines I started receiving messages about “getting rich, quick and easy” a few months ago. First, it was a one-off random message from someone I hadn’t seen for a long time and then messages started coming more often and from more people – good friends and family members. I also started receiving the message in different ways: email, SMS, Facebook message, Facebook note, blackberry messenger, Yahoo! Messenger, and finally, in a more conventional way: a phone call. The phone call pushed me to do more than just say no or ignore the message. I agreed to look into it while at the same time telling the caller I was not interested for two basic reasons: I do not have good business skills, and I don’t believe in getting rich quick and easy. A quick click on the link brought me to a page wallpapered with dollar notes (I think this alone is a turn-off, but let’s not try to get personal with taste). I read the explan...

By Mil Arcega Washington 24 July 2009 The benchmark Dow Jones industrial average of the top US companies broke the 9,000 point mark Thursday on strong earnings reports and an improving housing picture. Wall Street extended its recent gains Thursday after a new housing report showed sales of previously owned U.S. homes rose at an annual pace of 3.6 percent in June. It was the third straight month of rising home sales. "The markets are reacting to the news today in the context of other things they've been seeing and reading in recent weeks, and that's that the economy does appear to have hit a bottom," said David Resler, chief economist at Nomura Securities. Investors reacted positively to earnings reports from Ford, Ebay, AT&T and higher sales of Apple's new iPhone. Resler says the positive earnings give a much needed confidence boost for the struggling U.S. economy. "I think...

By Katie Hamann Jakarta 22 July 2009 Indonesian business leaders remain upbeat about the country's economy despite the recent suicide bomb attacks at two luxury hotels in the capital Jakarta. Business analysts say investor confidence in the country remains high. Tourist operators are also optimistic, saying cancellations have been limited. The chairman of Indonesia's Chamber of Commerce, M.S. Hidayat, says while the Indonesia stock market and the rupiah fell moderately the day of the bombings, they have since recovered. Hidayat describes the economic damage from last Friday's bombs as "minor turbulence." Security guards man a gate outside the bombed Ritz-Carlton hotel in Jakarta, Indonesia, 22 Jul 2009 Two suicide bombers killed seven people and injured more than 50 at the J.W. Marriott and Ritz-Carlton hotels. Both are Western-owned chains popular with foreign travelers and Indonesian b...

The Jakarta Post , Jakarta | Sat, 07/18/2009 4:15 PM | Jakarta Trade Minister Marie Elka Pangestu brushed off Saturday public fear that Friday's hotel bombings would impact trade. "There's no need to worry," she said during a visit to the Kramat Jati wholesale market in East Jakarta. "The state will guarantee the availability of basic commodities." After extending condolences to the families of victims of the bomb blasts, she encouraged traders not to let the terror attacks disrupt their business. "Trading must go on as usual," she said. (dis)

The Jakarta Post , Jakarta | Thu, 07/16/2009 12:44 PM | Business Exports of ceramics are expected to rise this year due to the continued strengthening of the rupiah against the US dollar, an association says. "Exports may increase this year due to the strengthening of the rupiah following the success of legislative and presidential elections," Achmad Widjaya, chairman of the Association of Indonesian Ceramics Industry (Asaki), said Wednesday in Jakarta. The local currency recently touched levels of around Rp 10,000 against the greenback, from a previous Rp 12,000 in April. Achmad said a stronger rupiah would lower production costs, because ceramic production used natural gas as fuel, which was paid for in dollars. With lower production costs, manufacturers can sell their products in overseas markets at a more competitive price, eventually boosting demand, he added. In 2008, the value of ceramic exports reached more than US$274 mil...

Aditya Suharmoko , The Jakarta Post , Jakarta | Tue, 07/14/2009 10:27 AM | Headlines The government plans to include an article excluding portfolio investment from its so-called negative list of investments (DNI) in a bid to provide certainties for investors entering the Indonesian market, a ministry official says. Under the revision of the 2007 presidential regulation on DNI, there is a proposal to differentiate investment done through portfolio schemes and direct ways - termed foreign direct investment (FDI), Edy Putra Irawadi, deputy to the coordinating minister for the economy, in charge of industry and trade, said Monday. It is aimed to reaffirm Law No. 25/2007 on investment, which states portfolio investment is not categorized as investment and represents transactions or holdings of securities such as shares, bonds, or other financial assets. "It *the implementation of DNI* hasn't been effective all these times. There is no certa...

Alfian , The Jakarta Post , Jakarta | Mon, 07/13/2009 11:26 AM | Headlines PT Multicapital, a subsidiary of mining giant PT Bumi Resources, has won a tender to finance the acquisition of 10 percent of shares in PT Newmont Nusa Tenggara (NNT). A consortium of three regional administrations in West Nusa Tenggara province announced Sunday that of all six contenders, Multicapital had "the highest score in all criteria". The consortium - comprising the provincial, Sumbawa regency and West Sumbawa regency administrations - will need US$391 million for the share acquisition, as previously agreed with NNT. "Multicapital will finance all the required costs," Heryadi Rahmat, head of provincial energy and mineral resources office, said Sunday. He added one of considerations in appointing Multicapital was because its parent company, Bumi, had a core business in mining. US mining giant Newmont Corp, NNT's main shareholder...

Nurkholisoh Ibnu Aman , Surabaya | Mon, 07/13/2009 9:42 AM | Opinion Banks in Indonesia are being heavily criticized for being too slow to respond to monetary policy and for showing inefficiency in intermediation roles. Despite the aggressive cuts of the Bank Indonesia (BI)-rate in the past five months, banks remain reluctant to adjust lending rates. In comparison to December 2008, the BI-rate has been lowered by 225 basis points (bps), while the deposit and lending rates of banks went down only by 135 bps and 20 bps respectively. As a result, the gap between the deposit rate and the lending rate is increasing. Banks are now actually collecting higher revenue from wider discrepancies. To explain the behavior of such banks, we need to understand the cost structure of loanable funds. The first component is what is usually termed as the “cost of fund”, i.e. the interest paid to deposit customers for third party funds placed in banks. The ...

The Jakarta Post | Mon, 07/13/2009 9:31 AM | Opinion Indonesia’s stocks jumped and the rupiah posted big gains after last Wednesday’s peaceful presidential elections initially gave incumbent President Susilo Bambang Yudhoyono (SBY) and his running mate Boediono a landslide win against the two other contestants. The bullish sentiment reflects the great welcome by the market of a highly probable one-round election, instead of another run-off in September with all the risks of uncertainty during the remaining three months of the current SBY-Kalla administration. This also signals that the market and investors are quite comfortable with the SBY government and want it to continue governing the country for another five years until October 2014. The stronger seems to be the vote of confidence for SBY because the people rest assured that his vice president elect Boediono, a senior economist and former central bank chief with impeccable integrity, wi...

Aditya Suharmoko , The Jakarta Post , JAKARTA | Sat, 07/04/2009 10:22 AM | Headlines The central bank cut its benchmark interest rate Friday for the eighth straight month to 6.75 percent to accelerate bank lending, strengthening the already sound macroeconomic framework, and promoting a more robust real sector. The rate cut however leaves "limited" room for the central bank to cut its rate further ahead, Bank Indonesia (BI) said in a statement. BI has cut its rate by 275 basis points from 9.5 percent in November 2008 as inflation has slowed. "The cut is expected to facilitate the acceleration of lending," acting BI Governor Miranda S. Goeltom said in a press conference. "Latest data shows bank lending is quite high. It is expected banks can accelerate credit expansion." As of April, lending reached Rp 1,780.9 trillion, increasing from Rp 1,745.6 trillion in January, according to BI data. Judging by its ke...

Andi Haswidi and Aditya Suharmoko , The Jakarta Post , Tokyo/Jakarta | Tue, 07/07/2009 10:16 AM | Headlines Japan and Indonesia signed a new currency swap agreement Monday on which the latter will have access to an additional 1.5 trillion yen (US$15.7 billion) of reserves as a precautionary measure in the event of a financial crisis. “This currency swap scheme will serve as our second line of defense,” said Finance Ministry’s head of fiscal policy agency, Anggito Abimanyu, in Tokyo, representing the Indonesian government. Anggito was speaking to reporters following a meeting with Naoyuki Shinohara, Japan’s vice finance minister for international affairs, earlier in the day. Anggito said although the yen was relatively lower than the US dollar in terms of value, the large currency reserve would help Indonesia with significant leverage in warding off currency speculators. In Jakarta, Finance Minister Sri Mulyani Indrawati confirmed the agree...

Thomson Reuters 07.05.09, 11:27 PM EDT JAKARTA, July 6 (Reuters) - Indonesia's stock exchange (IDX) is considering an initial public offering (IPO) in order to raise funds for its expansion, the Jakarta Post reported on Monday, quoting the president director of the exchange. 'We hope the plan will unfold throughout the next three years of my tenure,' said Ito Warsito, newly appointed president of the exchange, the Post reported. IDX is currently owned by 119 securities houses, each with an equal voting right. Ito said the plan would take som...

The Jakarta Post | Fri, 06/26/2009 2:04 PM | Business Miniatures of ships exhibited in the Indonesian Creative Product Weekend Exhibition. The exhibition is held from Thursday to Sunday in the Jakarta Convention Center, showcasing software, printing, publishing, and various art and crafts products. (JP/Ricky Yudhistira)

Wahyoe Boediwardhana , THE JAKARTA POST , MALANG, EAST JAVA | Sun, 06/21/2009 1:18 PM | Discover (JP/Wahyoe Boediwardhana) Malang State Institute of Polytechnic (Polinema) in East Java is more than ready should the controversial law on educational institution taken into effect. The newly passed bill will transform state universities into business-like entities by cutting subsidy and entitle universities to generate money to pay operational cost, including by raising students' admission fee and tuition. While many concerned students and lecturers took to the street to stage protest over the new regulation, Polinema management cooperates with private business in selling fruit juice in plastic bottles. The whole processing and packaging of the drink trademarked Josiee are based on researches carried out by Polinema students and lecturers. The production itself is taking place in a building of Polinema Chemical Engineering. "W...