Thursday, November 19, 2009

Tesco & Walmart to Enter Indonesia

For full story please visit the original source: VIVA News

VIVAnews – The modern national retail market will be penetrated by two retail giants, UK-based Tesco and US-based Walmart. The foreign penetration in the retail sector is seen improving according to the Indonesian Association of Retailers (Aprindo) chairperson Benjamin J. Mailool.

“We cannot limit the foreign players to enter our retail sector and this trend is inevitable,” he said in Jakarta on Tuesday nught, Nov. 17.

Walmart and Tesco have listed Indonesia as one of the important destination countries for their future investments. “It is a matter of time [since] Indonesia is now seen as [an expansion destination] for them,” he said.

Mailool predicted that Walmart and Tesco will enter the Indonesian market through merger system. “If they directly set up new [outlets], it will be difficult,” he said.

A-to-Z of all that's good in Bali

For full story please visit the original source: The West Australian

While never being a fully committed card-carrying "I don't do Bali" traveller, Ray Wilson determined that his previous trip to Bali in 1992 might well have been his last.

Recently, however, he gave it one more shot - and this is what he discovered in his A-to-Z re-awakening.

Accents: Isn't it funny, the only time I get irritated with the Aussie drawl is when a foreigner tries it on. Remember Meryl Streep playing Lindy Chamberlain in Evil Angels? Terrible. Unfortunately in the back lanes of Kuta and Legian in particular, some of the local store holders bark entreaties in an accent broader than any you'd find in Meekatharra. But I'm told that to be teased in Bali is to be accepted, so maybe I've read it wrong.


Zebra crossings: They exist in Bali and on the major roads around the Kuta strip to Seminyak, but don't bet your life on the road rules bearing any semblance to ours. The worst drivers in Bali are young Australians on scooters or motorbikes. Mad Max and Casey Stoner all rolled into one. And, it's not as if the police are there as any great deterrent. One driver told us that it was compulsory to wear seatbelts in cars - there are none in backseats of cabs - and while the fine was around $120 in a court, the "pocket" fine was only $12. Enough said.

Tuesday, November 17, 2009

Garuda Invited to Resume Flights to the U.S.A.

For full story & graphics please visit the original source: Bali Discovery

-F.A.A. Offers Technical Assistance to Indonesian Government and Garuda to Help Restart Flight Service to the U.S. West Coast.

Bisnis Indonesia reports that the U.S. Government has invited Garuda Indonesia to re-open its long-abandoned direct flights between the U.S.A. and Indonesia with assistance from the U.S. Federal Aviation Agency (FAA).

Garuda terminated its flights to Los Angeles in mid-1998 that operated on a route that traveled in both directions between Jakarta - Bali - Biak - Honolulu - Los Angeles.

The Minister of Transportation for Indonesia, Freddy Numberi, told the press that the U.S. invitation was delivered by U.S. Ambassador to Indonesia Cameron R. Hume after Indonesian aviation was moved from a cautionary category II rating to the more exemplary category I rating. Said Numberi, "this offer looks to be a good opportunity for Garuda and all of Indonesia."

Friday, November 13, 2009

Indonesia: the price of volatility

For full story & graphics please visit the original source: Trustnet

Indonesia has proved an unlikely investment opportunity in the last ten years, or is the real winner volatility?

In the past 12 months the Indonesian index returned 107.24 per cent. Compare that with MSCI Thailand returning 53.33 per cent, MSCI Singapore 49.95 per cent, and MSCI Malaysia 46.66 per cent.

But, before betting the farm on this market rather than its neighbours or the typical portfolio core of UK equities and fixed income, it is worthwhile taking a look at what level of volatility investors were required to put up with in order to achieve such returns. Over the past three years this has clearly been the case.

Financial Express data suggests annual volatility for the MSCI Indonesia index was 42.68 per cent, set against an annual return of 22.95 per cent.

Compare that with the far lower volatility of 20.46 per cent for MSCI Malaysia against annual return of 19.85 – ie, not far off its neighbour. However, over the past decade Indonesia has still done better on this basis. Annual return averaged 14.22 per cent with volatility of 38.53 per cent, against return of 2.3 per cent and volatility of 28.27 per cent for Malaysia.

Thus, one could argue that the long term investor in the country has not necessarily had to take on much more risk in order to get superior returns against other markets nearby.

Unfortunately, it is not all that easy to buy into the country via country specific funds – beyond exposure gained through broader regionally focused ones.

Filtering out those with less than a 50 per cent weighting to the country leaves just seven to consider. One of these is Aberdeen’s US listed closed ended Indonesia fund, which came to it by way of the purchase of Credit Suisse assets earlier this year.

What is noteable is investors will have to look to the offshore funds universe. Ignoring the country on that basis would, though, be missing a number of points. Indonesia is one of the world’s most populous countries; it is next door to one of the strongest growing OECD members – Australia, which raised interest rates for the second time in two months last week – and serves as a resources provider for big importers such as China. The country’s GDP is projected by the IMF to grow 4 per cent in real terms through 2009, and 4.8 per cent in 2010.

Dhananjay Phadnis, manager of the Fidelity Indonesia fund, outlined two key changes in a recent note. The currency has appreciated, helped in part by rating agency Moody's upgrade to the country's sovereign debt by one notch to Ba2. The other was the re-elected government taking office in October, with promises of employment generation and infrastructure development leading Phadnis to increase real estate exposure.

"The Indonesian stock market does not look cheap in the Asian context, however, the lowering of input prices due to a strong rupiah and a recovery in demand will likely provide scope for earnings to surprise on the upside when companies report their third quarter performance," Phadnis wrote.

Thursday, November 12, 2009

When It's Easy to Get Credit Cards in Indonesia

Original source:

The value of stagnant credit or non-performing loan (NPL) for credit cards is still high. Based on the Indonesian Banking Statistics (SPI), the value of credit card NPL per September 2009 is Rp. 2.95 trillion, or 8.7 percent of the total outstanding credit that reaches Rp 33.63 trillion.

Since July 2009, the credit card NPL value has seemed reluctant to go below 8 percent. Per August, the NPL ratio was still 8.8 percent with the value of Rp. 2.89 trillion and total credit of Rp. 32.82 trillion.

Business Director of PT Bank UOB, Buana Safrullah Hadi Saleh said, the high NPL for credit cards is due to banks being more aggressive in persuading customers to use credit cards. "This is evident from the ease of the process to issue a new credit card. Sometimes without selecting the customer," he said.

According to Safrullah, the NPL ratio for credit cards that exceeds 8 percent is a warning for banks to be more careful in issuing new credit cards, "The normal NPL for credit cards should be around 7 to 8 percent," said Safrullah.

Mansyur S. Nasution, Executive Vice President for Consumer Credit of Mandiri Bank, affirmed Safrullah's opinion. "If the credit card NPL was lower, banks would be safer. The credit card business then could run better," he said.

Though the NPL value as stated by SPI is still high, our interviewed banker stated that the NPL in their establishment is low. In Mandiri Bank for instance, Mansyur said that the NPL ratio per September 2009 is only 2.74 percent.

Meanwhile, UOB Buana, having issued 170,000 Platinum credit cards, confessed that their NPL ranges from 3 to 4 percent. "Most of our customers can still fulfill their obligations," said Safrullah.

The same goes for Citibank that has issued 1.6 million credit cards in Indonesia. Citibank Country Marketing Head, Rico Frans, stated the bank had not seen any increase on NPL.

"Our NPL is still in the low single digit and still stable since last April," he stated. Strict requirements for credit cards and annual debtors' review are the keys to suppress credit card NPL

Can Indonesia's "Hamburger King" topple McDonald's?

For full story please visit the original source: GlobalPost/ Sara Schonhardt

Would you buy a burger from a one-eyed pirate named Toni Jack? That's the hope of one Indonesian entrepreneur, whose roguish answer to Ronald McDonald also claims his burgers are “better than that one.”

The slogan is Bambang Rachmadi’s attempt to differentiate his new brand from the world’s largest hamburger chain – a company he held majority rights to until McDonald’s sold his stake in March.

Bambang, the self-described hamburger king of Indonesia, claims he was not notified of the sale of his $135 million in assets, which a company spokeswoman described as “personal." He is pursuing legal action against the corporate behemoth.

In the meantime, Bambang has transformed his 13 owner-operated McDonald’s into Toni Jack’s, a step he said was necessary to save the jobs of about 800 employees.

So last month, a McDonald's in central Jakarta disappeared under a black tarp with the Tony Jack’s logo: a pirate whose hat bears a burger crossed by a fork and spoon.

The 97 McDonald’s restaurants that remain in Indonesia now belong to sole franchisee PT Sinar Sosro, producers of the country’s leading bottled tea brand. Sinar Sosro says it aims to open as many as 75 new restaurants over the next five years, which helps sweeten the new partnership

Toni Jack’s has continued that approach with a menu that — despite the lack of halal labeling — is nearly identical to McDonald’s. But according to company spokeswoman Tetty Hutapea, the taste is "different."

“The meat is not good, and there are fewer choices for burgers,” said Aouini Nabil, a security guard from Paris, while poking at the remains of the chicken burger on his tray. His fiance Rento Utami said Toni Jack’s seemed to draw fewer customers, particularly teenagers and tourists.

A Spanish Embassy worker who entered the restaurant thinking it was still McDonald’s said he was surprised by the change but decided to give Toni Jack’s a try because he was short on time. Although he finished his burger, he said the taste was "not great."

Others were more positive about the switch. Fransesko Laban, an employee with an international NGO, stayed to do some work after finishing his Chicken Jack meal. He said he prefers Toni Jack’s to McDonald’s because it is clean and smoke free.

Bambang also plans to open several new branches in the year ahead, with a goal to franchise the restaurant to other countries in 2014.

For now, spokeswoman Tetty Hutapea said it’s too early to gauge Toni Jack’s sales performance but said that business is “stable.”

The loss of 13 restaurants may not make much of a dent in the global presence of McDonald’s, which operates 31,000 around the world. But it doesn’t do much for the company’s image in a region where it has faced more than one legal tussle recently..

Suzuki to relocate motorcycle plant from Thailand to Indonesia

For full story please visit the original source: Antara News

Japanese automotive company Suzuki plans to relocate its motorcycle plant from Thailand to Indonesia in 2010, citing the huge market as one of its reasons.

"Suzuki originally wanted to develop (motorcycle industry) in Thailand but it later decided to switch to Indonesia," PT Suzuki Indomobil Motor (SIM) President Director Yoshiji Terada said.

The other reasons behind the company`s plan to relocate the plant were that Indonesia had large oil/gas, non-oil/non-gas potentials and high demand for transportation means, he said.

Previously, Terada said the company would raise its investment in Indonesia by US$50 million to increase its production capacity by 40 percent next year.

PT SIM would also launch at least seven new types of motorcycles, including those of skutic type. But most of the new products would be underbone and backbone motorcycles, he said.

After 5 year absence, Garuda Indonesia returns to Europe

Original source (click to view full story): eTN News

Garuda Indonesia will return to Europe beginning June 1, 2010 after an absence of five years. The introduction of daily services from Jakarta to Amsterdam via Dubai marks a significant step forward in the airline's global network expansion strategy. Amsterdam will be the first of a number of key European cities such as Frankfurt, Paris, and London. Garuda Indonesia has planned for its European expansion over the next few years.

The Amsterdam route will initially be serviced by the airline's fleet of technically advanced A330-200 aircraft, featuring Garuda's new exterior and interior design inspired by the energy of nature's wings. In executive class, the aircraft offers fully-reclining, flat-bed seats with 74-inch seat pitch. The A330-200s will operate in a two-class configuration carrying 222 passengers, with 36 in executive class and 186 in economy class.

Garuda Indonesia currently has 10 Boeing 777-300ERs aircraft on order for delivery commencing 2011, which will then allow the airline to operate non-stop from Jakarta into Europe.

The new A330-200 aircraft features individual touch-screen LCD screens in all classes; the state of art inflight entertainment system with Audio & Video On Demand (AVOD) delivers a choice of 25 feature films, 250 audio tracks, and 25 video games.

Effective from June 1, 2010, the planned schedule is: Garuda (GA88) departing Jakarta (CGK) at 2100 WIB (GA88) arriving Dubai (DXB) at 0209 LT, departing at 0315 LT and arriving in Amsterdam (SPL) at 0800 LT. From Amsterdam (GA 89) departs at 1000 LT, arriving in Dubai at 1830 LT, departing again at 1945 LT and arriving in Jakarta at 0710 WIB. Fares to and from Dubai and Amsterdam will be announced shortly.

Tuesday, November 10, 2009

Indonesia teen who amputated his leg recalls earthquake ordeal

For full story please visit the original Source: Los Angeles Times/John M. Glionna

Ramlan, who was working in Padang, Sumatra, when the 7.6 quake struck, knew he didn't want to die there. Now a celebrity, he says he merely 'did what I had to do to stay alive.'

Reporting from Galudra, Indonesia - The teenager lay dazed amid the settling dust and debris, his leg trapped by a fallen concrete wall. He sensed that he was going to die. So he made a decision: He would cut off his own limb to save his life. Ignoring the major blood loss, taking deep breaths as he concentrated on the terrible task at hand, the 18-year-old construction worker cut halfway through his right leg just below the kneecap.

Finally, too weak to continue, he begged for help, and a fellow worker finished the job for him in the aftermath of the magnitude 7.6 earthquake that struck Sumatra in September.

"I didn't want to die in that place," said the teenager, who goes by one name, Ramlan. "I did what I had to do to stay alive."

Every disaster delivers its own tales of bravery and superhuman strength. Amid the news reports of his exploits, Ramlan has become a hero across Indonesia, a survivor whose sheer will to live drove him to do the unthinkable.

Monday, October 26, 2009

Indonesia edging closer to securing an investment-grade ratings status

Source (click to view): London Stock Exchange/Reuters

Indonesia, which has seen a flood of foreign investment this year, is edging closer to securing an investment-grade ratings status for the first time since the Asian financial crisis in 1997-1998.

Standard & Poor's on Friday revised its outlook on Indonesia's sovereign debt rating to positive from stable, citing expected improvements in the country's debt profile following economic reforms.

A fund manager at PIMCO said in a report that Indonesia could regain its high-grade status in 3-4 years as long as government policies focus on long-term growth.

An high-grade rating would mean increased investment by funds that, according to their mandate, can only buy high-grade rated debt.

For S&P and Fitch, the lowest investment-grade credit rating before junk is BBB-minus. For Moody's it is Baa3.

History of Indonesia's sovereign debt ratings…(see the source)

S&P ups Indonesia rating outlook to positive – Alibaba News/Reuters
Pimco Says Indonesia May Win Investment Grade Rating - Bloomberg