Company update: ANTM
September 01, 2014 10:25 WIB

Aneka Tambang (ANTM) posted net loss of Rp639bn in 1H14 vs. a profit of Rp374bn during the same period last year. The results were below consensus expectation on lower-than expected on the ferronickel and gold sales volume and higher-than expected loss in associates. The net loss was mainly attributable to a) lower profit from gold division, b) net loss on the nickel division and c) loss in associates and jointly controlled entity of Rp311bn in 1H14 vs. a profit Rp82bn in 1H13. We are reviewing our recommendation and target price. Read More


Trade Outlook August 2014
August 28, 2014 11:35 WIB

In June, Indonesia’s total exports reached US$ 15.4 bn, or up 4.0 percent MoM. On a YoY basis, they were up 4.5 percent. The higher exports stemmed from 5.6 percent YoY higher non oil and gas shipments. On a MoM basis, June’s exports were 4.8 percent lower in volume terms although, by contrast, the average aggregate prices surged 9.3 percent.

The exports of two major products - which accounted for 29.2 percent of non oil and gas exports - declined in June. Exports of animal and vegetable fats (HS 15) weakened 1.7 percent while exports of mineral fuels (HS 27) dropped 7.3 percent MoM. Despite this, the value of non oil and gas exports still rose, supported by stronger exports of other non oil and gas products such as electrical machinery, vehicle parts, and chemical products.

By destination country, June’s non oil and gas exports to Japan and the US remained firm. Shipments to Japan and the US strengthened by 4.5 percent and 9.3 percent, respectively, while, by contrast, non oil and gas exports to China dropped 7.9 percent MoM.

Strong demand during Ramadan and Idul Fitri led to higher import volumes in June. Import volumes were 5.6 percent higher, and average aggregate prices were up 0.8 percent MoM. As such, the value of Indonesia’s imports increased significantly by 6.4 percent MoM to US$ 15.7 bn. By product type, the imports of mechanical machinery and equipment (HS 84) surged 18.2 percent while imports of electrical machinery and equipment (HS 85) declined 0.5 percent.

Non oil and gas imports from Indonesia’s major trading partners strengthened. Indonesia’s non oil and gas imports from Japan rose the most (+21.6 percent), followed by non oil and gas imports from China (+5.9 percent) and then Singapore (+2.3 percent).

By classification, imports of all types of goods rebounded. Imports of consumer goods gained the most (+10.5 percent), followed by imports of capital goods (+9.6 percent), and imports of raw materials (+5.4 percent). In the first half of 2014, imports of raw materials accounted for 76.5 percent of Indonesia’s total imports.

In June, imports growth exceeded exports growth. This resulted in a trade deficit of US$ 305.1 mn. Cumulatively, in the first 6 months of the year, Indonesia’s foreign trade still shows a deficit of US$ 1.1 bn, yet far lower than the deficit of US$ 3.3 bn recorded in the corresponding period of last year. 

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CPI & SBI Outlook August 2014
August 28, 2014 11:38 WIB

Inflationary pressures picked up in July on seasonal factors related to Ramadan and the Idul Fitri holidays. In July 2014, the MoM inflation rate reached 0.93 percent. YTD the inflation rate reached 2.94 percent, whilst on a YoY comparison inflation showed an easing trend, falling to 4.53 percent, reflecting the high base effect from last year’s subsidized fuel price hikes.

On a monthly comparison, prices in all components of the CPI increased. The foodstuffs and prepared foods components increased by 1.94 percent and 1.00 percent, respectively. At the same time, prices in the transportation component also increased (+0.88 percent), followed by the clothing component (+0.85 percent), the education component (+0.45 percent), the housing component (+0.45 percent), and the medical care component (+0.39 percent). In July, higher demand and increasing spending led to significant increases in the prices of foodstuffs and prepared foods. Transportation spending rose as urban citizens tended to visit their hometowns. Education costs also picked up because of the start of the new school year.

For August, we predict that pricing pressures from foodstuffs and prepared foods will return to normal, and therefore ease. Nonetheless, prices in the education component will likely increase further due to the new academic year which begins in the July-September period.

Against this backdrop,inflationary pressures are expected to ease in August 2014. We predict inflation of 0.24 percent MoM, translating into YoY inflation of 3.75 percent.

In its August meeting, Bank Indonesia kept its benchmark BI rate unchanged at 7.5 percent, with the Lending Facility and Deposit Facility rates also stable at 7.50 percent and 5.75 percent, respectively. The central bank’s tight monetary stance is likely to continue, we believe, given the latest macro developments with the current account still showing a large deficit. The current account deficit reached US$ 9.1 bn (4.27 percent of GDP) in the second quarter of 2014, albeit down from a deficit of US$ 10.1 bn (4.47 percent of GDP) in the same period last year. As such, despite the prospects of benign inflation over the near term, we predict that the central bank will maintain the BI rate at its present level.

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Forecast For July 2014

Exports US$ 13.90 bn
Imports US$ 13.50 bn
Trade Balance US$ 450.10 bn

Forecast for 2014

Exports US$ 196.40 bn
Imports US$ 192.30 bn
Trade Balance US$ 4.10 bn

DRI Forecast for July 2014

MoM(%) 0.24
YoY(%) 3.75

End of period(% p.a) 7.50

Forecast for 2014

Inflation(%) 5.53
SBI(% p.a) 7.50