[Kabar-indonesia] 16 Biz/Econ Reports: BCA buy back; Astra; VAT; Bonds swap; Cement; Rice

[Joyo at aol.com]

16 articles compiled and selected by Joyo Indonesia 
News Service:

- Indonesia's BCA buys back 1.025 mln
  shares at 4,200 rupiah each

- Indonesia Ag Commodities VAT To Be
  Removed In 2-3 Months

- Indonesia to swap rupiah govt bonds on
  Tuesday

- Bank Indonesia: USD Likely Below
  IDR9,000 By End '06

- Stock watch - Indonesia's Bank Permata up
  on talk of impending govt stake sale

- Stock alert - Indonesia's Astra Intl down on
  extended correction

- Indonesia's Astra CMG logs net profit of
  US $3.9 mln for Jan-July

- Indonesia July cement sales flat at
  1.79 mln tonnes

- Indonesia's Bakrie Telecom spends 60 pct of
  IPO proceeds for network expansion

- Indonesia's APAC Citra may shut its
  garment plant

- Indonesia need not to hesitate to
  import rice: Expert

- Indonesia must improve to face
  ASEAN market in 2015: Economist

- Indonesian auto parts reacy to compete in
  ASEAN by 2015: Ass'n

- Indonesian road show in Middle East to
  seek new investment

- Indonesia set to hold foreign investment
  forums in UAE

- Indonesian govt asked to use e-payment system

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Indonesia's BCA buys back 1.025 mln shares at 4,200
rupiah each

JAKARTA, August 25 (XFN-ASIA) - PT Bank Central Asia
(BCA) said it bought back 1.025 mln shares from the
public at a price of 4,200 rupiah per share.

At midday, BCA shares were up 50 rupiah at 4,450.

The purchases were carried out on August 15, the
company said in a statement to the Jakarta Stock
Exchange.

It added that as of now, it has bought back 28.66 mln
shares, out of a total of 586.5 mln allowed under a
buyback program endorsed by the capital market
regulator.

The program began at the end of September last year
with the company setting aside a maximum of 2.1 trln
rupiah to buyback up to 5 pct of its issued capital.
The program is set to last 18 months.

BCA's finance director Jahja Setiaadmadja said the
company eventually intends to sell the shares again at
a higher price in several years time.

As of end December 2005, US-based Farindo Investment
(Mauritius) owned a 51.18 pct stake in BCA, totaling
6.306 bln shares. The public owned 46.64 pct, or 5.74
bln shares, with the rest spread among individual
shareholders including BCA's founder, Anthony Salim,
with a 1.77 pct stake.

------------------------------------------------------

Indonesia Ag Commodities VAT To Be Removed In 2-3
Months

JAKARTA, August 25 (Dow Jones)--Indonesia will remove
a 10% value-added tax on primary commodities,
including cocoa and palm oil, by November, a
government official said Friday.

"I estimate that (the tax removal process) can be
finished this year," Darmin Nasution, the Finance
Ministry's Director General of Taxes, told reporters,
adding that the tax will likely be removed within the
next two-to-three months. [ 25-08-06 0410GMT ]

The Indonesian government said last year that it would
scrap the VAT - imposed on domestic sales of primary
agricultural products since 2000 - by Jan. 1, 2006.

But the decision had been continually delayed as the
government was writing a list of which commodities to
exempt from the tax.

Among other commodities, the 10% VAT applies to sales
of cocoa to local grinders, causing producers to
increasingly look to direct exports of unrefined
product to avoid the tax.

The Indonesian Cocoa Association, or Askindo,
estimates that the lack of supply has hamstrung the
local cocoa processing industry to around 50% of its
operating capacity.

The proposed tax lift could channel as much as 50,000
metric tons a year of unrefined product back into the
local industry, Askindo said earlier.

Those producers that had sold product to local
grinders will likely see a bottom-line boost from the
tax removal, as officials including Trade Minister
Mari Pangestu have said the removal will be backdated
to January this year. This would allow growers to
recoup taxes paid in the ensuing period.

Indonesia, the world's third-largest cocoa producer,
exported 368,678 tons of cocoa beans in 2005, a 33%
increase from 2004, while the value of exported cocoa
beans rose 6.5% to $468.28 million.

However, industry officials previously said heavy
rains at the start of the year could cut output from
the main growing region of Sulawesi island by 10% this
year from around 200,000 tons in 2005.

-------------------------------------------------------

Indonesia to swap rupiah govt bonds on Tuesday

JAKARTA, August 25 (Reuters) - Indonesia will offer
holders of short-term rupiah-denominated government
bonds the chance to switch to 12-year debt on Tuesday
next week, part of efforts to smooth out repayment
schedules, the finance ministry said.

The finance ministry's head of the debt management
unit, Rahmat Waluyanto, told reporters investors will
be able to switch government bonds maturing between
2007-2009 into 12-year debt FR0038 <IDGBFR0038=SU>
through an auction.

"Interest rates are expected to fall further. I think
demand would be pretty good," said a debt market
analyst Budi Susanto of Danareksa Sekuritas.

Indonesia's last debt swap early in August resulted in
the government swapping 4.4 trillion rupiah ($481.6
million) in bonds maturing 2007-2009 for 15-year debt
FR0034 <IDGBFR0034=SU>, out of 5.9 trillion worth of
bids.

The government has recently stepped up its efforts to
further ease the cost of servicing its debt burden,
which is expected to peak in the next three years,
partly by taking advantage of strong foreign demand
for the bonds.

Foreign investors bought a substantial amount of
Indonesian government bonds this year, attracted by
one of Asia's highest bond yields and the prospect of
lower domestic interest rates.

The central bank has said it may cut the benchmark
one-month interest rate <BIPG> to around 11.0 percent
by the year end from 11.75 percent due to an expected
easing in inflation as the impact of a big Oct. 1 fuel
price hike fades.

Rating agencies, however, still rate Indonesian bonds
below investment grade, or junk status. Standard and
Poor's ratings Services, for example, rates long-term
Indonesian local currency government bonds "BB+" - one
notch below investment grade. (Additional reporting by
Muhamad Ari and Johannes Mantiri)

------------------------------------------------------------

Bank Indonesia: USD Likely Below IDR9,000 By End '06

JAKARTA, August 25 (Dow Jones)--The U.S. dollar may
drop below IDR9,000 by the end of 2006, Bank
Indonesia's deputy governor said Friday.

"I believe there is room in that direction, as our
exports have been good enough, and we hope to control
inflation," Aslim Tadjuddin told reporters.

Tadjuddin said inflation would likely remain in check
throughout August. While he didn't specify a
projection for inflation figure, he indicated it would
likely be near July's level.

"Last month, inflation was 0.45% (on month), and
hopefully we can control inflation this month also,"
he said.

--------------------------------------------------------------

Stockwatch - Indonesia's Bank Permata up on talk of
impending govt stake sale

JAKARTA, August 25 (XFN-ASIA) - PT Bank Permata shares
rose on speculation that the government soon plans to
sell its remaining stake in the bank, dealers said.

At 11:20 am, Bank Permata was up 10 rupiah at 740, off
an early high of 760, on 3.31 mln shares.

The composite index was down 11.666 points at
1,417.818.

"There is speculation that the planned sale will be
done in early September," a dealer with a state
brokerage.

He said investors are upbeat about the plan as it may
allow the majority shareholder, a consortium of
Standard Chartered Bank and PT Astra International, to
buy more Permata shares

The government, through its asset management firm PT
Perusahaan Pengelola Aset (PPA), still holds a 26.16
pct stake, while Standard Chartered Bank and Astra
each hold 31.55 pct stakes.

PPA spokesman Reni Rorong told XFN Asia that a forum
will be held later today at which the agency will
disclose to investors the remaining assets that it is
managing. However he said the forum would not discuss
details of specific planned asset sales, including the
Bank Permata stake.

--------------------------------------------------------------

Stock alert - Indonesia's Astra Intl down on extended
correction

JAKARTA, August 25 (XFN-ASIA) - Car dealer PT Astra
International was lower on a technical correction
after recent gains, dealers said.

Astra was down 350 rupiah or 3.07 pct at 11,050.

"It is a healthy correction. I think people can start
accumulating the stock now as the stock price might
have touched its support level," an institutional
dealer with Mandiri Securities.

He noted that in the coming months with interest rates
trending lower, business prospects for Astra were
likely to improve.

Near term support for the stock is at 11,000 rupiah
with resistance at 12, 000, he said.

---------------------------------------------------------------

Indonesia's Astra CMG logs net profit of US $3.9 mln
for Jan-July

JAKARTA, August 25 (Asia Pulse/Antara) - PT Astra CMG
Life reported Rp264 billion (US$29.3 million) in
premium income with net profit at Rp35 billion
(US$3.86 million) in the first seven months of this
year.

Its finance director Herawati Prasetyo described the
company's performance as improving this year.

The life insurance company jointly owned by the Astra
Group (JSX:ASGR) and Commonwealth Bank (ASX:CBA)
reported income amounting to Rp436.85 billion last
year, up from Rp386 billion in the previous year.

This year the company expects to chalk up a further
increase in income to Rp600 billion.

-----------------------------------------------------------------

Indonesia July cement sales flat at 1.79 mln tonnes

JAKARTA, August 25 (Reuters) - Indonesia's domestic
cement sales in July were relatively flat at 2.79
million tonnes compared to a year ago, the country's
top cement maker, PT Semen Gresik Tbk , said on
Friday.

Indonesia's cement sales have been declining this year
as the economy has slowed following a government
decision to sharply hike domestic fuel prices last
October to scale back its crippling subsidy bill.

Sales in the main Indonesian island of Java declined
by 3.5 percent to 1.74 million tonnes, while Gresik's
domestic sales fell 4 percent to 1.22 million tonnes,
the company said on its Web site.

July's sales took Indonesia's total cement sales this
year to 17.34 million tonnes, nearly 3 percent lower
than the same period last year, while Gresik's year to
date sales climbed 2.2 percent to 8.13 million tonnes.

Some industry experts expect the industry to have
lower to flat growth in sales volumes this year,
compared with last year's 31.51 million tonnes.

Cement consumption expanded 4.9 percent last year,
lower than analysts' forecast of 7-8 percent, as the
government's much anticipated infrastructure projects
failed to go ahead.

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Indonesia's Bakrie Telecom spends 60 pct of IPO
proceeds for network expansion

JAKARTA, August 25 (XFN-ASIA) - PT Bakrie Telecom said
60 pct of the proceeds from its end-January IPO,
totaling 578 bln rupiah, have gone into expanding its
network capacity.

'This (spending on capacity expansion) has been
reflected in the increasing number of our mobile
network subscribers from 486,604 at end 2005 to 1.06
mln as of end June 2006,' director Rakhmat Junaidi
told the Jakarta Stock Exchange in a statement.

He said the company plans to spend up to 90 pct of the
IPO proceeds on network expansion with the remaining
10 pct to be used to strengthen its capital structure.

-------------------------------------------------------

Indonesia's APAC Citra may shut its garment plant

JAKARTA, August 25 (Asia Pulse/Antara) - Poor
performing textile and garment maker PT Apac Citra
Centertex (ACC) (JSX:MYTX) says it may shut down
operations at its garment factory and sell its
machinery.

Funds from the sale could be used to invest in other
profitable companies, said Benny Soetrisno, president
of PT Apac Inti Corpora, a subsidiary of ACC.

ACC's production of garments dived 97 per cent to
1,516 pieces in the first half of this year from
43,953 pieces in the same period last year.

Its sales, however, rose 49 per cent to 51,869 pieces
as the company unloaded stock from the previous year.

Soetrisno said while considering closing down the
garment factory, the company, which has 13,181
workers, will continue its revitalization program by
replacing its old machines.

--------------------------------------------------------

Indonesia need not to hesitate to import rice: Expert

JAKARTA, August 25 (Asia Pulse/Antara) - Importing
rice is not something taboo for Indonesia, depending
on its needs and the situation which requires rice
import, a senior agricultural observer said here on
Thursday.

"There is no need to be hesitant to import rice as
long as it is done for national stock and food
resilience," Imam Hurmen, a former member of House
Commission in charge of agricultural and forestry
affairs, said.

He said there was no problem for the government to
import rice provided that it had made various efforts
such as procurement of local rice.

But he reminded that rice and fertilizer should not be
made a commercial commodity, and rice should be
imported only based on the need at home.

Agriculture Minister Anton Apriantono said earlier
that the government had not decided whether it would
import rice or not although national stock was
depleting.

The minister said the government would only decide the
rate of rice selling price which would be made by the
governor of each province.

The National Logistics Board (Bulog) has also said
that it did not need to launch market operations
because the hike of rice price was still within the
reasonable level below 25 percent of the basic
purchasing price.

Bulog President Director Widjanarko Puspojo said rice
stock in its warehouses at present was only about 532
thousand tons, or below the secured level of one
million tons.

He admitted that Bulog's efforts to increase national
stock were hampered because of the increase in the
rice price at home.

Imam Churmen said if the government decided to import
rice it had to assign experienced companies to carry
it out like Bulog.

Referring to the problem of fertilizer and seeds,
Churmen called on the government to provided
fertilizers and seeds for farmers whose regions were
affected by natural disasters.

The procurement of seeds and fertilizers for farmers
in disaster-affected areas was vitally important for
supporting agricultural development, he said.

---------------------------------------------------------

Indonesia must improve to face ASEAN market in 2015:
Economist

JAKARTA, August 25 (Asia Pulse/Antara) - Indonesia
should improve its infrastructure ahead of the
creation of the single ASEAN market in 2015 in order
to affect the flow of goods to the country and attract
investment, economic observer of the Civil
Professional Society Group (MPM) Poltak Hotradero said
in Jakarta on Thursday.

"The gates leading to many airports and seaports, for
example, are in a very bad condition and are too
narrow. Many foreign investors cancel their business
plans after observing the poor condition of port
infrastructure," he said.

"Indonesia must also prepare infrastructure for the
processing of its natural resources, especially in its
mining and agricultural sectors".

"So far, Indonesia's processing of natural resources,
such as gold and tin minings, has depended on foreign
countries. We should be independent if we want to
compete," Hotradero added.

He also advised that the country improve its quality
of human resources to compete with labour markets of
Singapore, Malaysia and Thailand.

Hotradero said that Indonesia was ready for the
establishment of a single ASEAN market in 2015,
asserting that the country has the assets it needs
like mineral resources and plantations, to be
competitive.

ASEAN's economic growth rate of 6-7 per cent per annum
constituted a promising growth for world trade
development, Hotradero said.

"The annual economic growth of the advanced states
such as the United States, Japan and European nations,
reached only 1-2 per cent.

Therefore, they are competing to expand their
businesses to the ASEAN region which they consider a
market with a strong potential," he added.

In order to face its main competitors, Malaysia,
Singapore and Thailand, Indonesia should map out an
appropriate market system, said Hotradero.

"So far, Indonesia has yet to be able to market its
automotive products to Singapore and Brunei
Darussalam, for example, because these two nations had
not yet needed them".

----------------------------------------------------------

Indonesian auto parts reacy to compete in ASEAN by
2015: Ass'n

JAKARTA, August 24 (Asia Pulse/Antara) - Indonesia's
automotive component industry is expected to be ready
to compete in the Asean Free Trade market which is to
be implemented not in 2020 as scheduled before but
five years earlier in 2015, an association's chairman
said here on Thursday.

The general chairman of the Association of Car and
Motorcycle Equipment Industries, Hadi Suryadipraja,
said he believed the country's automotive component
industry would be better in 2015 than now.

He said the industry was at present not yet ready to
compete in the Asean Free Trade market.

He also hoped human resources of the industry would
also be better later when the free trade market was
implemented.

He said the industry would be ready for the market in
2015 if demand for cars and motorcycles in the country
increased. He said however that car sales this year
had dropped by 50 percent from last year while
motorcycle sales by 25 percent.

He hoped the industry could make some improvements in
the years ahead of the free trade market. He motorcyle
production in the country was the third highest in the
world after China and India, and therefore had the
potential to become the highest.

He said he believed if automotive production was high
the industry would quickly improve and be able to
compete as the scale of economy would be met and
productivity would also increase.

He said at present the performance of the national
automotive component industry comprising 350 companies
had yet to be good because conditions were still not
favorable as import duties on raw materials and
fishined or assembled products had yet to be
harmonized.

"Unless this condition is corrected, the country's
automotive component industry would not be able to
compete", he said.

----------------------------------------------------------

Indonesian road show in Middle East to seek new
investment

JAKARTA, August 25 (Asia Pulse/Antara) - Indonesia
will conduct a roadshow in the Middle East next month
in an effort to lure investment from the countries in
the region, a government official said here on
Thursday.

"Before the fasting month a delegation will leave for
Kuwait, Qatar and Saudi Arabia," special staff of the
state minister for state firms, Aries Mufti, said.

He said the delegation would be a follow up to
President Susilo Bambang Yudhoyono's recent visit to
those countries.

"The Qatar Trust Fund and Kuwait Investment Agency
among others have already expressed their commitment
to provide Indonesia with funding," he said.

"We hope that initially in 2006 - 2007 we could obtain
up to US$1 billion," he said.

He said the amount was still a small compared to the
total fund provided by countries in the region for
development projects in some developing countries.

He said the countries in the region practically had
unlimited amount of funds following recent oil price
hikes.

"Out of US$223 billion provided by the countries in
the region only US$12 billion had entered Indonesia
but only around US$200 billion of it had been used,"
he said.

He said the opportunity to get the funds was wide
open. "They have even encouraged Indonesia to make use
of the funds for infrastructure development and
electricity projects," he said.

He said the delegation would also follow up on the
result of talks of some Indonesian companies that had
won projects in the three countries.

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Indonesia set to hold foreign investment forums in UAE

DUBAI, August 25 (Asia Pulse) - Indonesia is planning
a series of investment road shows in the UAE and other
Gulf countries, according to Indonesian Minister for
State Enterprises Sugiharto.

The Minister was quoted as saying in the local press
that there had been a lot of interest from Middle
Eastern funds about investing in Indonesia, especially
in the banking sector.

"Investors from the UAE's Qatar have expressed
interest in our banking sector. We will bring a road
show there, or hold an investor forum on how we can
take advantage of this," Sugiharto told the Bangkok
Post.

This was a follow-up to Indonesian President Susilo
Bambang Yudhoyono's visit to the region earlier this
year. The government has appointed former Indonesian
Foreign Minister Alwi Shihab as a special envoy to the
region.

Sugiharto said the government was also prepared to
provide the sort of incentives that investors from the
Middle East had been asking for.

"Requests such as the government contributing between
15 and 30 per cent of the total cost of an investment
project might be acceptable - many state firms can
still afford to participate in such projects," he
said.

The Minister for State Enterprises stressed, however,
that the government would have to reject certain other
demands, such as special fiscal incentives.

"We will explain to them that we cannot discriminate
between investors from the Middle East and those from
other regions," he said. "We hope that their requests
will be more straightforward as we are all working to
make Indonesia a more investor-friendly place."

During his recent visit to the Middle East, Yudhoyono
had placed high hopes on two-way investment in the oil
and gas, power generation and infrastructure sectors.
Investors in Saudi Arabia, Kuwait, the UAE, Qatar and
Jordan have shown keen interest in investing in
Indonesia's banking sector.

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The Jakarta Post 
Friday, August 25, 2006

Govt asked to use e-payment system

The Jakarta Post, Jakarta

The use of an electronic payment system will not only help promote 
transparency and efficiency but could also help fight fraud or other forms of illegal 
payment, especially in the procurement of goods and services.

Director for the government and public sector of Visa International Asia 
Pacific, Dennis NG, told a seminar Thursday that the use of the electronic payment 
system in the government's procurement activities could help save a lot in 
state funds.

Besides helping to reduce transaction costs, the electronic payment system, 
he added, could prevent government officers from marking up payments because it 
did not use documents such as receipts.

"Normally, the government uses cash in making purchases. For verification, 
government officers usually use receipts that in some cases could be 
counterfeited," he said.

With the electronic system, he said, payment would be made with cards and the 
payment receipts would be verified by the transaction statements issued by 
card-issuers, making it difficult for card users to cheat the system.

"In addition to promoting transparency and efficiency, the use of cards can 
also help cut transaction costs as there is no cost charged by the card issuers 
for the card usage," he said. "With the use of such as card, the holder can 
also receive special discounts from suppliers," he added.

For instance, he said, the British government was able to save US$100 million 
annually after adopting the system. The U.S. government also saved $1.4 
billion of the 2004 national budget thanks to the use of the electronic payment 
system, he said.

Currently, he said, the system is used in government offices in a number of 
other countries such as Australia, Singapore, Brazil, Thailand and Germany.

"The Thai government implemented its government services card in February 
2006 and as of today, 80 agencies out of 217 have already signed up with the 
program," he said.

Visa International Asia Pacific country manager Ellyana C. Fuad said that she 
had talked with some government institutions in Indonesia about the program.

"They will study the program and hopefully they will join us soon," she said.

She added that if there were state institutions interested in joining the 
program, then Visa would cooperate with banks to issue such cards.

Currently, there are seven banks in Indonesia that issue Visa Debit cards 
including Bank Permata, Bank Lippo, Bank Niaga, Bank Buana, Bank Bukopin, Bank 
Mega and Bank Mandiri.

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Joyo Indonesia News Service
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