[Kabar-indonesia] Analysts remain upbeat on RI economy [+Permata, Telkom]

[Joyo at aol.com]

also: Permata, Telkom set to tap bond market

The Jakarta Post
November 15, 2006      

Analysts remain upbeat on RI economy

The Jakarta Post, Jakarta

Local and foreign analysts are upbeat that Indonesia will be
able to meet its economic growth target of 6.3 percent next
year despite an expected slowdown in world trade.

UBS Investment Bank Global Economics managing director Paul
Donovan said in Jakarta on Tuesday that Indonesia, as one of
the world's major commodities exporters, would benefit from
the expected increase in the international demand for
commodities, which would continue to increase despite the
projected decline in overall trade.

"The damage caused by the slowing down of U.S. consumer
spending will be limited in Indonesia," he said.

Donovan said that global trade and services would likely
decline next year, partly as a result of slower growth in
orders from the United States, which is facing an economic
slowdown.

He predicted that the slowdown in the U.S. economy would
result in a fall in U.S. domestic consumption growth to only
about 2 percent next year from about 4.5 percent this year.
This, according to Donovan, would result in a decline in the
average growth of Asian countries to 7 percent from about 8
percent this year.

"For Indonesia, however, we are more positive next year on
growth. We are looking to growth of 6.3 percent next year,"
he said.

In the second quarter of this year, Indonesian economic
growth reached 5.2 percent. The government has targeted 5.6
percent growth by the end of this year. For next year, the
government expects economic growth to reach 6.3 percent.

Donovan said that an expected further surge in demand from
China, the second largest economy in the world, would be
able offset weaker demand in the U.S.

"China's economic growth next year is important to Indonesia
because its imports of raw materials will continue to
increase," he said.

Separately, PermataBank commissioner Gunawan Geniusahardja
said that besides increasing Indonesian commodities exports,
a further drop in lending rates would also spur economic
growth.

"The signs of improvement in Indonesia's economy have been
evident since the second quarter of this year, since the
fall in Bank Indonesia's key rate and lending rates," he
said as quoted by Antara.
Bank Indonesia cut its key interest rate to 10.25 percent
last week, the sixth cut since May amid improvements in the
country's economic fundamentals, especially inflation. The
central bank's key rate reached as high as 12.75 percent in
January.

Meanwhile, the lending rate has declined to about 16 percent
from more than 18 percent earlier this year, but analysts
said it is still too high to boost investment.

Indonesian Chamber of Commerce and Industry (Kadin) chairman
Muhammad Hidayat has said that an ideal lending rate would
be about 12 percent.

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The Jakarta Post
November 15, 2006

Permata, Telkom set to tap bond market

The Jakarta Post, Jakarta

Permata Bank will offer a coupon up to 2.25 percentage
points, higher than that on similar government bonds for the
Rp 500 billion (US$54.8 million) worth of 10-year bonds that
it plans to offer next month.

Permata will pay investors annual interest of between 1.5
and 2.25 percentage points more than that on the
government's eight-year bonds maturing in 2011, which the
bank is using as a benchmark, it said in a statement.

The government bonds pay a fixed coupon of 12 percent.

Permata, Indonesia's eighth largest lender by assets, which
is majority owned by a consortium made up of the London-
based Standard Chartered Bank PLC and local automotive giant
PT Astra Internasional, held a public briefing on the bond
offering Tuesday.

The bond sale, Permata's first ever, is expected to run from
Dec. 7-11, with the bonds being tradeable on the Surabaya
Stock Exchange by Dec. 15.

The bank had previously planned to hold the sale in late
November. It has appointed Standard Chartered Securities
Indonesia to help sell the bonds.

Permata will be looking to build demand for the bonds on the
back of its satisfactory results for this year's third
quarter, while benefiting as well from the central bank's
recent rate cuts, from 12.75 percent at the beginning of the
year to 10.25 percent today, which makes debt cheaper.

The bank reported an unaudited net profit of Rp 223.4
billion in the first nine months ending Sept. 30, up 21.6
percent from the same period last year, and managed to
increase its lending by 3 percent to Rp 22.2 trillion,
despite the unfavorable macroeconomic situation for most of
the nine months.

Local rating agency Pefindo puts Permata at the investment-
level grade of "idA-".
Separately, state telco PT Telkom may sell bonds or seek
loans to help pay for Rp 1 trillion in debt maturing in the
middle of next year, its finance director Rinaldi Firmansyah
said.

"We will make a decision two months before the debt
matures," Firmansyah told a media briefing. Telkom would
also use its existing cash to repay the debt, he added.

Telkom, Indonesia's largest telco, should remain attractive
in the eyes of investors after reporting a 62 percent rise
in net profits to Rp 9.22 trillion up to the end of the
third quarter.

Telkom, through its Telkomsel subsidiary, currently controls
40 percent of Indonesia's third generation, high speed GSM-
based mobile phone market, and has a total of 1 million
subscribers, company president Arwin Rasyid said. It was now
targeting a 60 percent market share, he added, without
elaborating.

Firmansyah, meanwhile, said revenue from the company's CDMA-
based TelkomFlexi service may grow by up to 50 percent next
year, with Telkom planning to spend more than Rp 15 trillion
on network expansion next year.

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Joyo Indonesia News Service
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