Truba booked Rp180bn loss

Engineering firm PT Truba Alam Manunggal Engineering (TRUB) Tbk booked net loss of Rp180 billion last year against net profit of Rp212.7 billion in 2007 on huge forex translation losses. 

Truba finally released its 2008 financial year results with 95% surge in sales revenue to Rp2.95 trillion. With higher expenses, the company's operating profit slipped to Rp176 billion. But Truba booked Rp412.8 billion losses in foreign exchange translation. Combined with significantly higher interest expenses, the company then booked net loss of Rp180 billion last year.

Truba's stock price closed lower by 2.3% today to Rp170. The stock rocked bottom from Rp870 to Rp50 by mid of November 2008. For almost five months, the stock barely moved. But the stock surged significantly since mid of April 2009 to as high as Rp205 or 300% by mid of June. Who's cooking up the stock?

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Bank Century's assets slashed US$860 million

PT Bank Century (BCIC) Tbk reported total asset of Rp5.58 trillion as of December 2008, dropped Rp8.67 trillion from Rp14.26 trillion in Dec 2007 due to the fraud allegedly committed by the bank's former shareholders.

According to an audited financial report for 2008 by AAJ Associates, the bank's equity was minus Rp2.17 trillion and CAR of -35.92%. As of Dec 2008, the bank had accumulated losses of Rp8.9 trillion which caused equity deficiency of Rp1.5 trillion. LPS took over the bank in December 31, 2008 and already injected Rp6.13 trillion into the bank. Third party deposits in the bank halved to Rp5.099 trillion from Rp10.25 trillion. The shareholders allegedly embezzled depositors' money through various schemes. The bank reported operating profit of Rp56 billion last year, slashed from Rp515 billion in 2007, while net loss of Rp7.3 billion is a significant drop from Rp195 billion in 2007.

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Bakrie's "new" management

PT Bakrie & Brothers (BNBR) Tbk reshuffled its management. Former CEO Bobby Gafur Umar called in to replace Michael Lucente as CEO. 

Bobby was CEO of BNBR until last year when shareholders appointed Nalinkant Rathod as president director and Lucente, a former Merrill Lynch executive, as CEO. Bobby then appointed as vice president commissioner and President Director of PT Bakrie Indo Infrastructure. Lucente gets new job as Chief Investment Officer of BNBR.

The company also replaced Yuanita Rohali with former Merrill Lynch executive Eddy Soeparno as chief finance officer (CFO). BNBR also appoints Siddharta Moersjid as Chief Communication Officer and spokesperson, while Dody Taufik Wijaya is appointed chief of risk officer. Siddharta was Bakrie Group's spokesperson before he moved to Freeport Indonesia.

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IDX slips with commodities

IDX composite index closed lower by 0.34% today as coal and plantation stocks lost ground, surprisingly, when crude oil surged to above US$73 per barrel. 

Coal stocks closed lower led by Indika Energy's 2.11% drop, Adaro -1.64%, Bumi Resources -1.6%, Indo Tambangraya -1.2%, and Bukit Asam -0.43%. Their peers in the region closed mixed with Shenhua inched up 0.18%, BHP surged 2.4%, Rio Tinto +3.8%, while China Coal slips 1.2% and Straits Asia -0.6%.

Plantation stocks also closed mixed with Kulim, PPB, and IOI in higher grounds, while Astra Agro, Gozco, Sampoerna Agro, and Bakrie Sumatra lost ground. CPO futures contracts ease off to RM2226 per ton against RM2263 per ton yesterday in Malaysia Derivatives Exchange. 

Metals suffered significantly, led by Timah which dropped 6.9%, while Antam lost 1.2%. Financial stocks also closed lower, led by BRI which lost 4.6% and Mandiri by 1.6%. Bakrie-related stocks mainly lost ground, led by Bakrie & Brothers which dropped 4.3%.

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Iglas and Sandang had little choice than to liquidate

Government had little choice than to liquidate two state-owned companies PT Industri Sandang Nusantara (textile) and PT Industri Gelas (glass manufacturer) on years of losses.

SOEs minister Sofyan Djalil said both companies have no prospect to continue their operations, Kompas reported this morning. 

Government has 63.82% shares in Industri Gelas and 100% at PT Industri Sandang. Last year, Industri Gelas booked net loss of Rp81.3 billion, while Industri Sandang posted Rp71.9 billion losses. But government decided to help three troubled SOEs: PT Merpati Nusantara Airlines, PT PAL Indonesia (shipbuilding), and PT Djakarta Lloyd (shipping).

Industri Sandang operates nine factories, of which five has been closed down and leaving 2,000 workers without job. Four units remained in operation with about 4,300 workers. Government initially planned to inject Rp50 billion to revive the company, but failed. Last February, about 500 workers went on strike to demand explanation about the clarity of their status.

Meanwhile, PT Industri Gelas (Iglas) is one of the oldest bottle manufacturers in Indonesia with installed capacity of around 128,000 tons per year. The company once controlled 35% market share. 

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Krakatau Steel profits surged 46%

Against all odds, state-owned steel manufacturer PT Krakatau Steel reported net profit of Rp459.6 billion last year, jumped 46% from 2007 on stronger sales. 

Krakatau recorded net sales revenue of Rp20.6 trillion or about US$2 billion last year, increased 39% from the previous year. As cost of goods sold also surged 37%, the company reported gross profit of Rp2.7 trillion. Operating expenses also increased significantly last year, but Krakatau managed to record operating profit of Rp1.36 trillion, jumped 71% from the previous year.

Krakatau is the largest steel player in Indonesia with total asset of around US$1.5 billion. Government has repeatedly announced the plan to privatize this company, but delayed significantly due to various issues. Some wanted private placement, while others insisted on privatization through stock market. World's giant steel player Mittal has repeatedly launched initiatives to acquire significant portion of the shares.

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Indomobil profits Rp3bn only

PT Indomobil Sukses Internasional (IMAS) Tbk reported net profit of Rp3.3 billion in the first quarter 2009 on Rp1.6 trillion sales revenue.

Indomobil sales revenue declined slightly by 3% to Rp1.59 trillion, while its gross profit increased to Rp230 billion. The company managed to boost its operating profit by 22%, but higher financial expenses cost the company a lower net profit for the period.

Indomobil stock price surged from Rp530 early this month to close at Rp910 yesterday. At Rp910, Indomobil has market capitalization of US$90 million or about 17% from its total asset (US$527 million).

Indomobil has total liabilities of Rp4.8 trillion, or about 18 times its net equity of Rp271 billion. Long-term bank loans increased sharply to Rp1.36 trillion from Rp704 billion last year.

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Bankruptcy Filings on TPI & Kanasritex

Crown Capital Global Limited, BVI, has filed bankruptcy proceeding on PT Cipta Televisi Pendidikan Indonesia, a subsidiary of Media Nusantara Citra (MNCN), Bisnis Indonesia reported today. Kompas, meanwhile, reported 500 workers see their future uncertain after garment company PT Kanasritex filed bankruptcy protection.

Crown claimed US$53 million of liabilities due in December 2006. Another interesting factor to watch on Hary Tanoesoedibjo's Bhakti Group. Creditors filed lawsuit against Mobile-8 for the default of US$100 million bonds, while the Rp675 billion bondholders have just restructured the rupiah bonds.

Crown Capital filed the case to Central Jakarta commercial court. The first court hearing, according to Crown's lawyer Ibrahim Senen, is scheduled July 2nd. TPI reportedly hired Hotman Paris & Partners as its lawyer for the case. Asian Venture Finance Limited also claimed US$10.32 million in this case. 

In Semarang, Central Java, about 500 workers were anxiously waiting for the clarity of their compensations after Semarang district court declared Kanasritex' bankruptcy two weeks ago. 

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Sinar Mas injects Certis Cisco

PT Sinar Mas Multiartha (SMMA) Tbk, parent company of Bank Sinarmas, has injected Rp19.6 billion into the capital of PT Certis Cisco. 

Certis Cisco, formerly known as PT Cisco Mas Sekurititama, is a JV between SMMA and Certis Cisco Security Pte Ltd, Singapore's leading security organization. Established in 1997, PT Certis Cisco has operations in at least 10 major cities in Indonesia.

According to SMMA's financial report, SMMA controls 49% shares in PT Certis Cisco. SMMA's other subsidiaries are involved in insurance, trading, services, workshops, auction, information services, brokerage, futures trading, and shares administration services. 

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Medco acquires coal assets

PT Medco Energi Mining International (MEMI), a subsidiary of PT Medco Energi Internasional (MEDC) Tbk, has on June 26 signed a conditional sales and purchase and subrogation agreement (CSPA) with PT Medco Mining to acquire PT Duta Tambang Sumber Alam (DTSA) and PT Duta Tambang Rekayasa (DTR).

PT Medco Mining, parent company of DTSA and DTR, is controlled by the same shareholders of Encore International Ltd, which is the largest shareholder (50.71%) of MEDC. Total transaction value of US$886,013 has made the acquisition is considered non material.

No information provided on coal reserves acquired. But according to MEDC prospectus, the combined concession area is 6,200 Ha in Simenggaris, Nunukan, East Kalimantan with calorific value of 7000 Kcal/Kg. Medco expects a combined output of 500,000 tons per year from these concessions.

In 2007, Medco Mining once stated that it was seeking coal concessions in Lahat Regency, South Sumatra. Government also awarded a contract in Sekayu Block to develop coal-bed methane (CBM) to Medco last year.

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Metax establishes Indonesia subsidiary

Metax Engineering Corporation Limited, listed in SGX, has taken steps to incorporate a subsidiary in Indonesia, PT Bali Environmental Persada. 

PT Bali Environmental will have a paid-up capital of Rp1.82 billion, where Metax will control 60%, while the remaining equity interest of 40% will be held by PT Pulau Mas International, a company which is part of a conglomerate involved in the trading of various building products, civil construction, and property development.

The new subsidiary will conduct its business in import and trading of water treatment equipment, mechanical and engineering equipment, and spare parts such as water pump, water filter, and compressor, and business management consultancy.

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IDX softens on commodities

IDX composite index declined slightly by 0.32% on Monday, June 29, as plantation stocks retreated on lower CPO prices. Coal stocks closed mixed with Bukit Asam lost 1.7%, while Bumi Resources inched up 0.53%.

Commodities stocks in the region closed in negative territory as crude oil stays below US$70 per barrel. Shenhua gained almost 2%, but BHP lost 0.8%. Adaro lost 1.6%, but Indo Tambangraya gained 1.5%, while Xstrata opened lower in London. Most oil and gas stocks lost ground led by Medco (-1.6%), Energi Mega (-1.3%), and Elnusa (-1.5%). CNOOC also lost 2.3% in Hong Kong. Metal stocks also dropped led by Anglo American (-1.4%), Lonmin (-0.9%), and Chalco (-2.7%). Antam and INCO unchanged.

Plantation stocks also closed mixed with all Indonesian-listed plantation companies lost ground led by London Sumatra (-2.4%) and Astra Agro (-2.3%) to tracking the movement of CPO prices. The benchmark September contracts in Malaysia Derivatives Market closed significantly lower at RM2262 per ton, declined by about 2% from last week's closing at RM2317 per ton. (TH/YA)

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India Cement to acquire Indonesia coal mine

The Financial Express reported on Sunday that India Cements Ltd has decided to acquire a coal mine in Indonesia in the next few months.

"We're in advanced talks with a private coal mine player in Indonesia. We hope to finalize the deal in the next few months," The Financial Express quoted Srinivasan, vice chairman and managing director of India Cements Ltd.

In March, Binani Cement (India) also announced its plan to acquire coal blocks in Indonesia. Last year, Binani also announced a plan to acquire coal mines in Indonesia at a cost of US$50-60 million. The company spends around US$100 million per year on buying coal from international spot market where coal accounts 18-20% of its total costs.

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Serica expects Kambuna oil production soon

Serica Energy expects its Kambuna oilfield will commence production and generate significant revenue for the company.

Serica told investors last week that all major equipment necessary for production is on site in North Sumatra. Equipment, pipeline and control systems hook-up to continue into next month, which will be followed by commissioning and ramp-up production.

Serica sold 15% participating interest in Kambuna for US$52.7 million last year. Government also awarded East Seruway PSC last October for exploration of approximately 5800 Km2 with prospects similar to those in the Glagah-Kambuna TCA. The company also controls 54.6% participating interest in Kutai PSC. 

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Sound Oil & Bangkanai PSC

Sound Oil Plc told investors last week that none have yet committed financially to a farm-out arrangement on its Bangkanai PSC.

Sound Oil had indicated last year that the company would be reducing its exposure to the Bangkanai PSC, through a farm out or divestment. "As it turned out, the ensuing 12 months have been the most commercially difficult for many years with the falling oil prices, lack of debt funding and cutbacks in the budgets of many potential farminees and purchasers. Although many companies have technically attracted to Bangkanai, none have yet committed financially, although we are still in discussions to achieve this end," Sound Oil told investors in its annual report.

In the event that the obliged work program is not completed by the end of the year, the operator may advise relinquishment. In this case, Sound Oil estimates financial liability will be US$4 million.

Progress has been slower than expected at Bangkanai, caused by an extent, by the complexity of getting the Kerendan gas to market. The Kerendan gas field was granted a plan of development by Indonesian government in 2006. For development to commence, Sound Oil needs a favorable gas sales agreement with PT Perusahaan Listrik Negara (PLN). "These negotiations commenced in late 2008. Much depends on the investment schedule of PLN since they need to invest in an electricity transmission line from the new-build generating plant at Kerendan, to the grid connection point 180 Km away.

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SBY vs Kalla on Boediono

President candidate Jusuf Kalla disclosed yesterday of how he was so angry at Boediono (then coordinating minister for the economy) on government guarantee for 10,000 MW project. Incumbent president SBY called Kalla's statement unethical.

Well, this is not the first time president an vice president, who are competing in July 8 election, attacking each other. Few weeks ago, Kalla also disclosed in detail his role in the Aceh peace process. SBY's team also considered Kalla unethical.

"When suggestion from a minister disclosed to public, that's unethical, this is internal affair. One can't use that (internal) dynamic to say something bad," SBY said in a campaign in Balikpapan, East Kalimantan.

Interestingly, Kalla was also in Balikpapan, East Kalimantan on Saturday. "The peak of my anger on Boediono was when he declined to provide government guarantee for 10,000 MW project. Why I was so mad at him? Because, this is my opinion, that's how liberal thoughts at work (rejecting the guarantee)," Kalla said.

"I don't understand why we can provide 100% guarantee for banking investors, but we can't provide the same guarantee for a project for people who desperately need electricity," Kalla explained.

But Boediono defended his position saying "my main concern was to make sure the financing is accountable."

This is the second most significant attack from Kalla to SBY-Boediono camp after the Aceh issue. Talking about bad-mouthing each other, both teams scored quite equally, just before SBY and Kalla finally "divorced" after four years and four months of "marriage".

Tension between the two camps intensified over the alleged black campaign on Boediono's wife. Someone has been arrested from a Kalla-Wiranto campaign for distributing leaflet with an article published by Monitor Indonesia about Herawati, Boediono's wife. The article raised question about Herawati of being a Catholic.

According to Yuddy Crisnandy from Kalla-Wiranto team, based on police examination, the arrested guy, Adi Zein Ginting, admitted he is a supporter of SBY-Boediono and that he was ordered by Abdul Wahad Dalimunthe from SBY-Boediono team to distribute the leaflet contained an article published by Monitor Indonesia titled "Does PKS know that Boediono's wife is a Catholic?. SBY-Boediono team initially alleged Kalla-Wiranto of black campaign, while Kalla said that was a trap for his team. "This is clearly a trap for us," Kalla said today. 

Is Herawati a Catholic?

Boediono had actually said "We're born as Moslems, and keep implementing its values." Other than that, Herawati was seen praying with other Moslems at Darussalam Mosque in Yasmin, Bogor last week. Herawati is quoted by Demokrat Party's website that "Those who said I'm a Catholic are totally wrong." So, she is a Moslem. Djali Yusuf, a retired general who is also head of SBY-Boediono task force clarified the issue on Saturday saying, "Boediono's wife is a Moslem, no doubt about that."

The issue is a hot debate within Prosperous Justice Party (PKS). The party even plans to file lawsuit on the issue. 

PKS president Tifatul Sembiring said Herawati Boediono is a Moslem. "She even took lessons from PKS cadre at Rasamala Street, Jakarta. They were married under Islamic law and process," Sembiring testified.
Others discussed, "what's wrong if Boediono's wife is a Catholic?" in this link. Well, SBY's wife was also considered a Christian in 2004 election, but SBY won. 

Unfortunately for the country, whoever gets benefit from raising the issue, shall remember way too many issues out there need serious attention. The religious issue has consumed lots of our energy and leaving no room for serious talks on other issues. The issue is a clear evidence of how elites in the country are busy to defend or to get power in their hands and completely ignore what people actually need. We barely saw them discuss throughly of how they would trim the worsening inequality, degradation of mentality, and poor public service on education, health care, and infrastructure.

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Law Enforcement

There is a saying, "as important as the law itself is the law enforcement" or "no law without enforcement." We have to admit, after the downfall of Soeharto, new laws have been established to improve the quality of Indonesian democracy, especially to prevent excessive abuse of power. President Election Law No. 42/2008, for example, is a good one. But like other laws deliberated, the biggest concern is in its enforcement.

Abuse of power was the order of the day for almost 32 years under Soeharto regime. That's why we wanted the reform. Those days, bureaucracy and state-owned companies were merely vehicles to maintain political power. They were only assets for Soeharto and his cronies. They were not the State assets because the State had been taken over by Soeharto and his cronies.

Reform gives the country an opportunity to change such practices. We have amended the Constitution so someone could only be president for two periods or 10 years. We initially thought that the amendment would be enough to prevent someone from repeating Soeharto's style of power abuse.

New laws and regulations have also been deliberated. Government Regulation No. 45/2005 about SOEs, article 22 and 97 forbids board of directors, board of commissioners, and staffs of SOEs from being officers in political party. Law No. 10/2008 about Legislative Election has similar stipulation.

The biggest test is whether election-related institutions would enforce Law No. 42/2008 in relation to public scrutiny on some SOEs commissioners who are actively involved in political activism in favor of certain president candidate. General Election Commission (KPU) chairman Abdul Hafiz Anshary said two commissioners have been violating article 41 point 2d of the Law. It is a crime, he said. But you can't stop there. Someone has to prosecute the violations. We can't move on with the practices in the past where a crime has no criminal.

Article 216 of Law No. 42.2008 clearly states that violation of Article 41 point 2 is punishable for up to 12 months behind the bars and fines up to Rp60 million. Someone has to pay the price for his or her decision to commit such violation.

Election Supervisory Body (Bawaslu) listed 12 commissioners might be implicated in such violation, most of them are members of success team, political party, or organizations affiliated to SBY-Boediono camp. They are, among others, Sutanto (Pertamina/Pro-SBY Movement), Umar Said (Pertamina/Demokrat Party), Muhayat (Bank Mandiri/deputy minister for SOEs/Chairman of Barindo---supporter of SBY), and others.

SBY's credibility is tested in this issue, especially when government fired economist Rizal Ramli as president commissioner of state-owned cement manufacturer PT Semen Gresik (SMGR) Tbk last year due to his political activism.

Demokrat Party executive Anas Urbaningrum tried to clarify the issue arguing Sutanto is only listed as a "volunteer". Well, looks like Urbaningrum didn't read the election law carefully. 

Law No. 42/2008 about presidential election stipulates clearly in the Article 41 point 2.d. that campaign teams are not allowed to bring into the campaign activities all the officers of state-owned enterprises. Point 3 of the same article also forbids the SOEs officers become campaign team members. Article 44 of the Law No. 42 also forbids SOEs officers from conducting activities (meetings, suggestions, etc) that clearly support one of candidates. Violation to all of these articles are considered election crimes. SOEs minister Sofyan Djalil had actually issued a circular to implement these articles. 

Police neutrality is also tested in the examination of Bawaslu report about allegation of violation of the election law committed by SBY-Boediono team for early campaigning. 

Yesterday, Indonesian Corruption Watch (ICW) claimed that the organization discovered Rp7 billion suspicious funds for Kalla-Wiranto campaign team. "Kalla-Wiranto team claimed the funds were registered under the political party's name while our research shown the funds from individuals," Fahmi Badoh from ICW said.

Once again, General Election Commission (KPU) shall uphold the presidential election law to create a better democracy and put an end decades of "corruption" of State assets. What's the meaning of corruption eradication if the country is just too permissive on the violation committed by public officers?

Haryanto Suharman & Yosef Ardi

---Taken from Yosefardi.com----

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Pertamina's financial performance

Pertamina claimed its net profit for financial year 2008 surged 54.8% to Rp30.2 trillion or about US$3 billion on higher sales revenue (+44.5%). That's a significant improvement, even though the state-owned oil and gas company shall work harder to close the gap with Malaysia's Petronas which recorded US$19 billion net profit for FY 2008 alone. 

Pertamina reported net sales revenue of Rp554 trillion or about US$51 billion last year, increased 44.5% from 2007 (Rp383 trillion), mainly due to higher prices. Pertamina's crude oil output increased 4% to 54.5 million barrels or 149,000 bpd.

Meanwhile its refined products output increased 12% to 244.6 million barrels, but still far below its installed capacity of 365 million barrels. With such output, Pertamina, which operates seven oil refineries, reported utilization rate of 67% only. Last year's refining operation was even far below 2004 at 72%.

Pertamina has started to be more aggressive in its investment with the acquisition of Medco Energi shares in Tuban Block, East Java. The company invested Rp12.99 trillion last year for all divisions, a 100% growth from 2007. Pertamina is currently seeking opportunities to get participating interest in Mahakam Block currently controlled by Total and Madura Strait block controlled by Husky Oil Ltd. These blocks are in the process of extension of contracts. Government also evaluates four other blocks. They are Block A (Medco), West Madura Offshore (Kodeco), Bawean (Camar Resources), and South Central Sumatra (Medco).

Pertamina also acquired 10% participating interest in the Offshore Manta Gummy Project, Australia, from Anzon Australia Pty Ltd for cash consideration of US$31.5 million last month. 

Unfortunately, until now we have no idea about Pertamina's balance sheet. Finance Minister has issued decree No. 23/2008 to confirm assets worth Rp73 trillion or US$7 billion to be included in its balance sheet. The same year, finance minister also issued decree No.92/2008 stating that assets under PT Pertama EP, PT Badak NGL Co, and PT Arun NGL Co shall be considered government's asset managed by Pertamina.

Government has actually approved Pertamina's initial balance sheet for financial year 2007. Ernst & Young has been appointed as the first auditor. But until now, we haven't seen the report.

But early last year, Pertamina's CFO Frederick Siaahan said Pertamina's total asset was Rp152 trillion where Bontang and Arun LNG plants were not included. Equity was agreed at Rp83 trillion or US$8.3 billion. If those numbers can be used as the basic for financial calculation, Pertamina's ROA for 2008 is 19%, while ROE at 37%. Wow, even better than Telkom. But looks like the "real asset" is far above the agreed number. Some believe Pertamina's total asset is way above US$25 billion. 

Pertamina should be the biggest company listed at IDX. But to be there, there are lots of homework to be done immediately, especially identification and registration of assets. It is a public secret that some of Pertamina's assets, especially properties, have been illegally occupied, acquired, or transferred to certain individuals, group of people, or companies/institutions. One of the most famous is the Plumpang Fuel Depot where Pertamina initially controlled over 153 Ha of land, but the company now controls only 50%, while over 7,000 families have occupied the remaining area. 

Going forward, Pertamina budgeted up to Rp30 trillion or US$3 billion this year. The company has secured US$225 million loans from Japanese institutions for the expansion of Balongan refinery. Pertamina had also secured US$500 million soft loan from World Bank to finance geothermal projects starting next year. About 13 banks have also expressed their interest to finance Pertamina's projects worth US$650 million. Their combined stand-by loan commitment is about US$3 billion. Pertamina, reportedly, is working on bonds and loans package of US$1 billion. 

Still, financiers need better transparency from this company. The recent rumors about political pressures on the board of directors to provide logistic support for certain president candidate would make Pertamina in more difficult position to chasing the neighbor Petronas.

Taken from Yosefardi.com.

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Red notice for Djoko Tjandra

Attorney General's Office (AGO) gas finally named convicted businessman Djoko Tjandra as a fugitive after he failed to show up today for the scheduled execution of Supreme Court ruling which sentenced him two years behind the bars. 

Jasman Panjaitan, AGO's spokesperson, said the institution has asked National Police Headquarter to issue a red notice for help from Interpol network to bring him back to the country. Tjandra left the country on a chartered flight to Port Moresby, Papua New Guinea, only hours before Supreme Court announced the verdict.

Tjandra is sentenced two years behind the bars along with former central bank governor Sjahrir Sabirin for their role in the Bank Bali scandal. Sabirin has been jailed last week. Tjandra is also ordered to return the Rp546 billion funds deposited at Bank Permata to the State.

Tjandra's lawyer said the businessman stayed for three days in Moresby before flying out to Singapore. Tjandra, through his lawyer OC Kaligis, has asked one month delay for the execution saying "our client was shock with the verdict." Well, same old song!

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Coal spot prices down 2%

Energy, IT-Today: Thermal coal spot prices in Newcastle Port, Australia, a benchmark for Asian market, declined slightly by 2% to US$68.7 per ton for the week ended June 26 to tracking the crude oil.

NEWCIndex tracked by globalCOAL rallied to US$76.75 per ton in the week ended June 12 before retreated to US$70.8 per ton last week. Last week, South Korean utilities agreed 2009 thermal coal contracts with three Chinese producers at about US$78.5 per ton, down more than 45% from last year, but significantly higher than the utilities' demand of around US$60s.

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BCA and Bakrie end the rally

Indonesia Stock Exchange (IDX) composite index closed slightly lower by 0.2% today due to significant drop of BCA and Bakrie-related stocks. Other blue chip stocks mainly advanced to higher grounds.

BCA lost 7.19% on the news about placement of BCA stocks by Farallon at significant discount. Other bank stocks also declined, except CIMB Niaga and BRI. BCA was heavily traded with 60 million shares exchanged hands and closed at Rp3550.

Meanwhile, six out of seven Bakrie-related stocks closed significantly lower led by Bakrieland (-4.9%), Bakrie & Brothers (-3%), while Bakrie Telecom, Darma Henwa, and Energi Mega Persada slipped between 1-2.4%. Bakrie Sumatra Plantation unchanged.

Coal stocks were mainly in negative territory, while their peers in the region mainly closed higher, led by Shenhua's 6.5% gain, and China Coal's 4.9%. Xstrata, the world's largest thermal coal exported gained 2.4% by midday in London.

Astra gained 1.7%, but Astra Agro Lestari lost 1.7% and United Tractors -0.98%. Most plantation stocks ended higher in Singapore, Malaysia, and Indonesia even though the CPO futures contract in Malaysia Derivatives Market softened to RM2317 per ton for the benchmark September delivery.

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JAPFA & Multi Agro to merge

PT Japfa Comfeed Indonesia (JPFA) Tbk and PT Multi Agro Persada (FISH) Tbk has signed letter of intent on June 25 about merger plan between the two agriculture companies.

Japfa told Bapepam on Thursday that under the agreement, Japfa will be the surviving entity after the merger. Both companies have appointed PT Truscel Capital as independent valuer. According to the valuer, the fair price of Japfa is Rp605, while Multi Agro at Rp6596.

Japfa has total asset of Rp5.35 trillion, while Multi Agro at Rp345 billion. 

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BCA drops 6.5%

Stock price of Bank Central Asia (BCA) lost ground this morning with 6.54% drop on news about placement of shares by Farallon.

BCA was heavily traded with over 20 million shares exchanged hands in the first hour of trading. BCA has left its bottom at Rp2025 in October 2008 to reach Rp3500 in January 5th, 2009. But then the stock retreated to as low as Rp2300 in early March before regained grounds an touched new high at Rp3975 two weeks ago. Since then, BCA keeps falling to reach Rp3575 this morning.

BCA is one of the most profitable banks with combined net profit of Rp18.1 trillion or around US$1.8 billion in the last four years (2005-2008).

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PLN loss surged 24%

PT Perusahaan Listrik Negara (PLN) booked net loss of Rp1.66 trillion in the first quarter 2009, surged 24% from the same period last year due to 36% drop in government subsidies.

PLN, the state-owned electricity provider, reported 4% growth in electricity sales revenue to Rp20.9 trillion even though revenue from industries dropped 9%. Government subsidy declined 36% in the period to Rp9.5 trillion. Fuel cost actually slashed significantly by 28%, mainly due to lower fuel oil prices, while cost for coal skyrocketed by 102%. Other than that, cost of electricity purchase from IPPs also increased 29%. 

PLN reported operating profit of Rp1.3 trillion, but with interest expenses on loans at Rp1.47 trillion and loss in foreign exchange translation of Rp1.3 trillion, PLN then reported net loss of Rp1.2 trillion. But net loss for the computation of basic loss per share amounted to Rp1.66 trillion, increased 24% from Rp1.34 trillion in the same period last year.

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BUMI accepts lower price for Fajar Bumi

Coal mining giant PT Bumi Resources (BUMI) Tbk has finally accepted the revised valuation on PT Fajar Bumi Sakti but only for 50% ownership, not on 76.7% shares the company initially wanted to acquire.

BUMI said "after intensive and serious discussions with the previous controlling owner, an agreement has been reached to accept the revised valuation from MAPPI."

MAPPI is an independent valuator assigned by the Capital Market Supervisory Agency (Bapepam) to examine the fairness of the acquisition of shares in three companies, including Fajar Bumi, by Bumi Resources.

BUMI agreed to pay Rp2.475 trillion for 76.8% shares in Fajar Bumi Sakti (FBS) early this year. But according to MAPPI, the fair value shall be Rp2.105 trillion. So, if BUMI would only acquire 50% shares, the total consideration will be about Rp1.05 trillion.

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Wetar copper project updates

Finders Resources Limited, Australia, reported significant progress in the definitive feasibility study of the full scale development of the Wetar Copper Project in Indonesia. 

"Following four months of leaching and production from the large scale test heaps and 5 tonnes per day copper SXEW demonstration plant, Finders has now finalized design parameters for the full scale plant expansion to 20-25 thousand tons per annum," Finders said in a report to Australia Stock Exchange (ASX) on Thursday.

The definitive feasibility study is based on the Whim Creek SXEW plant that the company has an option to purchase from Straits Resources Limited for A$5 million.

Finders is the operator of the Wetar Copper project, and the Ojolali Gold-Silver project in Indonesia. A demonstration plant with 5 tons per day copper cathode capacity was commissioned in February 2009 and is permitted to process 100,000 tons of ore from the Kali Kuning deposit. The company is targeting up to 25,000 tons per year cathode by 2010, subject to final feasibility, permitting and project financing. 

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Creditors approved SAIP proposal

Paper manufacturer PT Surabaya Agung Industri Pulp & Kertas (SAIP) Tbk had received approval from its Tranche A creditors for the extension of interest and principal payments period due to financial crisis.

SAIP told Indonesia Stock Exchange (IDX) today that ZT Holding Pte Ltd and Orientalsky Corporation Pte Ltd had on June 18, 2009 given the approval letter, while Asia Capital Management Group gave similar approval letter on June 24. They represent 86% of Tranche A creditors. 

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Sci-Tech approves Martabe gold acquisition

Shareholders of China Sci-Tech Holdings Ltd have voted in favor of the acquisition of the Martabe gold project in North Sumatra, Indonesia, from Oz Minerals for US$211 million. 

In addition, Oz Minerals will be reimbursed by China Sci-Tech for an estimated expenditure of US$7.5 million spent on the project between April 1st and the completion date. China Sci-Tech will fund the purchase from cash on hand and completion of the transaction and transfer of cash consideration is expected early next week. 

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Pertamina got Offshore North West Java

State-owned oil and gas company PT Pertamina wins the competitive bidding to acquire 46% participating interest in the Offshore North West Java PSC from BP. 

The signing of SPA between BP and Pertamina is scheduled this afternoon in Jakarta. BP is the largest shareholder in the PSC, followed by CNOOC (36.72%), Inpex (7.25%), and Itochu Oil (2.58%). CNOOC was considered front runner in the auction.

ONWJ produces 24,000 bpd of oil and 220 mmscfd of gas. The block is key supplier for gas-fired power plants in Jakarta.

Pertamina agreed to pay US$280 million for 46% shares in ONWJ, the biggest upstream acquisition so far for Pertamina. Pertamina CEO Karen Agustiawan said the company will finance the acquisition from internal generated funds. "We have no plan to have other investors, we want to manage the 46% ourself," she said.

The ONWJ concession stretches from Cirebon in the east to the Seribu Islands in the west. The ONWJ facilities include 670 production wells, 170 platforms, over 40 processing and service facilities, along with approximately 1,600 km of sub-sea pipelines.

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Niko Resources plans in Indonesia

Niko Resources, a Canada-based company, plans to boost its oil and gas exploration activities in Indonesia. Niko has acquired several blocks in deepwater offshore in the country.
Niko told its shareholders on Tuesday that all blocks have sea bottom oil and gas seeps, large structural or stratigraphic features and several have direct indication of hydrocarbons on seismic.
Total capital expenditures for the year ended March 31, 2009 is US$15.7 million, while the forecast spending for FY ended March 2010 is about US$25 million.
The well commitment for each block will follow seismic interpretation. The seismic program planned for each block is outlined below.
Bone Bay: The seismic program planned for the block includes acquisition of 3,000 kilometres of 2D seismic.
Cendrawasih: The seismic program planned for the block includes acquisition 1,200 square-kilometres of 3D seismic, which will cover 24 percent of the 5,000 square kilometre block.
Kofiau: The seismic program planned for the block includes acquisition of 1,062 kilometres of 2D seismic and 3,150 square kilometres of 3D seismic, which will cover 60 percent of the 5,000 square kilometre block.
Kumawa: The seismic program planned for the block includes acquisition of 3,000 kilometres of 2D seismic.
Seram: The seismic program planned for the block includes acquisition of 3,500 kilometres of 2D seismic.
South Matindok: The seismic program planned for the block includes acquisition of 4,400 kilometres of 2D seismic.
Southeast Ganal: The seismic program planned for the block includes acquisition of 284 kilometres of 2D seismic and 2,700 square kilometres of 3D seismic, which will cover over 50 percent of the 5,000 square kilometre block.
West Sageri: The seismic program planned for the block includes acquisition of 371 kilometres of 2D seismic and 702 square kilometres of 3D seismic, which will cover 14 percent of the 5,000 square kilometre block.

Indonesia activities
In November 2008, the Company signed four PSCs for interests in four deep-water offshore exploration blocks covering almost 20,000 square kilometres. The Company will operate two of the blocks, South East Ganal and West Sageri, and will earn a 51 percent working interest. These blocks are located in the Makassar Strait. The Company will participate in the South Matindok and Seram blocks and earn a 25 percent working interest therein. The South Matindok block is located in northeast Sulewasi and the Seram block is located in north Seram.

Also in November 2008, the Company acquired the right to earn a 25 percent interest in another deep-water offshore exploration block, Bone Bay, covering almost 5,000 square kilometres. The Bone Bay block is located in southwest Sulewasi.

Each of the five Indonesian blocks is in the first exploration period, which expires in November 2011. The Company has minimum work commitments in this period to acquire and process 16,550 kilometres of 2D seismic in total for the five blocks and drill one well in each of the five blocks.

In May 2009, the Company and its partners were awarded three additional offshore exploration blocks: Kofiau, Kumawa and Cendrawasih. The Company will operate the Kofiau block, will earn a 67 percent working interest. This block is located in west Papua. In the Kumawa and Cendrawasih blocks, which will not be operated by the Company, the Company will earn a 25 percent working interest. These blocks are located in southwest and northwest Papua, respectively. Each of these three Indonesian blocks is in the first exploration period, which expires in May 2012 and the Company has minimum work commitments for the acquisition of 4,042 kilometres of 2D seismic, 1,200 square kilometres of 3D seismic, drilling one well per block and various payments under the agreements.

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First Drop from Tangguh LNG

After four months of delay, Tangguh LNG plant is expected to produce its first drop on June 28, next week. But it is not clear when will be the first shipment from the plant to China's facility in Fujian. 

Evita Herawati Legowo, director general for oil and gas at energy and mineral resources ministry, said that first drop is expected June 28. Energy minister Purnomo Yusgiantoro said last month that the first shipment will be July 1st. As production starts in Tangguh, Bontang LNG plant might has to cut its operating rate because buyers---Japan, Taiwan, and South Korea---have cancelled the purchase of 18 cargoes this year.

Fujian LNG terminal, operated by CNOOC---which is also a partner in Tangguh LNG plant, entered full operation late last month. The terminal will receive 15 LNG cargo shipments from Indonesia within one year. Unter the long-term contract, Fujian LNG terminal will receive 2.6 million tons of LNG yearly from the BP-led Tangguh LNG plant.

CNOOC has begun the building of two additional storage tanks at its second terminal this year after local government decided to double Fujian LNG terminal's capacity. Construction of these new tanks, 160,000 m3 each, is scheduled to be completed in 2011. 

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BTPN seeks IFC loan

Bank Tabungan Pensiunan Nasional (BTPN) has applied for US$70 million loan from International Finance Corporation (IFC), investment arm of World Bank, to finance the expansion of micro-banking business and strengthen its funding base. 

According to the project summary provided by IFC, the proposed project will likely consist of IFC loan financings in USD or IDR to Bank BTPN, with the stipulation that BTPN does not take any foreign exchange risk.

BTPN is headquartered in Bandung, West Java, Indonesia and has over 500 outlets located throughout Indonesia. Over 400 outlets are dedicated to the pension business and over 100 are dedicated to the micro banking business. BTPN plans to open more micro banking branches throughout Indonesia in 2009.

Project sponsors are: 

TPG Nusantara: TPG Nusantara is a consortium comprised of Texas Pacific Group (“TPG”), Northstar Pacific (“Northstar”), The Government of Singapore Investment Company (“GIC”) and Noonday Asset Management (“Noonday”). The consortium owns 71.61% of bank Bank BTPN.

TPG: TPG is a leading global private investment firm with over $50 billion of capital under its management. 

Northstar: Northstar, the local affiliate of TPG, was founded in 2003 by Patrick Walujo and Glenn Sugito as a Jakarta-based merchant bank engaged in principal investment as well as corporate finance advisory.

GIC: In addition to ownership of BTPN through the TPG Nusantara consortium, GIC directly owns an additional 5% of BTPN. GIC is a global investment management company established in 1981 to manage Singapore's foreign reserves. With a network of eight offices in key financial capitals around the world and above US$100 billion under its management, GIC invests internationally in equities, fixed income, foreign exchange, commodities, money markets, alternative investments, real estate and private equity.

Noonday Asset Management: Noonday manages discretionary capital for institutional investors and high net worth individuals through its relationship with Farallon Capital Management. 

All remaining shares are publicly owned.

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SBY proposes Sri Mulyani as central bank governor

President SBY told Tempo this afternoon that he will propose finance minister Sri Mulyani Indrawati as one of the candidates to replace Boediono as governor of Bank Indonesia.

"There might be two candidates. One of them is my finance minister, Mdm Sri Mulyani," SBY said. The President declined to mention the other candidate. "Not now, it's confidential still. I haven't met DPR. But the capability of the alternative candidate would be equal to Sri Mulyani," SBY said.

The next question, of course, who will replace Sri Mulyani Indrawati as finance minister if she is confirmed by DPR as the new central bank governor.

Boediono resigned last month after SBY chose him as VP candidate in the July 8 presidential race. Some considered Sri Mulyani is the right choice to replace Boediono, but as tax director general Darmin Nasution has also been elected senior deputy governor of Bank Indonesia, others raised concern about the finance ministry.

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Daya Sakti stops operation

PT Daya Sakti Unggul Corporindo (DSUC) Tbk terminates all operational activities of its wood processing plants in Banjarmasin, South Kalimantan province. The company will also fire all its workers there. 

DSUC said it maintains the operation of plants in Java and has no plan to shut them down. But the closure of Banjarmasin units will cost the company a 90% drop in sales revenue. DSUC said the average price of its products reached its lowest level in years at US$480 per m3 (C&F) this year and sees no sign of improvement. "Meanwhile raw material prices have increased significantly, especially since the start of Q2 2009," DSUC said.

DSUC controls PT Trikorindotama Wana Karya, which operates the facilities in Banjarmasin. Early this month, workers filed a report to local legislative council (DPRD). Workers claimed that TWK forced them to resign with compensation well below the standard.

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Stocks rebound, speculations return

IDX composite index increased 4.25% to 1995 today led by rebound in commodities stocks. Coal stocks jumped even though crude oil was traded below US$69 per barrel in Asia. Indika surged 17.28%, BUMI +11.45%, and Adaro +9.3%. 

Speculative stocks like Darma Henwa and Truba Alam Manunggal also jumped 14.13% and 15.9%. Other coal stocks like Bayan, Indo Tambangraya, and Bukit Asam rebounded by 7%, 3.8%, and 4.4% respectively, while their peers in the region reported lower gains. China Coal and Shenhua only increased by 3% in Hong Kong, while Straits Asia gained 2% in Singapore. World's giant BHP even lost 0.21%. Energi Mega Persada (ENRG) was also traded heavily and surged 22.2%, while companies with better fundamentals like Medco and PGN only gained 7% each.

Plantation stocks also ended significantly higher, led by Bakrie Sumatra Plantation's 9.4% gain, while Astra Agro only increased 1.7% and London Sumatra +5.5%. Investors responded positively significant rebound of CPO futures contracts in Malaysia Derivatives Exchange on Tuesday, while today the prices retreated.

Metals stocks Aneka Tambang, INCO, and Timah regained grounds with 10.8%, 11.2%, and 9.8% respectively.

Banking stocks also closed significantly higher, led by BRI (+7%), Danamon (+8.8%), and BNI (+5%). 

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Cilacap Refinery maintenance

Pertamina will shutdown one platformer unit with 18,000 bpd of gasoline output in August for two weeks of regular maintenance. Cilacap Refinery is the largest in Indonesia with installed capacity of 350,000 bpd. Gasoline and kerosene make up around 60% of its output.

Cilacap refinery was forced to shutdown early this month due to pipe leakages in a crude distillation unit which led to a fire at the CDU's stake furnace. 

Cilacap has two CDU units of 118,000 bpd and 230,000 bpd respectively plus two platformer units to process naphtha into high octane gasoline. Pertamina and Mitsui signed a JV to build a residue fluid catalytic cracking (RFCC), to be on stream in 2013 with US$1.5 billion investment. The unit will produce gasoline with a capacity of around 60,000 bpd. But the status of this project is unclear especially after Pertamina, reportedly, asked for higher stake in the JV (from the initial 20%).

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Ito Warsito named new IDX CEO

Ito Warsito, investment banker at state-owned Bahana Securities, has been elected as the new CEO of Indonesia Stock Exchange (IDX) replacing Erry Firmansyah, Detik.com reported.

Ito won the race over I Made Rugeh Ramia, CEO of Panin Sekuritas. Ito won 79 votes, while Rugeh only 36. Other members of the board of directors are: Wan Wei Yiong (trading and membership director), Frederica Widyasari Dewi (business development), Uriep Budhi Prasetyo (regulation and supervision, former director of PT Dhanawibawa Artha Cemerlang), Eddy Sugito (company assessment), Adikin Basirun (IT, former CEO of PT Pacific Dua Ribu Investindo), and Supandi (human resources).

Who is Ito? He graduated with MBA from Harvard Business School in 1994. He earned bachelor degree in accounting from State Accounting College (STAN) and joined Danareksa Sekuritas, state-owned investment bank, in 1994. He was investment banking director at the company before jumped ship to Bahana in 2001. 

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Buanatata keeps selling Catur Sentosa

PT Buanatata Adisentosa, controlling shareholder of construction material retailer PT Catur Sentosa Adiprana (CSAP), sold another 100 million shares on Monday, June 22 to repay debts. 

Buanatata sold 100 million shares for Rp130/share. As a result, the company's ownership in CSAP---popular with Mitra 10 outlets, declined to 28.51%. Buanatata also sold 100 million shares in June 19, 147 million shares in June 18, and 153 million shares in June 17. 

So, in one week, the company's ownership declined 500 million shares. Total proceeds so far is Rp65 billion, all of them to service its debts. Buanatata controlled 45.78% shares of CSAP as of May 31, 2009. The second largest shareholder is PT Ekasentosa Jayasukses. Unfortunately, no information provided on the buyer of the 500 million shares, which represents voting rights of 17%.

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Robust extends gold zone on Romang Island

Robust Resources Limited told Australia Stock Exchange (ASX) today that it has received results for a further two diamond holes (LWD 23 and LWD 24) drilled in the highly prospective Lakuwahi caldera prospect on Romang Island, Indonesia.

Robust said Hole LWD 24 intersected a 20m gold zone from 20.75m down hole. The zone has a gold grade of 1.02g/t plus a coincident silver grade of 99.2g/t. Robust has now completed 969.5m of diamond drilling on the large caldera-hosted Lakuwahi Gold-Silver base metal prospect on Romang Island, and is on track to complete its 2,500 meter program by this month.

"The latest results confirm the large precious and base metal resource potential indicated from earlier drilling and from precious drilling by BHP Billiton between 1997-1999. Eighty percent of the holes drilled by Billiton and Robust contain significant gold, silver, zinc, lead, and copper mineralisation," Robust said.

Romang Island is located north east of Timor Island. Robust Resources, through its Indonesian joint venture partners PT Gemala Borneo Utama (PT GBU), holds mining authorities covering 250 square kilometres, including all of Romang Island. Romang Island is strongly mineralised and prospective for several styles of mineralisation in two main areas to the north and south.

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PGN pays dividend 157% of profit

Shareholders meeting of PT Perusahaan Gas Negara (PGAS) Tbk, the state-owned gas distribution and transmission company, finally approved dividend payment of Rp1 trillion, 57% higher than its 2008 net profit of Rp634 billion. 

So, how would PGN finance the dividend payment? Well, according to the meeting, Rp374 billion will be taken from retained earnings. Actually PGN reported stronger operational performance last year with operating profit of Rp4.66 trillion, surged 51% from 2007. Unfortunately, the company reported Rp2.5 trillion loss in foreign exchange translation. As a result, the company booked profit before tax of Rp1.28 trillion, dropped one third from Rp1.87 trillion in 2007. So, even with lower tax expenses at Rp476 billion, the company's net profit slashed 45% to Rp634 billion.

PGN actually had cash in hands of Rp3.5 trillion, almost tripled from December 2007, and increased further to Rp5.4 trillion as of March 31, 2009. PGN also reported net profit of Rp1.2 trillion in Q1 2009, jumped 113% from Q1 2008.

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Bakrie lost ground

Bakrie-related stocks led the downfall of IDX composite index today. Bumi Resources lost 10.3%, while Energi Mega crashed 15.8% and Dharma Henwa slashed 12.38%.

Bakrie Telecom, Bakrieland, Bakrie & Brothers, and Bakrie Sumatra Plantations declined 10.3%, 9.3%, 5.6%, and 5.9% respectively.

For sure, Bakrie is not alone. In the coal sector, Adaro also lost 8.5%, Indika slashed 12.9%, Indo Tambangraya -8%, Bayan -8.3%, and Bukit Asam -5.5%. Their peers in the region also lost ground. Shenhua lost 3.6%, China Coal -5.2%, and BHP declined 4.1%. Even Xstrata which opened higher in London quickly turned to negative territory.

Back to the Bakries, some of the stocks have surged outrageously in the past few months. Darma Henwa (DEWA), for example, jumped 345% in the period of April-May. Energi Mega Persada (ENRG) skyrocketed 592% in the same period. Fundamental performance of both companies are far from convincing. 

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IDX falls, commodities weigh

IDX composite index opened significantly lower this morning due to bearish sentiment on commodities and global factors. IDX lost 2.6% in five minutes of the pre-market trading to tracking the downfall of most markets in the region and Wall Street.

In just 10 minutes, IDX composite index lost as much as 3.5% as Nikkei and Hang Seng dropped over 3%.

Plantation stocks were mainly in correction mode in both Malaysia and Singapore. Wilmar, the giant commodity player, lost 3.2%, while Indoagri dropped 4.1% in Singapore, as CPO futures pointed to new low. Astra Agro opened lower by 7.5%, while Bakrie Sumatra lost 8.8% and London Sumatra slashed 8.7%.

Energy stocks were mainly in negative territory. Shenhua and China Coal lost 4% and 6% in Hong Kong this morning, while BHP already dropped 4% in Australia. Straits Asia, with most coal operations in Indonesia, declined 3.5% in Singapore. Indika and Indo Tambangraya also opened lower by 5% and 6% respectively in Jakarta, while Bukit Asam lost 3.7% and Bumi Resources slashed 6%. Oil and gas giants, CNOOC and Petrochina lost 4% in Hong Kong. Elnusa and Medco dropped 6% and 5% respectively in Jakarta. Bakrie-controlled Energi Mega Persada slashed further by 11%.

Aneka Tambang, INCO, and Timah slashed by 6%, 5%, and 8% respectively to tracking the fall of metal stocks worldwide.

Even banking stocks were opened significantly lower, led by BRI (-3.5%), Mandiri (-3.9%), Danamon (-4%).

Well, the correction is considered fair especially because IDX composite index has rallied for over three months from 1264 in early March to 2108 in June 10 or a 67% gain.

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PSP secured loan for Aceh gold

Prosperity Resources Limited, a company listed in Australia Stock Exchange, has executed a second loan agreement with China-based Resource Global Finance (RGF) Ltd to finance exploration work for Pinang-Pinang gold and copper project in Aceh.

The agreement allows Prosperity Resources to draw down US$500,000 at nil interest until June 30, 2010 where RGF will have a second ranking fixed charge over the company's interest in the cooperation agreement with PT Dana Mitra Utama for this loan.

Pinang-Pinang is a concession over 2,000 Ha in southern part of Aceh province controlled by PT Multi Mineral Utama.

Prosperity is focusing on metal projects in Indonesia, mainly gold, silver, copper, and nickel. The company is also seeking opportunities in iron ore and manganese.

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Pressure on commodities continues

Nikkei 225 opened significantly lower this morning by 1.9%, while South Korea's KOSPI lost 1.8% and Australia's All Ordinaries dropped 2.6% to tracking the downfall of Wall Street and most European markets on Monday. Toronto, heavy with commodities, also crashed 4.4%. 

Pressures on energy stocks continued this morning with the fall of BHP in Australia by 4%, Rio Tinto -4.42%, Gloucester -3.6%, Macarthur -5.7%, and Straits Resources Ltd -6.84%. Metal stocks Fox Resources, Mincor, and Minara also lost over 4% in Australia.

Indonesia, also heavy with mining and energy stocks, might follow suit. Negative sentiment from the fall of CPO prices will add pressures. CPO futures contracts in Malaysia Derivatives Exchange slashed significantly by 5% to RM2158 per ton or 23% drop in three weeks.

CPO prices might drop further today. Bids for September 2009 delivery has touched RM2058 per ton this morning. 

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Energy & Metals drag down Wall Street & Footsie

Footsie dropped 2.57% on Monday due to the fall of energy and metal-related stocks. Other than Anglo American which gained almost 5%, other mining stocks ended significantly lower. Lonmin slashed 8.25%, Rio Tinto lost almost 4%, and Xstrata tumbled 6.8%. 

BP down 3.92%, while Total SA lost 3.59% as crude oil prices weigh down most energy stocks. Dow Jones Industrial Average (DJIA) lost as much as 2% by midday in New York and settled even lower by 2.35%. Alcoa dropped 8.91%, ConocoPhillips crashed 5.9%, Chevron -3.3%, and ExxonMobil -3.1%. Crude oil was traded down 4% to US$66.8 per barrel in New York on concerns about the economy and a strengthened US dollar. 

Freeport McMoRan tumbled 11.29% as copper prices hit its new low, while Teck Resources lost 11.9% and Newmont -4.8%. US coal giants like Arch Coal, Peabody Energy, and Consol Energy dropped 10.89%, 9.8%, and 10.34% respectively.

A broad sell-off hits bank stocks where Bank of America dropped 9.7%, while Citicorp declined 5.36%. JP Morgan, Morgan Stanley, UBS, and Goldman Sachs were all in correction mode.

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Telekom Malaysia acquires VADS Indonesia

Telekom Malaysia Berhad, through its wholly owned subsidiary VADS Berhad, has received notifications from its legal advisors that Indonesian ministry of Law and Human Rights had approved the establishment of PT VADS Indonesia.

PT VADS was established to undertake the expansion of VADS Group’s BPO business to Indonesia. PT VADS is presently managing the contract awarded by PT Excelcomindo Pratama Tbk for the outsourcing of XL’s contact centre at an estimated contract value of RM104 million.

Oakwell Engineering

Meanwhile Oakwell Engineering Ltd told SGX today that its subsidiary, M&I Electric Far East Pte Ltd, has set up an associated company PT M&I Electric Indonesia. M&I will hold a 45% interest in the new company, while the remaining shares will be controlled by PT Krisna Dwi Mitra (45%) and Mr Tan Sai Chiong (10%). 

The new company will carry out the activities of engineering, design, procurement, project management, and other consulting services in relation to the design, building, and management of switchgear, MCC, and related products. 

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IDX turns red

IDX composite index slips in the afternoon session led by the fall of mining, plantation, and banking stocks. IDX closed lower by 0.78%. Astra International's 3.85% gain can't help the index from falling almost one percent as other blue chip stocks lost ground. 

Coal stocks mainly in negative territory with Bukit Asam lost 6.84%, while Bumi Resources declined 4.64%. Adaro, Indika, and Indo Tambangraya dropped 4.84%, 7%, and 5.21% respectively.

Xstrata, world's largest thermal coal exporter, opened significantly lower in London as investors were not sure about its maneuver to merge with Anglo American. Anglo, meanwhile, opened significantly higher by 7.83%.

Timah and Antam also dropped by 5.88% and 1.5% respectively, pretty much in line with other metal stocks.

Plantation stocks also continued the correction mode after CPO futures contracts in Malaysia Derivatives Exchange were traded below RM2200 per ton this morning. Contracts for September delivery crashed by 4% to RM2196 per ton in the afternoon session.

Bakrie Sumatra Plantation (UNSP) lost 5.56%, while Tunas Baru Lampung declined 4.76% and Sampoerna Agro -2.4%. 

Bakrie stocks mainly dropped, led by Bakrie & Brothers (-7.22%), UNSP and Bakrieland (-5.26%). Energi Mega Persada also lost 3.8% respectively.

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Indah Kiat booked losses

PT Indah Kiat Pulp & Paper (INKP) Tbk reported operating loss of US$48 million in the first quarter 2009 on poor margin. 

INKP reported net sales revenue of US$375.9 million, dropped 38% from the same period last year. Meanwhile its cost of goods sold declined only slightly to US$380 million, resulting in gross loss of US$4 million against gross profit of US$197.7 million in Q1 2008.

As operating expenses declined only slightly, INKP reported operating loss of US$48.3 million in Q1 2009 against operating profit of US$149 million in the same period last year. 

Indah Kiat reported net loss of US$3.1 million only in the first quarter, thanks to gain on foreign exchange translation of US$44.9 million.

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Wayang Windu II enters the grid

Star Energy commences the operation of second geothermal power plant unit of Wayang Windu with power generating capacity of 117 MW. 

Energy minister Purnomo Yusgiantoro officially commenced the operation of Wayang Windu II in Pandeglang, Bandung, West Java this morning. The plant is build with US$210 million investment. The first unit, 110 MW, had entered Java Bali power grid since 2000. 

Star Energy, through its subsidiary Magma Nusantara Limited, secured energy sales contract for 30 years from PLN to supply up to 400 MW. Sumitomo Corp, Rekayasa Industri, and Fuji Electric are members of the EPC contractor. Star Energy is controlled by tycoon Prajogo Pangestu in partnership with Ashmore, a UK-based hedge fund.

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SBY's approval rating drops further

A new survey released by Puskaptis shown SBY-Boediono's approval rating declined from 57.39% to 52.15%, while Kalla-Wiranto increased to 17.2% and Megawati-Prabowo slipped to 22%. 

Well, despite questions about impartiality of the surveys, the Puskaptis survey is an alarming sign for SBY-Boediono, especially because other surveys allegedly sponsored by the pair's consultant shown overwhelming support of 70%.

Commenting on Puskaptis survey, Anas Urbaningrum, executive of Demokrat party, said the results are not surprising at all. The party believes SBY-Boediono could win the election.

Political observer Muhlizar told Kompas.com that with the result, two-round of election is wide open. 

Seven pollsters have earlier released their respective surveys on July 8 presidential race. Lembaga Survei Indonesia (LSI) had SBY's approval rating at 70%, but Lingkaran Survei Indonesia (LSI) found lower at 62%, further discounted by LP3ES at 59%, and then today Sugeng Sarjadi Syndicate (SSS) claimed 52.5% for SBY, Mega-Prabowo 24.4%, and Kalla-Wiranto 20.2%. 

Lembaga Survei Nasional (LSN)'s first survey shown SBY's electability at 67.1%, but in the second survey declined to 62.5%. Meanwhile, Reform Institute found SBY's electability at 62.92%. But LRI, a pollster affiliated to Kalla-Wiranto, has a significantly lower rating for SBY at below 40%. SO, most of the surveys shown overwhelming support for SBY and that the incumbent might win in one round race. But SSS & LRI predicted two round of election. Gotta be careful in reading the surveys, especially after LSI publicly admitted its survey was paid by Fox Indonesia, consultant for SBY-Boediono. 

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Santos' another LNG maneuver

Australian-listed Santos, with significant oil and gas operations in Indonesia, announced today that Papua New Guinea (PNG) LNG project participants have reached alignment on the commercial terms with three major LNG buyers in the Asian region for sales of approximately 4.3 million tons per annum. Another threat for Indonesian LNG.

Santos said a fourth LNG buyer is awaiting government approval of key commercial terms for the remaining 2 million tons per annum of production capacity.

PNG LNG project is a neighbor for Indonesia's Tangguh project in West Papua. The project will develop resources in the Hides, Angore, and Juha fields and the associated resources in Kutubu, Agogo, Gobe and Moran, PNG. The gas will be transpored by pipeline to an LNG facility 20-km northwest of Port Moresby on the coast of the Gulf of Papua. The gas will be liquefied, enabling export by ship of approximately 6.3 million tons per annum of LNG.

The project is operated by ExxonMobil and is currently in the front end engineering and design (FEED) stage. FEED is expected to conclude with a final investment decision in the fourth quarter of 2009. Santos has a 17.7% interest in FEED phase of the PNG LNG the project, while others are ExxonMobil (41.5%), Oil Search (34%), Nippon Oil Exploration (5.4%), MRDC ( a PNG company representing landowner interests) with 1.2%, and Eda Oil 0.2%.

ExxonMobil Gas and Power Marketing Company said in a press release this morning that it expects to commence the delivery of LNG by late 2013 or early 2014. 

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OZ expects US$211 M from Martabe

OZ Minerals expects to complete the sale of its Martabe project in North Sumatra, Indonesia by the end of this month and receive settlement proceeds of US$211 million. 

China's Minmetals Non-Ferrous Metals Co had paid a final amount of US$1.35 billion for the assets, excluding the Martabe project. Oxiana Ltd acquired Martabe gold project in 2007 through its purchase of Australian-listed Agincourt Resources Ltd via a US$388 million scrip offer. The project will produce 200,000 ounces of gold and 2 million ounces of silver and it expected to cost US$310 million to develop.

Agincourt in cooperation with Dharmawangsa Group acquired 90% shares in Martabe project from Newmont Mining Corporation for US$76.5 million in 2006. 

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CPO hits a new low

The benchmark September 2009 CPO futures contracts in Malaysia Derivatives Exchange opened lower at RM2245 per ton this morning. It closed at RM2285 per ton last week. 

Palm oil stocks also opened lower in Malaysia and Singapore, led by Kulim which dropped 4% and Sime Darby -2%, while Kencana Agri lost 1.82% in Singapore. Meanwhile, Astra Agro Lestari (AALI) opened lower in Jakarta this morning.

Meanwhile, CPO prices in the physical auction organized by KPB PTPN (joint marketing office of state-owned plantations) for domestic market ended lower in the range of Rp6955-7189 per Kg on Friday.

Seven out of 12 packages auctioned withdrawn on low bids. The lowest bid was Rp6270 per Kg for West Kalimantan port.

CPO is mainly tracking the movement of crude oil which retreats to below US$69 per barrel in Asian market on Monday. 

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Angky Camaro passed away

Commissioner of PT HM Sampoerna (HMSP) Tbk and director of Salim Group, Angky Camaro, passed away from kidney problem, Detik.com reported. 

Born in Bogor, West Java, in 1949, Camaro graduated as aeronautical engineer from Technische Fachhochscule, Hamburg. Camaro started his career in Volkswagen AG's plant in Wolfsburg, Germany. 

He joined Indomobil, a company controlled by Salim Group, in 1982. He is listed as commissioner at the company. He was appointed managing director for HM Sampoerna in 2002. Last year, Indofood appointed Camaro as director.

He got a kidney transplant last year. Born from a Chinese family, Camaro can't speak Mandarin. 

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Xstrata & Anglo American merger

Xstrata Plc, the world's largest thermal coal exporter, confirmed Anglo American's announcement today that Xstrata has sent a written proposal to the board of Anglo American seeking their consideration of a merger of equals of the two mining giants. 

Xstrata believes a merger of these two world-class companies with complementary assets is highly compelling. The combination would create a premier portfolio of operations diversified across multiple commodities and geographies, with enhanced scale and financial flexibility to fund future growth. Xstrata has already quantified substantial operational synergies from the combination that are not available to either company operating alone.

"There is, however, no assurance that any transaction will be forthcoming from Xstrata’s proposal," the company said in a statement sent to Yosefardi.com on Sunday, June 21

The merger, if approved, would create a combined market capitalization of US$68 billion. Xstrata and Anglo American have their shares slashed 10.4% and 6.1% respectively last week. They gained 6.41% and 4.37% respectively this year, underperformed to bigger mining stocks like BHP (+17%) or Rio Tinto (+37%).

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Gudang Garam & new management

With the acquisition of Bentoel by Britih American Tobacco (BAT), the rumor about Gudang Garam as acquisition target might disappear for a while. Other than that, the second largest cigarette producer is regrouped after Rachman Halim passed away. Shareholders meeting in Kediri, East Java, on Saturday decided to name Juni Setiawati Wonowidjojo, sister of the late Rachman Halim, as the new president commissioner. Interestingly, four independent commissioners have been appointed. They are Yudiono Muktiwidjojo, Frank Willem van Gelder, Hadi Soetirto, and Lucas Mulia Suhardja. Suhardja is the new name in the board of commissioners.

Susilo Wonowidjojo, Halim's younger brother who is also founder and owner of Makin Group plantation giant, is appointed chief executive officer (CEO) with six directors. They are Heru Budiman, Edijanto, Buntoro Turutan, Fajar Sumero, Herry Susianto, and Buana Susilo.

Susilo replaced Djajusman Surjowijono who resigned in February 2009. Susilo was vice president director. There were speculations about internal frictions about the future of Gudang Garam, especially since Susilo invested significantly in Makin Group.

Gudang Garam booked net profit of Rp1.88 trillion last year, increased 30% from the previous year on stronger sales revenue (+20.44%) at Rp30.25 trillion or about US$3 billion. The company reported net profit of Rp780 billion in the first quarter 2009, surged 132% from Q1 2008 on improved operating margin. Gudang Garam's operating profit jumped from Rp614 billion to Rp1.19 trillion in Q1 2009. The company has market capitalization of US$2.3 billion as of June 19, 2009, tripled from less than US$700 million in October 2008. The share price has surged from Rp3500 in late October 2008 to Rp12,300 last Friday.

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Jalan Tengah Economy

Middle Path sometimes is considered equivocal, undecided, in doubt or deliberately deceptive. But Middle Path is also considered the wisdom of Confucius. As Mencius so aptly says, "Confucius did not go to the extremes." Anthony Giddens calls it "third way". In Indonesia, president candidate SBY calls it jalan tengah to counter the attacks of neoliberalism label classified by Giddens as "second way". 

According to Giddens, there is a First Way of "old-style social democracy" which had excessive faith in the State, and the Second Way is neoliberalism or the New Right, which puts too much trust in the market. The Third Way lies between the Old Left and the New Right. (Brian Roper, Socialist Review, 2003)

President candidate SBY describes Indonesia's economy is currently subscribing to the so-called jalan tengah or middle way. "We're not subscribing to neoliberalism, nor communism, but middle way that pro-people," SBY said in his first campaign speech.

SBY said there are several pillars to support the Middle Path Economy in order to secure the equality and justice for all people. One of the pillars, he said, is the prevention of corruption, collusion, and nepotism due to conflict of interests between public officers and their own business. (Look who's talking! Where was this guy in the past five years?)

He further said..."I don't believe in development theory that give priority to high economic growth and through market mechanism would create equality. The trickle down effect theory has proven to be ineffective."

Neoliberalism, SBY said, promotes privatization, cutting down subsidies, promote trade liberalization, and give wider role to international financial and multinational institutions. (Wonder whether privatization of education in the past few years is not part of the neoliberalism route.)

He reiterated his 2004 campaign theme..pro-poor, pro-job, and pro-growth. Unfortunately, no details provided of how the pro-poor, pro-job, and pro-growth promises would be delivered through policies. But SBY did mention about programs like direct cash assistance, people's business credit (kredit usaha rakyat), PNPM Mandiri, rice for the poor, free education for the poor, free medical treatment for the poor, and other assistances.

US president Barrack Obama is being labelled with New Socialism for his programs. Strong government intervention in solving the financial crisis, boost in healthcare program, broad expansion of the welfare state, green energy, green jobs, and the rich-will-pay the stimulus program, cost Obama the label. (Jim Gilmore, Obama's New Socialism, April 29, 2009)

Frankly, ordinary people don't understand about the terms, old-socialism, new-right, neoliberalism, socialism, etc. And of the most important, they don't really care about such terms. They care more on how they could get jobs, get better pay, lower costs of living, affordable education and medical services. Unemployment rate is still high, while number of people living below absolute poverty is increasing. Meanwhile social-economic gap between the rich and the poor, between urban and rural areas, between Java and outside Java, between west and eastern part, between ethnic groups, between religions (freedom), between criminals and victims, between taxpayers and public officers, etc. 

Reinterpreted: Middle Path means:

1) Don't want privatization for state-owned enterprises, except for public schools, water supply, public transportation, hospitals, etc.

2) Trade liberalization, selected, but subject to who select the products to be or not to be liberalized.

3) No to too strong government intervention, except to bailout Lapindo mudflow. 

4) No conflict of interest between public officers and business, except if they're big contributors or close friend/allies.

5) No to strong role of international financial institutions, except those linked to our party or group.

6) Maintain direct cash assistance, because it's important to ease the pain even though it will not cure the illness.

7) Government wants to eradicate corruption, but not collusion and nepotism, and not if the implicated ones are our friends.

8) Government wants to trimming down inequality, but doesn't want to raise tax for the haves nor supporting significant increase in salaries.

9) Government wants to promote democracy, but please don't criticize government, our party, and our cronies.

This is an archive of Yosefardi.com

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SBY releases new song

Pop singer Joy Tobing performed President SBY's new song titled "Is there" during a campaign in Rumbai, Pekanbaru, Riau province on Saturday, Kompas.com reported. Other artist, Rio Febrian performed SBY-written song "I believe will be there". Comments?

"The title is perfectly match...because I believe you'll be there, and by then (September 2009, after the second round of election---if any) Pak SBY will have a new profession, a composer...Looks like you're more serious in composing songs than take care the country, look at the Lapindo mudflow victims..." one reader of the report commented.

"I think better be a celebrity Pak SBY. Let the country managed by more serious people: Prabowo," another commentator said. (Well, looks like this guy is Prabowo supporter).

"Dear Pak SBY, it is better to reduce this kind of shows, because it will only reduce your electability. President is not an artist. Your supporters will leave you if you keep on campaigning your own image," said the other critic.

Well, SBY released three albums in the past five years in office, a world record for a president. The latest was released early this year, while the first in 2006 titled Rinduku Padamu (Miss of You) and the second in 2007 titled Majulah Negeriku.

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Samuel detained, The Joker?

Corruption Eradication Commission (KPK) has detained corruption suspect Hengky Samuel Daud, director of PT Istana Sarana Raya, charged with corruption in the government-funded fire trucks procurement. How about Joko Tjandra, the Joker? 

Well, the Joker is reportedly in Papua New Guinea for business and personal affairs. Tjandra, sentenced two years behind the bars for his role in the Bank Bali scandal, fled the country on a chartered flight two days before the verdict announced by Supreme Court. That has triggered speculation that the verdict had been leaked to the Joker so he could fly out of the country. Immigration Office rejected to be blamed for Joker's overseas travel because they had only received the travel ban two days later. TOO LATE, TOO LATE...As usual, pretty much like our firefighters.

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CPO drops further

CPO futures contracts for September delivery in Malaysia Derivatives Exchange settled down at RM2285 per ton after hitting a low of RM2274 on Friday, the lowest level seen in almost three months. 

The 0.61% decline on Friday is softer than the previous day's 3.8% fall on worries about the prospect of demand in two biggest consuming countries, China and India.

Meanwhile, physical auction of CPO for domestic market in Indonesia closed in the range of Rp7114-7318 per Kg on Thursday with nine of 12 packages (12,000 tons) auctioned by KPB PTPN (joint marketing office of state-owned plantations) withdrawn on low bids (below Rp7000/Kg).

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Coal spot prices drop 8%

Thermal coal spot prices in Newcastle Port, a key benchmark for Asian market, dropped 7% for the week ended June 19 to tracking the softening crude oil prices. 

According to thermal coal spot prices tracked by Globalcoal.com, NEWC Index dropped to US$70.8 per ton, the first correction after five weeks of rally to US$76.75 per ton as of June 12. In the meantime, thermal coal spot prices quoted in Richard Bay Port, South Africa, a key benchmark for South Asia and Western Europe, dropped 8% this week. ARA Index, a key benchmark in Europe, also lost 8%.

GlobalCoal was founded by leading members of the world coal industry. It develops the world's leading electronic marketplace for thermal coal. Indonesia's second largest coal producer PT Adaro Indonesia, joined GlobalCoal online trading platform two months ago.

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Marcel Tjia, new CEO for Interra

Interra Resources Ltd has appointed Marcel Han Liong Tjia, cousin of the controlling shareholder Edwin Soeryadjaya, as new chief executive officer (CEO) as of June 20. 
Interra has oil and gas operations in Indonesia (Tanjung Miring Timur field), Myanmar (Chauk and Yenangyaung fields), and Thailand (L3/48, L9/48, and L17/48 blocks).

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