Lapindo mudflow, what's up?

National media reported that three SBY-Boediono cabinet members visited the area flooded with Lapindo mudflow in Sidoarjo, East Java on Saturday. They "inaugurated" the piling of a fly over for Porong-Sidarjo toll road. The fly over shall be built because the mudflow cut the route seriously, especially in KM 35. This is one of the costs incurred by the mudflow the State generously pays.

The visiting ministers are Djoko Kirmanto (public works), Gusti Muhammad Hatta (environment), and Fadel Muhammad (fishery). People in East Java have suffered for almost five years due to this mudflow. The cost of the mudflow has been ballooned. Why?

President SBY issued Regulation No. 40/2009 in September 23, 2009 which basically lifted the financial burden off Bakrie's shoulders. The new regulation changed some articles of President Regulation No. 14/2007 about the Sidoarjo mudflow. One of the key articles abolished is Article 15 point 5 where PT Lapindo Brantas, controlled by Bakrie Family, initially bear the cost of handling the mudflow.

Under the new regulation, all the related costs of the mudflow will be sourced from the State budget. Lapindo's obligation is limited to the purchase of land and buildings of the victims pursuant to the new map. Lapindo shall pay 20% upfront, while the balance shall be paid one month before the 2-year house rent expired.

But according to the new regulation, the 20% shall be paid in 2008, 30% in 2009, and the balance will be paid gradually. The State Budget had allocated Rp600 billion in 2007, Rp1.57 trillion in 2008, and Rp1.15 trillion in 2009 for rehabilitation of public infrastructures affected by the mudflow.

The President Regulation No. 14/2007 was actually designed as "burden-sharing scheme" between the State and the Bakrie Group.

SBY initially issued Decree No. 13/2006 about the establishment of national team for the mudflow, supervised by energy minister (Purnomo Yusgiantoro), public works minister, fishery, and environmental affairs plus East Java governor, Brawijaya regional military commander, and East Java regional police chief.

The cost was initially a full responsibility of Lapindo. But President Regulation NO. 14/ 2007 lifted substantially some of the financial burdens from Bakrie's shoulders, especially rehabilitation of public infrastructures and operational costs for the national team (article 14).

So, the mudflow-related costs lifted from Bakrie's shoulders are: Rp2.11 trillion to move the railway line, turnpike, build new highway, and gas pipeline, plus Rp612 billion for construction of a canal to channel the mud to the Porong River, Rp300 billion for dam construction, and operational costs of mudflow handling at about Rp100 billion per annum. How much is that? Rp3.12 trillion or about US$320 million.

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Sukowati oilfield investigated for poisonous gas

The Upstream Oil and Gas Regulatory Body (BPMigas) has sent a team to investigate hydrogen sulfide outflow in Petrochina-operated Sukowati oilfield in Bojonegoro regency, East Java this week. Operation of the field has been halted for few days as residents complained about the poisonous gas.

"But according to our investigation, the gas outflow is normal," Sukarnoto Sukimin, field manager of the joint operating body Pertamina-Petrochina East Java told Kompas.com on Sunday.

BPMigas investigation team has been deployed to the oilfield on Saturday. Production activities on the 3,000 bpd oilfield has been suspended, but may be resumed in the next few days.

Bojonegoro Police has instructed an investigation on the gas outflow as hundreds of people complained about the gas outflow might have poisoned them. Hopefully this will not become the next Lapindo mudflow.

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Tanjung Miring Timur oil output drops 14%

Interra Resources, a company controlled by Indonesian businessman Edwin Soeryadjaya, reported gross production of oil at Tanjung Miring Timur of 38,068 barrels in the fourth quarter of 2009, declined 14% from the previous quarter due to mechanical difficulties in the lifting equipment.

"Mechanical difficulties in the lifting equipment resulted in significant down time. Oil movement and transportation equipment problems were experienced by the operator during the quarter," Interra said in a statement. 

A reassessment of the current production activities and plans, and an evaluation of the scope of future development strategy 

are underway bInterra internally. Interra owns 70% of the technical assistance contract (TAC) with state-owned oil and gas company Pertamina.

Interra also owns 50% participating interest in three oil and gas blocks in Thailand and one block it acquired in Australia last November. It also operates YNG 3234 oil block in Myanmar.

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Carnarvon on Rangkas Block

Carnarvon Petroleum said a seismic survey of up to 500 Km at Rangkas oil and gas block is in planning for acquisition in the third quarter of this year. Based on the results of this seismic survey, the joint venture may commit to additional seismic and drilling in 2011-2012.

Carnarvon is the owner of 25% participating interest in Rangkas PSC. Others are Lundin Petroleum with 51% interest and Tap Oil 24%. Lundin is the operator of the PSC, located onshore West Java, southwest of Jakarta, and covers an area of 3977 Km2.

Previous drilling in the block and surface oil seeps confirm an active petroleum system. Several prospects and leads are identified in the block based on reprocessed 2D seismic data.

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Traffic information services

Traffic or Macet is the word people mention every time they're asked to describe major cities like Jakarta, Bandung, or Surabaya. Radio station like Elshinta is famous for its traffic information, thanks to listeners' active participation in providing information through SMS and regular update from "official" sources like Jakarta Metropolitan police or Bogor police when it comes to Puncak area. 

Technology, especially ICT, has triggered some people to develop new traffic information services, live, web-cam-based through digital platforms like iPhone and Blackberry. There are some web portals developed to provide close to real-time traffic situation like Lewatmana.com, Macetlagi.com or Infolalulintas.com. The first two seems increasingly popular, at least based on traffic from web users identified by Alexa.com. Lewatmana.com tops the list, currently ranked 2132 in Indonesia according to Alexa.com, while Macetlagi.com is ranked 4409. Infolalulintas.com is far behind these two at 27994. 

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Politicians who tweet

It's just amazing that Twitter gained so much popularity in Indonesian politics. President candidates have their accounts created by campaign managers. But some have their personal accounts. Vice President Boediono is one of the most active Twitters. He posted 144 tweets and has 34,293 (at least check) followers and following 996.

His last tweet was on January 11th when he was about to testify before the House special committee to investigate Century case. He also uses the Twitter account to communicate his views, feelings, and "campaign" on certain issues. ICT minister Tifatul Sembiring is also on Twitter. He has lot more followers than Boediono. He has 37491 followers, is following 1541, and posted 1810 tweets already. The last tweet was two hours ago when the politician from Prosperous Justice Party (PKS) was preparing for Gunung Gede hiking in Cipanas, West Java. He invited people to join. He is following Microsoft founder and owner Bill Gates on Twitter. Tifatul has more followers than popular artist Agnes Monica (36,533) who has tweeted 978.

The hottest is probably Aburizal Bakrie's account. Aburizal is chairman of Golkar Party and Bakrie Group of Companies. Aburizal has less followers (5664) than both Boediono and Tifatul. Aburizal effectively uses his account to defend some allegations on his group and Golkar Party. He is following only 11, but has tweeted 351. He is following tweets from his son Anindya Bakrie (CEO of Bakrie Telecom). The last tweet was 8 hours ago when he updated his whereabouts: Jambi, Padang, Bintan (all in Sumatra region) for Golkar Party affairs.

Aburizal's account is also a place for "discussion" of issues like Lapindo mudflow, allegation of tax evasion on Bumi Resources, and "impeachment" motion by some Golkar politicians.

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AWE to farm-out Terumbu PSC

Australia Worldwide Exploration (AWE) Ltd, owner of 42.5% participating interest in Bulu production sharing contract (PSC), will start exploration drilling at Liyun-1 well in March 2010. The well will target an Early Miocene reef complex with the potential to hold 75 million barrels of recoverable oil.

AWE said Lengo-2 well will also be drilled in the program to appraise the gas discovery made in early 2008. AWE told investors this morning that it has defined a number of sizeable follow up prospects in Bulu and in its 100% held adjacent Terumbu PSC, where its actively progressing plans to drill one or two exploration wells.

"AWE is considering farming out a portion of the Terumbu PSC," the company said in a quarterly report. The 3D seismic survey in the eastern portion of the Bulu PSC and in the newly acquired Terumbu PSC has been interpreted and numerous reef prospects have been mapped.

In East Muriah PSC, where AWE has 50% interest, a 1,200-Km 2D seismic survey acquired was processed and is being interpreted. 

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5 Oil blocks await ministerial decree

Extension of production sharing contract (PSC) for five oil and gas blocks are pending approval from minister of energy and mineral resources, while one block is being reviewed by the Upstream Oil and Gas Regulatory Body (BPMigas).

The blocks to be extended are Central and South Sumatra PSC (Medco EP Indonesia), Bawean (Camar Resources, Canada), Madura Strait (Husky Oil Madura Ltd), Malacca Block A (Medco E&P Malacca), and West Madura (Kodeco Energy). Meanwhile, PSC for Mahakam Block (Total E&P Indonesie & Inpex) is being reviewed by BPMigas. Pertamina and some local groups are chasing participating interest in the gas-rich block, which supplies Bontang LNG plants. 

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Alex Rusli joins Indosat

Shareholders of the second largest telecommunication company PT Indosat (ISAT) Tbk have appointed Alexander Rusli, former special staff of minister of state-owned enterprises Sofyan Djalil, as commissioner of the company. He was also special staff for Djalil when the later was minister for information and communications.

Shareholders also appoint Chris Kanter, deputy chairman of Indonesian Chamber of Commerce and Industry (KADIN Indonesia), as commissioner. Rusli and Kanter replaced Michael Latimer and Setyanto Prawira Santosa.

Indosat stock price surged 6.6% to Rp5650 today. At that price, Indosat has market capitalization of Rp30.696 trillion or about US$3.3 billion. Indosat had total asset of Rp54 trillion as of September 2009.

Mr Alexander Rusli is currently a commissioner of PT Krakatau Steel (Persero), the 100% state-owned company that produces carbon-steel products. At ICT ministry, he was involved in the formulation of policy, regulation and in overseeing the national state ICT infrastructure projects, a position he held under two cabinet ministers. Mr. Rusli has also acted as a Principal Consultant for Pricewaterhouse Coopers. He holds a Doctor of Philosophy, Information Systems, Curtin University of Technology.
As for Mr Chris Kanter, he is Chairman and Founder of Sigma Sembada Group, a major turn key contractor with transportation and logistics arms. He had been Vice President of the Indonesian Chamber of Commerce and Industry (KADIN Indonesia), continuously since 1994. In addition to his commercial interests, Mr Kanter has also held a number of roles in the Indonesian Government and has been closely involved with The Policy Package for Improving Investment Climate in Indonesia.

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Cooper's Gigir East-1 spuds April

Cooper Energy Ltd is preparing for spudding of Gigir East-1 well in South Madura PSC in April 2010. Civil works has been awarded and it is expected that work will commence around mid-February. Drilling services have also been awarded. Cooper is the owner of 30% participating interest in the PSC. 

In addition to the award of the civil works and drilling services, three available rigs have been shortlisted and the final phrase of the tender process is underway. It is expected that the drilling rig tender process will be completed in mid February 2010 and a drilling contract awarded at that time. 

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Kalbe net profit soars 31.7%

PT Kalbe Farma (KLBF) Tbk, the largest pharmaceutical company listed on IDX, indicates net profit of Rp930 billion last year, surged 31.7% from the previous year on stronger sales and healthy margin. The company sits over huge cash in hands of Rp1.25 trillion.

KLBF in its presentation material disclosed indicative unaudited consolidated financial results for the full year 2009 as follows: (1) Net sales increased 14.3% to Rp9 trillion, (2) Operating profit surged 31.3% to Rp1.5 trillion, and (3) Net profit of Rp930 billion, soared 31.7% from 2008.

With earning per share (EPS) of Rp97, KLBF is currently traded with PE multiple 16. KLBF stock price jumped 6.25% today to Rp1530. At that price, KLBF has market capitalization of Rp15.54 trillion or about US$1.7 billion.

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Pertamina CFO to be replaced

Government will replace Pertamina's finance director Frederick T. Siahaan and move him to new post as director for business development and risk management. Another important replacement will be on marketing director Achmad Faisal.

People at the ministry of state-owned enterprises said Frederick will be replaced by Evita Tagor, who is currently deputy for financing and risk management at the state-owned oil and gas company. Achmad Faisal, meanwhile, will be replaced by Hanung Budya, who is currently deputy marketing director. Bagus Sudaryanto and Triharyo Indrawan Soesilo will also be appointed director of upstream and processing respectively. Triharyo is currently president director of PT Rekayasa Industri, a subsidiary of state-owned fertilizer company PT Pupuk Sriwijaya.

New political landscape, new cabinet, new ministers, and as usual, new members of board of directors and commissioners at state-owned companies.  

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Metrodata sells EMC

PT Metrodata Electronics Tbk has informed BT Frontline Pte Ltd about its plan to exercise the put option on all its shareholding in PT E Metrodata Com (EMC). According to the joint venture agreement, BT Frontline Pte Ltd is obliged to purchase Metrodata's shares in EMC, a JV with BT Frontline and Sun Microsystem Inc.

PT EMC was established in January 3rd, 2007. It is not clear how much Metrodata will get from the put option. According to Metrodata's financial report, the company owns 51% shares in EMC with total asset of Rp55.1 billion. Metrodata is also the owner of 31% shares in PT Sun Microsystems Indonesia with total asset of Rp252 billion.

Metrodata reported net sales revenue of Rp2.32 trillion in Jan-Sep 2009, increased slightly from Rp2.314 trillion in the same period of 2008. The company's net profit, meanwhile, dropped substantially from Rp23.6 billion to Rp7.8 billion in the period.

Metrodata is currently owned by Ockham Cay Holding Ltd (BVI), Hiskak Secakusuma, and public (78.71%).

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KrisEnergy completes Serica assets acquisition

Singapore-based KrisEnergy Ltd has accomplished the acquisition of Serica Energy PLC's oil and gas assets in South East Asia, including blocks in Indonesia, for US$105.4 million.
With the acquisition, Serica's interests in Indonesia now comprise a 25% interest in the Kambuna field, a 30% interest in the Kutai PSC, and a 100% interest in the East Seruway PSC.
Meanwhile, KrisEnergy controls 25% interest in Kambuna gas field and 24.6% interest in Kutai PSC. Serica's financial adviser for the acquisition is JP Morgan Cazenove. Serica plans two or three wells drilling in the second half 2010 in the Kutai PSC.
Production from the Kambuna field was temporarily suspended on 25 September at the request of the gas buyer, the Indonesian state electricity generation company PLN, so that it could carry out necessary repairs to its gas turbine generators. Production from the field restarted on 7 November at an initial rate of 10 million standard cubic feet (mmscf) per day. Resumption of gas sales also allows condensate sales to restart. The Kambuna field produces approximately 100 barrels of condensate per mmscf of gas
The gas sales contract with PLN provides for a contract quantity of 35 mmscf/day for the first twelve months and it has already been demonstrated that rates in excess of this can be delivered. Once full production is reached, every effort will be made to deliver in excess of 35 mmscf/day to PLN. Sales of 12 mmscf/day to the second buyer are expected to commence in January 2010 plus a further 4-5 mmscf/day of sales for LPG production.

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Arif Siregar resigs from INCO

Arif Soeleman Siregar has tendered his resignation letter as CEO of PT INCO, but pending shareholders meeting scheduled in March 2010. INCO reportedly offered him non-executive position (commissioner).
Arif was appointed CEO of INCO in July 2006. He was president director of PT Kelian Equatorial Mining prior to the INCO job. He has also served as Vice President of PT Rio Tinto Indonesia. Prior to that, he was employed by Palabora Mining Company (PMC) South Africa, as General Manager Industrial Minerals. He has held the position of General Manager Coal Chain of PT Kaltim Prima Coal (KPC) East Kalimantan.
Mr. Siregar is Chairman of the Indonesian Mining Association (IMA), Vice Chairman of the Energy Committee of the Indonesian Chamber of Commerce and Industry (KADIN), and a member of the Board of Advisors Organization of the Indonesian Mining Experts(PERHAPI).
Mr. Siregar is a graduate of Bandung Insitute of Technology,where he obtained his Bachelor of Science degree (Mining and Metallurgy) in 1980. He completed his Ph.D (Metallurgy) at the University of Queensland in Brisbane, Australia in 1992.

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Telkom acquires AdMedika

PT Multimedia Nusantara (METRA), a subsidiary of PT Telekomunikasi Indonesia (TLKM) Tbk has signed conditional sales purchase agreement to acquire 75% shares of PT Administrasi Medika (AdMedika), a foreign-owned company in electronic healthcare network service in Jakarta.
The agreement was signed by Metra CEO Alex J. Sinaga and shareholders of AdMedika, represented by Sofian Sutantio, Ravi Kanason, and Shia Kok Fat. TLKM expects closing of this acquisition by the end of next month. Unfortunately total consideration of this acquisition is not disclosed.
AdMedika is the largest provider of healthcare administration in Indonesia. The acquisition is part of TLKM's transformation to become a TIME (telecommunication, information, media, and edutainment) company.
AdMedika has 1.2 million members with reported market share of 12% in e-health industry. The company works with 717 health providers and 26 insurance companies.

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Commodities drag down IDX

IDX composite index declined 0.7% this morning due to negative regional sentiment and pressures on commodities-related stocks. Last night's rebound in Wall Street failed to cheer up investors. Shanghai lost 2% while Hang Seng dropped 1.6% this morning. Bumi Resources, the most traded stock on IDX, slashed 4.67% already.

Other coal stocks are also under pressure. Shenhua and China Coal declined 2.44% and 2.7% in Hong Kong, while Adaro dropped 3.09% in Jakarta. Indika, which co-owns Kideco, declined 2.91%, while Bukit Asam unchanged and Indo Tambangraya gained 2.2%. Straits Asia declined further by 2.17% in Singapore.

Plantation stocks in Indonesia, Malaysia, and Singapore were mainly in red. Bakrie Sumatra lost 4.92% in Jakarta, while First Resources dropped 6.3% in Singapore, and IOI declined 1.82% in Malaysia, leaving only Wilmar with 0.3% gain on SGX.

How about metals? Well, China Yunnan Tin, the world's largest tin producer, dropped 3% in Hong Kong, while Timah (TINS), the second largest producer, declined 1% in Jakarta. Aneka Tambang and INCO conceded 3.41% and 1.4% respectively.

Oil and gas? Well, PGAS retreated almost 2%, Medco -3%, and Energi Mega Persada -1.69%. Sinopec, Petrochina, and CNOOC are all in red even though crude oil increased to US$75 per barrel on weaker USD. 

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Indonesia will implement total ban on cigarette ads

Draft of implementing regulations for Health Law enacted last year points to a total ban on cigarette advertising in all media, electronic, print, and outdoors. It will be a bad news for media companies, especially televisions, but probably good news for Tax Office which complained huge ads costs have cut potential income tax payment of cigarette companies.

Government Regulation No. 19/2003 allows TV cigarette advertising after 9.30 PM until 05 AM. But under the draft of government regulation about tobacco, all kinds of ads on tobacco products are forbidden. Producers and importers will also be forbidden to become sponsors of an event. Logos will be prohibited from all kinds of non-cigarette products.

Sundoyo, head of legal bureau at Ministry of Health said the draft is part of government's plan to implement Law No. 36/2009 about Health.

Even ads related to CSR campaign of cigarette companies will be strictly regulated. TV companies will be badly hurt with the total ban because until now cigarette producers are among the biggest spenders.

But Tax Office might be happy. Advertising and promotion costs are hugh enough to cut income tax of cigarette companies. That's why last year ministry of finance issued a decree to cap the advertising and promotion costs that could be deducted in tax calculation. But early this month, the ministry revoked the policy. Total ban on advertising would be the answer.

Another important issue in the draft is prohibition to sell tobacco products in retail/pieces. People have to buy in a pack (with minimum 20 pieces). That's gonna be a bad news for street vendors.

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Budiarto Maliang detained

Corruption Eradication Commission (KPK) has just detained Budiarto Maliang, former commissioner of PT Kimia Farma Trading and Distribution, a subsidiary of state-owned pharmaceutical company PT Kimia Farma (KAEF) Tbk. He is detained for an alleged corruption in a project to supply X-rays to eastern part of the country. 

According to Detik.com, KPK suspected Budiarto of embezzling Rp2.46 billion or about US$260,000 from the Rp18.05 billion project. KPK considered a State loss of Rp9.4 billion in the project. Budiarto is detained at Cipinang penitentiary.

Last year, KPK detained former health minister Achmad Sujudi, former KAEF CEO Gunawan Pranoto, and RY (director of PT Rifa Jaya Mulia) on alleged corruption in a Rp190 billion project where the State is believed to have lost Rp91.5 billion. 

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Glenn Yusuf joins CIMB Group

CIMB Group Holdings Berhad, formerly known as Bumiputera-Commerce Holdings Berhad, has appointed Glenn Muhammad Surya Yusuf, former chairman of Indonesia Bank Restructuring Agency (BPPN) as independent non-executive director.

Glenn has actually served on CIMB Group's International Advisory Panel since 2006 and was deputy chairman of the Bank Niaga-Bank Lippo integration steering committee in 2008. He was president director of PT Perkebunan London Sumatra (LSIP) Tbk in the period of 2003-2007.

Glenn was IBRA chairman in 1998-2000. Before that he was CEO of PT Danareksa (Persero), a state-owned investment bank. CIMB Group is the controlling shareholder of Bank CIMB-Niaga, the fifth largest bank in Indonesia with total asset of over Rp103 trillion as of September 2009.

Born in Jakarta, July 17, 1955, Glenn's name was implicated in the prosecution of State attorney Urip Tri Gunawan. At the court hearing in 2008, prosecutors accused Urip of threatening Glenn if he doesn't pay Rp1 billion, he would be named a suspect in the controversial Bank Indonesia liquidity assistance (BLBI) scandal. Glenn was afraid, and according to prosecutor, he gave Rp110 million to Urip through Glenn's lawyer Reno Iskandarsyah.

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Sebastian Paredes resigns from Danamon

Juan E. Sebastian Paredes M has tendered his resignation letter as chief executive officer (CEO) of Bank Danamon. He has been in the position since May 2005. Danamon had total asset of Rp100 trillion as of Sept 2009, while its market capitalization surged 112% since April 2009 to Rp44 trillion.

People close to Bank Danamon confirmed the rumor that Sebastian Paredes resigns as the CEO of the bank. "There will be a media briefing on Monday about that," one source at Danamon said Friday night. It is not clear why Sebastian resigns.

Danamon told IDX Monday morning that his resignation will be effective after the bank's shareholders meeting scheduled in April 2010.

Sebastian was appointed CEO of Danamon in May 2005. An Ecuador citizen, Sebastian born in 1961. Graduated with bachelor of science from California State University, Sebastian (his full name is Juan Eugenio Sebastian Paredes Muirragui) got his MBA from Instituo de Empresa, Madrid, Spain. He was managing director of Citigroup for South Africa before the Danamon job. 

Danamon is indirectly controlled by Singapore's Temasek Holdings. Danamon is the fourth largest bank in Indonesia in terms of market cap, behind BCA, Mandiri, and BRI, but the sixth in terms of asset behind Mandiri, BRI, BCA, BNI, and CIMB-Niaga.

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Vote an Idol, you get an album

President SBY has just released the third album titled : Ku Yakin Sampai di Sana, literally means: I believe will get there! This is the most productive song writer in the world's history for category: President in office. But this is might the result of people's vote in July 2009 election. They elected an idol, so they may get the album now.

Kompas reported that in this album SBY collaborated with famous musicians like Rio Febrian, Tantowi Yahya, Koeswoyo Junior, etc. I haven't listened to the songs. But the online publication said nine songs have different music genre.

BTW, how good was the marketing of two previous albums? The first album, titled, Rinduku Padamu (2006), also with nine songs (SBY loves everything Nine, but probably not Nine West), sold for Rp20,000 or about US$2. The second is titled Majulah Negeriku (2007). Added with the compilation album released five months before election last year, SBY produced three albums in five years of presidency. Now he started earlier in the second term. He might produce three more in the next four years before leaving office.

Marketing prospect of the third album? Well, at least someone, Andi Mallarangeng, minister for youth and sport affairs/former President's spokesperson, believes the album will be a HIT. To boost the marketing, according to Andi, there are plans for nationwide festival and singing competition on SBY's songs.

Why is he productive in writing songs? Probably he wants to be remembered as composer instead. But Andi said "he wants to communicate with his people." Well...daily speeches are seemed not powerful enough...

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Top 40 controls US$187 billion

Combined market capitalization of 40 companies (Top 40) listed on Indonesia Stock Exchange (IDX), with minimum cap of US$1 billion, as of January 22, 2010 is US$187 billion. Telkom is the largest with US$20 billion, followed by Astra International, Bank Central Asia, Bank Mandiri, and Bank Rakyat Indonesia. Overall, 9 banks dominated the Top 40 with combined market cap of US$47 billion.

Unsurprisingly, all major coal producers (and coal mining contractors) are listed in the Top 40 with the following order: Adaro, United Tractors, Bumi Resources, Bukit Asam, Indo Tambangraya Megah, Bayan Resources, Indika, and Delta Dunia Makmur. 

All cement companies are in the list with the following order: Indocement, Semen Gresik, and Semen Cibinong. Three telecom companies are in the list: Telkom, Indosat, and XL Axiata. Only two property companies: BSDE and Lippo Karawaci, while pharmaceutical only has Kalbe Farma. Plantation also has two: Astra Agro and London Sumatra. 

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Harvey Nichols repositions targeted market

PT Mitra Adiperkasa (MAPI) Tbk denied our earlier report about closing down Harvey Nichols store in Jakarta. The company said it just relaunched and repositioning the targeted markets. MAPI also claimed the store's performance has been progressing well. 

"We just did a relaunch back in September as well as repositioning our targeted market. And as far as I have observed, things have been progressing well," Joseph Landri, investor relations of PT Mitra Adiperkasa (MAPI) Tbk said.

Rumors about closing down Harvey Nichols in Jakarta have been out there since December. Kontan newspaper quoted anonymous source early last month about the plan to close down the store, reportedly due to poor prospect. The newspaper even speculated on substantial layoff.

We got the same information last week, most likely because of the so-called "repositioning". But Landri said "this news (closing down Jakarta store) is completely false and deceitful."

Unfortunately Landri didn't provide details about the "repositioning". Let's see whether this "repositioning" will work. 

Late last year, the food market had been closed down. Others have speculated on the closing down of Harvey Nichols after Chloe boutique closed its doors, replaced by store for old stocks from Harvey last year.

PT Hamparan Nusantara, a subsidiary of MAPI, entered into an exclusive license agreement with Harvey Nichols in January 23, 2007 which grants the company the right to open and operate stores Harvey Nichols, guaranteed by the company. Under the agreement, Hamparan shall pay royalty and other fees based on certain percentage.

MAPI is listed on IDX with market capitalization of Rp1.09 trillion as of January 22, 2009. The company reported net sales of Rp4.04 trillion in nine months of 2009, increased 15.6% from the same period in 2008. Unfortunately, no details provided on individual stores. 

MAPI booked net profit of Rp166.3 billion in Jan-Sep 2009, doubled from Rp83 billion in the same period of 2008, but mainly due to non-cash gain in foreign exchange translation of Rp147 billion. The company's operating profit increased 14.5% in the period. MAPI is controlled by PT Satya Mulia Gema Gemilang (58%), Prudential Life Assuance (6.76%), and public (34.4%). 

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Nine companies compete for Internet project

Government has shortlisted nine companies in a competitive bidding to build and supply Internet Access under universal service obligation (USO) program for sub-regencies around the archipelago. They're selected from 19 companies pre-qualified in the previous bidding round.

There were 25 companies entered the process, but six companies were declared not qualified. They are PT Cyber Network Indonesia, PT Inet Global Indo, PT Nettocyber Indonesia, PT Sejahtera Globalindo, PT Total Indo Kharisma, and PT Core Mediatech. 

Out of 19 companies pre-qualified, only nine companies submitted bid documents for the next round. They are PT Telekomunikasi Indonesia for 11 packages, PT Indonesia Comnets Plus for 7 packages, PT Aplikanusa Lintas Arta for 3 packages, PT Pos Indonesia for 11 packages, PT Netwave Multimedia for 11 packages, PT Jastrindo Dinamika for six packages, PT Sarana Insanmuda Selaras for 3 packages, and PT Jasnita Telekomindo for one package.

Others pulled out from the process. They are PT Berca Hardayaperkasa, PT Indosat Mega Media, PT Multidata Rancana Prima, PT Indointernet, PT Rahajasa Media Internet, PT Telekomunikasi Selular, PT Mora Telematika Indonesia, PT Indopratama Teleglobal, PT Indonesia Mesh Networks, and PT Jasa Jejaring Wasantara.

Interestingly, the stiffest competition will be for Package 9 which covers four provinces in Maluku and Papua. Seven bidders are competing for this package. East Java and Bali, West Nusa Tenggara, and East Nusa Tenggara packages also attracted six bidders. 

Winners will be announced next week or so.  

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Rafat & Hesham: Catch us if you can!

Rafat Ali Rizvi and Hesham al Warraq are business partners of Robert Tantular at the troubled Bank Century. They blame each other for the mess that led to the controversial US$700 million bailout. Robert has been sentenced five years prison, but Rafat and Hesham are living in peace out there. Some Indonesian journalists have even been invited to interview Rafat in Singapore where he repeatedly said: I want to come to Indonesia to settle the mess. Will they?

It's ridiculous, sometimes, to read media reports about Rafat. Some reported Rafat was willing to come but he is prevented from entering the country. Why would the country do that while Rafat and Hesham are classified "wanted persons"?

This week, Susno Duadji, former chief of police detectives, told the House' special committee to investigate Century case that Rafat once sent letters to Indonesian government about his willingness to repay the US$700 million bailout funds but failed to get satisfactory responds from finance ministry. But isn't this strange? If you have been charged of embezzling US$700 million, why would you come out and say "I will repay!"?

Looks like that these guys want to get the embezzled funds unlocked. Today Kompas reported that Rafat and Hesham could enter the country because they're only prevented from going out of the country. Of course they can, or "warmly welcomed to face the prosecution", to be exact.

AGO said trial on them will be done in absentia in Jakarta and can't accept their demands to have the trial in London, UK instead.

Indonesian police have identified over US$1 billion of assets controlled by Robert, Rafat, Hesham, and companies related to them in various countries. Police claimed that these assets have been frozen and that Indonesian government could only get these funds if they're convicted in crimes.

Two weeks ago, national newspapers published Rafat statement saying "he and Hesham were willing to testify before the House committee for Century investigation", but not in Jakarta. They want the Committee meet them in London instead. They accused Robert is the mastermind of all frauds at Century and that they're also the victims. Really?

Well, Bank Indonesia deputy governor Budi Rochadi said "Rafat is a thief." Former deputy governor Aulia Pohan, father in law of Agus Harimurti Yudhoyono (son of President SBY), considers Rafat as the most dangerous person in the world. Rafat dropped a bomb late last year when he told reporters (in Singapore? Who invited? Who arranged?) that Robert Tantular financed the selection process for one of the officials at Bank Indonesia to become senior deputy governor.

Well...soon, Rafat and Hesham might be convicted in an in absentia court proceedings for a simple reason: We can't touch anybody hiding in SINGAPORE!!!!! Save INdonesians to Get Away from POlice arREsts!

PS: Hesham, born in Cairo, Egypt, April 12, 1958 is a Saudi Arabia citizen, while Rafat born in Pakistan, October 22, 1960 is a UK citizen.

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Wall Street falls 2%, TGIS!

Thank God It's Saturday! Dow Jones Industrial Average (DJIA) fell 2.09%, the worst setback in almost 11 months as investors continued to worry about President Barrack Obama's plan to restrict big banks. The benchmark crude for March delivery settled substantially lower at US$74.54 per barrel. Interestingly, thermal coal spot prices in Newcastle, benchmark for Asian market, advanced further to US$99.26/ton. 

JPMorgan, Credit Suisse, UBS, Deutsche Bank, Goldman, and Morgan Stanley lost 3-6%. Miners were also hit, led by Alcoa's -6% and Freeport McMoRan's -2.7%. 

Chevron and ConocoPhillips dropped 2.16% and 3.14% respectively as crude oil fell further to US$74.54/barrel. Crude has fallen 13% from its recent peak.

Thermal coal spot prices, meanwhile, looked strong. Other than 1.5% gain in Newcastle Port, Australia for the week ended January 22, spot prices in Richard Bay (benchmark for South Asia and Europe) stabled at US$87/ton, while DES ARA Index declined slightly to US$83.77.

Tech stocks? Well, Intel lost 4.46%, while Cisco -4.21%, Microsoft -3.5%, HP -3.9%, and IBM -2.71%. Consumers were the only gainers, but not significant to support the index. 

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Newsroom downsizing

Rumors swirling around that Lippo-controlled publications (The Globe Magazine, The Jakarta Globe newspaper, and Suara Pembaruan) are downsizing their staffs. The Globe magazine and newspaper will merge their newsroom. At least 15 journalists have reportedly laid off. In the meantime, Tempo reported lower advertising revenue for both the magazine and newspaper.

Bigger layoff is reportedly going to happen at Suara Pembaruan evening paper, co-owned by Lippo Group and Edwin Soeryadjaya. About 90 staffs will have to find new job. Investor Group, also controlled by Lippo, will also see some of its marketing staffs laid off.

Print media has been struggling for years now. Financial reports of Tempo and Republika shown substantial decline in revenues from advertisements. The Tempo Magazine, for example, reported advertising revenue of Rp37 billion in nine months of 2009, dropped substantially by 14%. The Koran Tempo newspaper, meanwhile, reported smaller decline of 2% to Rp28.8 billion in the same period.

Income from circulation of magazines and newspaper were not significant enough to cover higher expenses. Tempo Media Group reported higher sales revenue of 9.4% in Jan-Sep 2009 mainly because of sales of non-media print materials (most likely ballot paper for the election cycles last year).

Bottom line? Tempo Media reported net profit of Rp1.66 billion, dropped 26% from the same period last year.

Abdi Bangsa, publisher of Republika and some magazines, reported lower sales revenue of 10% to Rp92.9 billion in 9 months of 2009, mainly because of almost 50% drop in ad + circulation revenues for magazines, while ad + circulation for newspaper increased only by 6.5%. Interestingly, income from Dotcom surged 117% to Rp3.99 billion. But with higher operating expenses, this publisher reported operating loss of Rp0.7 billion, crashed from operating profit of Rp9.7 billion in Jan-Sep 2008. Abdi Bangsa's net profit fell 77% accordingly.

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Salim spends US$571 million to control Philex

First Pacific Company Ltd, a company controlled by Salim Group, has just entered into conditional sale agreement through its Philippine affiliate, Two Rivers, to acquire an additional 5.9% shares in Philex which will make the company controls 15.1% shares. First Pacific has previously purchased 31.5% shares in Philex for US$234 million.

On completion of the Acquisition, Two Rivers’s total investment cost in acquiring approximately 15.1% interest in Philex will amount to approximately US$337 million and the Group’s total investment cost in acquiring approximately 31.5% interest in Philex will amount to approximately US$234 million, thereby making up a total of US$571 million.

Philex is a mining company. The company has operated for the past 51 years the Sto. Tomas II deposit at Padcal, Tuba, Benguet. The Padcal mine is the first underground block cave operation in the Far East. Total ore mined to year-end 2008 was 332.2 million tones, with a metal production of 162.2 million grams of gold (5,218.4 thousand ounces), 897.4 million kilograms of copper (1,981.7 million pounds), and 177.9 million grams of silver (5,732.7 thousand ounces). The Padcal mine is the only remaining large-scale copper-gold operation in the Philippines.

First Pacific is a major player in the Philippines with 26.5% economic interest in PLDT (telecommunications), 54.1% in MPIC (infrastructure), and Philex (40.7%). First Pacific controls 50.1% shares in PT Indofood Sukses Makmur (INDF) Tbk which currently has market cap of US$3.5 billion.

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Adi Tahir leads chamber of commerce

Businessman and Golkar politician Adi Putra Darmawan Tahir has been appointed provisional leader of Indonesian Chamber of Commerce and Industry (KADIN Indonesia) to replace MS Hidayat, who has been appointed industry affairs minister since October 2009. Adi was deputy chairman of the organization.

Adi will be the provisional leader of KADIN Indonesia until March 2010 when the organization will have its special convention to elect the permanent chairman. Who is Adi?

Born in Bandung, West Java, in May 18, 1953, Adi is a member of House Commission VI (in charge of industry and trade affairs) from Golkar Party. 

He is the owner of PT Adyro Dwimitra and PT Pratama Lintas Komunika. He was the chairman of Indonesian Young Entrepreneurs Association (HIPMI) in 1992-1995. He is son of the late Achmad Tahir, former tourism and telecommunication minister under Soeharto regime. His sister Linda Amalia Sari Agum Gumelar is currently minister for women affairs. Linda is wife of Lt General (ret) Agum Gumelar, former transportation and telecommunication minister under both Wahid and Megawati administrations.

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Bakrie stocks fall

Global and regional market pressures, combined with negative sentiment on commodities following the fall of crude oil to about US$75 per barrel, hit Bakrie-related stocks. Bumi Resources, the most traded stock on IDX, slashed 5.5% this morning, while Bakrieland's plan for a new deal with Limitless (Dubai World) failed to stop the stock from falling almost 6%. Bakrie Sumatra Plantation also lost almost 5% this morning.

Bumi Resources (BUMI) is under selling pressures with over 200 million shares traded so far this morning. All coal stocks in the region dropped substantially. Shenhua lost 4.81% in Hong Kong, Adaro -2.6% in Jakarta, and BHP declined 2.8% in Sidney. Indika, Indo Tambangraya, Bukit Asam, Straits Asia, and Rio Tinto are all in negative territory. 

The crude oil's fall also hit oil and gas stocks. Medco lost 3%, while Bakrie's Energi Mega Persada declined 0.6%. CNOOC and Petrochina slashed 3.72% and 1.63% in Hong Kong, while Woodside and PGN lost 2.53% and 1.33% respectively.

Plantation stocks also lost ground, led by those listed on SGX (Indofood Agri and Golden Agri conceded 4.9% and 4.5% respectively), while Bakrie Sumatra, Sampoerna Agro, and Astra Agro Lestari declined 4.8%, 1.72%, and 1.41% respectively in Jakarta.

BCA, the third largest company on IDX by market cap, lost 2%, while Mandiri and BRI conceded 2.13% and 1.27%. Danamon led the downfall with -4.67%. Telkom, the largest company by market cap, also dropped 2.12%.

IDX composite index declined as much as 2%, while rupiah lost 100 points against USD. 

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Dow falls, Asian stocks follow

Dow Jones Industrial Average (DJIA) lost 2.01% yesterday, the biggest drop in recent months as investors worried about US President Barrack Obama's proposed tough restrictions on banks. Stock markets in the region followed the trend this morning with Nikkei already lost 2.4%, while Australia's All Ordinaries slashed 1.82%. Footsie closed lower by 1.6% yesterday.

DJIA surged 64% in the period of March 2009 to last week. "I guess, it's a delayed correction," one fund manager commented. JPMorgan led the correction with 6.6%, while Bank of America lost 6.2% and Citigroup -5.5%. JPMorgan has lost 15% from its peak in October 2009, but the stock surged 256% in March-Oct 2009.

Energy stocks were also under pressure with Chevron, ExxonMobil, and ConocoPhillips declined 2.44%, 1.96%, and 1.55% respectively. Coal stocks also slashed, with Arch Coal, Peabody, and Consol dropped almost 6%. BHP Billiton followed with 2.65% drop in Sidney this morning. Rio Tinto declined 3.2% this morning after Thursday's 3% drop.

South Korea's KOSPI composite index declined 1.16% this morning. Singapore's Straits and Hang Seng (HK) might follow suit. Straits opened lower by 1.53%, Shanghai -1.46%. How about IDX? Well, IDX composite index opened lower by 1.5% to below 2600.

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