Analysis

Shared responsibility: Attracting private investment is central to development plans
OBG
plus

Two years into the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), progress has been spearheaded by government-led projects. Despite incentives and institutions established to attract private investment to public-private partnerships (PPPs), projects have been hindered by challenges in land acquisition and inefficient coordination between different tiers of…

Analysis

Austindo Nusantara Jaya: Agriculture
OBG
plus

The Company Austindo Nusantara Jaya (ANJT), established under the name Austindo Teguhjaya in 1993, engaged in financial services, health care, agrobusiness and energy prior to 2012. In that year, ANJT restructured its business to focus on palm oil and sago, as well as engage in power generation from geothermal and bio-gas. Growth in palm oil (93% of revenue), sago, tobacco (3%) and renewable…

Analysis

A growing appetite: Re-ratings and demand for high-yielding bonds are drawing investors to the fixed-income market
OBG
plus

Although Indonesia’s fixed-income market was only valued at around 15% of GDP in 2012, compared to 45% for equities, issuance and investor appetite have grown. The government has sought to rebalance its debt profile towards domestic sources, and the value of outstanding local-currency government bonds has doubled from $41.2bn to $84.9bn in the eight years to August 2013, according to the Indonesian…

Analysis

BJBR: Banking
OBG
plus

The Company Established in 1961, Bank Pembangunan Daerah Jabar Banten (BJBR) was the first district development bank, known as Bank Karja Pembangunan Daerah Djawa Barat. In 1992, the bank changed its legal status to become a foreign exchange commercial bank, with limited scope for operations in the East Java and Banten regions. Following its IPO of 2.4bn new shares, which raised approximately Rp1.5trn…

Analysis

Commodities exchange: A ban on unprocessed ore exports should drive demand for onshore contracts
OBG
plus

While attempts since 1999 to establish a dynamic commodity futures market have faced low liquidity and patchy trading, the single most significant stimulus has come from new government restrictions on the export of unprocessed mineral ores since 2013. The Trade Ministry, which oversees the Commodity Futures Trading Regulatory Agency (BAPPEBTI), has sought to build Indonesia’s commodity spot-trading…

Analysis

Broadening health coverage: Expanding the net and extending benefits
OBG
plus

As the government plans to begin reforming its social security system in 2014, private underwriters expect more profitable growth in health insurance. While there are five parallel schemes providing social security, some 37% of Indonesians, or around 88m people, have no health insurance and faced spiralling out-of-pocket medical expenses in 2012, according to the World Health Organisation (WHO). Meanwhile,…

Analysis

Frontier for takaful: Making space for a growing segment
OBG
plus

In the world’s most populous Muslim nation where over 85% of the population ascribes to the faith, Indonesia’s sharia-compliant insurance segment (takaful) remains marginal at a mere 3.9% of industry assets in 2012, according to a June 2013 report by rating agency Fitch. While proportionately small compared to neighbouring countries like Malaysia and Brunei Darussalam, the market has grown rapidly…

Analysis

Garuda Indonesia: Transport
OBG
plus

The Company Established over 60 years ago, Garuda Indonesia (GIAA) is the country’s first carrier and the only premium airline serving the local market, with an extensive network including 22% of domestic market share and 38% market share in cargo. On the international front, GIAA is also a market leader with a market share of 15.5% for departing flights. GIAA was in charge of operations for 131…

Analysis

Hedging your bets: Regulatory changes are set to support the growth of exchange-based derivatives trading
OBG
plus

Despite the widespread use of hedging instruments offshore, Indonesia’s derivatives market has been slow to develop. Bank Indonesia (BI) regulations in late 2008 following significant losses linked to onshore structured products have restricted foreign-exchange (FX) and interest-rate derivatives to over-the-counter (OTC) trading between banks. A new exchange established in 2009, the Indonesia Commodity…

Analysis

Malindo Feedmill: Poultry
OBG
plus

The Company Established in 1997, Malindo Feedmill (MAIN), which is involved in the production and distribution of poultry feed, has become a rising star within the growing poultry sector due to a low penetration rate. MAIN was formerly known as Gymtech Feedmill Indonesia, a subsidiary of two listed Malaysian companies, Leong Hup Holdings Berhad and Emivest Berhad. In 2000, MAIN acquired a feed mill…