THE COMPANY: Jasa Marga, established in 1978, was the first toll-road operator in Indonesia. The company is the market leader of toll road operators, managing approximately 532 km, or 72%, of toll roads in the country. Jasa Marga is currently in the process of developing another 200 km of toll roads. Operations are expected to begin gradually between 2011 and 2014. DEVELOPMENT STRATEGY: At present…
While government spending has not been a key driver of growth thus far, monetary policy has remained the key instrument of macro-economic management. Affected by balance-of-payments crises exacerbated by currency volatility, the central bank has maintained a watchful eye on the rupiah, which rose 14.4% against the dollar in 2010 and stands as the fastest-rising currency after the Singapore dollar…
THE COMPANY: In line with expectations, Kalbe Farma (KLBF) reported increased earnings in the first half of 2011. Sales grew approximately 5.14% year-on-year (y-o-y) to Rp4.94trn ($592.8m). This figure is equal to around 44.07% of the full-year projection of Rp11.22trn ($2.38bn). Pharmaceutical packaging and distribution remained the major contributor to revenue, making up 30.31% of KLBF’s total…
Although the country has already made strides to improve its investment climate, further bureaucratic reforms meant to streamline procedures and encourage private investment are central to Indonesia’s ambitions over the next 15 years. After years of centralised rule under Suharto, the initial “big bang” of decentralisation in 2001 wrought its own set of challenges stemming from at times overlapping…
With nine parties represented in the Indonesian legislature – and six of those present in the cabinet – the political landscape of the country is clearly very multifaceted. Though three parties tend to dominate the scene, no one group has been able to gain a majority in parliament and shifting coalitions and alliances ensure a wide variety of influences and viewpoints. THE MAJOR PLAYERS:…
The local banking sector has undergone many improvements since the 1997-98 Asian financial crisis. Risks are now being more carefully managed at the regulatory and individual bank levels, with strong incentives to manage credit portfolio losses. Perhaps as a result of these changes, the ratio of non-performing loans (NPLs) has declined over the last few years, although banks with high exposure…
In an uncertain global economic environment, emerging markets like Indonesia have faced volatile inflationary pressures. While local monetary authorities have had to quickly adapt to a shifting balance between inflation and economic growth, the government continues to keep the prices of necessities down through a mix of price controls and imports. While inflation re-emerged as a key downside…
THE COMPANY: The Report: Indonesia 2010 indicated that XL Axiata’s (EXCL) positive growth in the first half of 2010 would provide a clear picture of the company’s future. On the back of strategic initiatives, EXCL recorded revenue increases in 2010, which helped to improve share values. EXCL’s total revenues for 2011 grew 27.1% year-on-year (y-o-y) to Rp17.63trn ($2.12bn) compared to 2010.…
Despite a history of balance-of-payments crises caused by rapid swings in Indonesia’s current account balance, portfolio investors have by and large returned with confidence to the country’s capital markets since the recovery from the 2008 crisis – and this despite short-term corrections such as those during the summer of 2011. Although still volatile due to their limited depth, Indonesia’s…
Sources of long-term capital, particularly needed for large-scale projects in infrastructure, remain more elusive in Indonesia than in neighbouring economies. The contribution of pension funds and insurance companies has remained limited, yet the size of the mutual fund industry has grown significantly. Interest will likely grow further when Indonesia attains an investment-grade rating in 2012.…
