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FINANCE

UK EXPORT FINANCE EYES INDONESIA AS PRIORITY MARKET

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British Ambassador to Indonesia Moazzam Malik.

Greatindonesia.co.id, Jakarta – The UK Export Finance (UKEF) has selected Indonesia as the first nation in the world to have a country head to lead UKEF’s efforts to enhance trade relations between the United Kingdom and Indonesia.

“The choice of Indonesia as UKEF’s first overseas presence demonstrates the importance that the United Kingdom attaches to further developing Indonesia as a key trading and investment partner,” British Ambassador to Indonesia Moazzam Malik noted in a press release received by Antara on Monday.

As the British government’s Export Credit Agency, UKEF will help buyers across the world to trade with suppliers in the United Kingdom by offering attractive financing options.

Through this local presence in Jakarta, the UKEF will be better placed to deliver competitive and innovative finance to Indonesian companies and public bodies doing business with the United Kingdom.

“Significant opportunities exist for the two countries to cooperate in the key priority sectors, such as infrastructure, as was identified by the current administration and where the United Kingdom can offer added value,” Malik noted.

Richard Michael, the new country head for UKEF in Indonesia, remarked that in addition to its market-leading product range, UKEF is one of the few export credit agencies able to provide finance in local currencies, including the rupiah.

“UKEF is open for business in Indonesia, with billions of dollars in capacity now available for the country,” he added.

As the world’s oldest export credit agency established in 1919, UKEF will assist overseas buyers of British goods and services in terms of procuring from suppliers in the United Kingdom that offer quality and innovation by providing attractive financing options; borrowing at competitive interest rates from banks, with the benefit of a strong guarantee backed by the government of the United Kingdom; borrowing directly from the Government of the United Kingdom at competitive, fixed interest rates; and maintaining flexibility, with finance that can also be used to procure local supplies or those from other countries, alongside British supplies.

UKEF works with exporters in the United Kingdom and their overseas buyers to offer attractive financing options, including repayment terms of 2-10 years and up to 18 in some sectors, such as renewable energy; flexible British content requirements for projects supported; capital markets refinancing; sharia-compliant structures; as well as more than 40 local currency options, including Chinese Yuan, Hong Kong Dollars, Indian Rupee, Indonesian Rupiah, Malaysian Ringgit, Singapore Dollars, and Thai Baht.

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FINANCE

GOVT’S EXTERNAL DEBT MANAGEMENT PRIORITIZED TO FINANCE DEVELOPMENT : BI

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Such developments showcased a solid structure of Indonesia’s external debt in spite of an uptick in its position.

Greatindonesia.co.id, Jakarta – The government’s external debt management was prioritized to finance development, dominated in productive sectors to drive growth, in addition to boosting public welfare.

Public welfare improvement encompassed the human health & social work activities sector, constituting 19 percent of the government external debt; construction sector, 16.4 percent; education sector, 16 percent; public administration & defense sector, 15.2 percent; and financial & insurance sector, 13.9 percent, according to Bank Indonesia’s (BI’s) statement here on Monday (16/9/2019).

The private external debt rose in line with the investment requirements in several leading sectors.

The private external debt outstanding at the end of July 2019 increased 11.5 percent (yoy), an 11.1 percent yoy rise than that of the previous month.

The increase principally stemmed from the issuance of global bonds by non-financial corporations.

Private external debt was dominated by the financial & insurance sector; manufacturing sector; electricity, gas, & water supply sector; and mining & drilling sector. The share of external debt in these four sectors to the total private external debt reached 76.6 percent.

Indonesia’s external debt maintained a healthy structure, backed by the prudential principle application in its management.

The condition was mirrored in, among others, Indonesia’s external debt-to-gross domestic product ratio at the end of July 2019 at 36.2 percent, down from the previous month.

In addition, Indonesia’s external debt structure continued to be dominated by long-term debt, constituting 87.6 percent of the total external debt.

Such developments showcased a solid structure of Indonesia’s external debt in spite of an uptick in its position.

BI, in close coordination with the government, has continually monitored external debt by promoting the application of prudential principles, in its management to maintain a healthy external debt structure.

Furthermore, the role of external debt will be optimized in supporting development financing without incurring the risks that may impact macroeconomic stability. (akm)

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FINANCE

INDONESIA’S STOCK, BONDS MARKET ATTRACTIVE : INVESTMENT STRATEGIST

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Amidst the current low interest rates, Indonesian bonds are very attractive because they still provide high yields.

Greatindonesia.co.id, Jakarta – The Indonesian stock and bond market remains an attractive option amid the global economic turmoil, an investment strategist at an asset management corporation in Indonesia believes.

“The stock market still provides attractive investment opportunities because of its valuation. There is also the potential growth of the corporation’s profit which is estimated to be around nine percent this year,” the Chief Economist and Investment Strategist Manulife Asset Management Indonesia, Katarina Setiawan, said in a statement received here, Monday (16/9/2019).

Going forward, there are several catalysts for the stock market, including further interest rate cuts by Bank Indonesia, accelerated policy reforms by the government, improved data on economic activity, and corporate tax cuts, she stated.

Amidst the current low interest rates, Indonesian bonds are very attractive because they still provide high yields.

“The central bank’s commitment to safeguarding the Rupiah exchange rate and the bond market provides a positive sentiment for Indonesian bonds,” she said.

Turmoil and volatility in the financial markets are not uncommon, she said advising investors to always keep an eye on every development.

“Keep in mind that there are always opportunities in every condition, even amidst high global volatility. Do not be afraid to invest and adjust your investment portfolio, with targeted investment objectives and time frames,” she said. (INE). (cta)

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FINANCE

RUPIAH WEAKENS OVER CONCERN ABOUT GLOBAL RECESSION

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The Indonesian currency fell 18 points, or 0.13 percent, to close at Rp14.053 per US dollar compared to Rp14.035 earlier.

Greatindonesia.co.id, Jakarta – The rupiah weakened against the US dollar in the Jakarta interbank market on Tuesday evening over fears of a global economic recession.

The Indonesian currency fell 18 points, or 0.13 percent, to close at Rp14.053 per US dollar compared to Rp14.035 earlier.

“The market still has doubts about it and is waiting for certainty about the monetary policy from the meeting of the European Central Bank (ECB) that will be made known Thursday,” PT Garuda Berjangka President Director Ibrahim Assuaibi said in Jakarta Tuesday.

The ECB is expected to slash the deposit interest rate and offer stimulus including the buyback of bonds.

As reported earlier, factories in the European zone particularly Germany are struggling to withstand growth slowdown as a result of the US-China trade war. Hence, ECB President Mario Dragh will not remain silent from attempts to stabilize the European economy.

On the internal side, if the market remains volatile as a result of the trade war and Brexit, the central bank will again intervene in the market through a monetary policy mix to make the market attractive, Ibrahim believed.

“Looking ahead, BI (Bank Indonesia) and the government will continue to encourage the economy, take pre-emptive measures and be vigilant against the global condition and make a policy to facilitate foreign investment in the country,” he said.

The rupiah strengthened Rp14.030 against the US dollar Tuesday morning. Throughout the day, the rupiah hovered between Rp14.026 and Rp14.055. (ctr)

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