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While domestic cement demand remains bleak, Indonesia's cement producers managed to raise their level of production capacity utilization due to a surge in exports. However, export growth will only slightly improve the structural oversupply situation in Indonesia's cement market. With installed annual production capacity estimated at 103.8 million tons of cement, nearly 40 million tons of capacity remains unused.
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Thomas Lembong, Head of Indonesia's Investment Coordinating Board (BKPM), said the 5.01 percent year-on-year (y/y) economic growth pace of Indonesia in the second quarter of 2017 was rather disappointing as consumption remained bleak. Only Indonesia's export and investment realization showed an improvement, Lembong added. But, overall, Indonesia's economic growth stagnated.
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Data and Internet services are now the big engine of growth for the corporate earnings of Indonesia's listed telecommunication and network providers. However, there is only one of such companies that showed great net profit growth in the first half of 2017, to wit Telekomunikasi Indonesia (Telkom). Therefore, Telkom is expected to have raised its market share in the mobile phone market of Indonesia this year.
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Indonesian tobacco manufacturers continue to face big challenges this year amid fierce competition for market share and rising taxes (as well as other government measures that have been implemented with the aim to curb cigarette consumption, for example the setting of limits to advertisement content). Therefore, the corporate earnings of Indonesia's listed cigarette producers is expected to remain under pressure for the remainder of 2017.
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