What were the important corporate news headlines from Indonesia on Friday 15 August 2014? Below Indonesia Investments presents the daily market roundup. This includes the following companies and topics: Indomarco Prismatama, Telekomunikasi Indonesia, Pan Brothers, Archipelago International, bonds auction, RPX Group, Mayora Indah, the Titab Dam project in Bali, Intiland Development, Agung Podomoro Land, Matahari Putra Prima, Berau Coal Energy, and Citra Marga Nusahpala Persada.

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The central bank of Indonesia (Bank Indonesia) announced today (08/08) that the country’s foreign exchange reserves increased to USD $110.5 billion at the end of July 2014 (from USD $107.7 billion at the end of the previous month). Bank Indonesia said that the rising reserves were mainly due to receipts from the Euro bonds issued by the Indonesian government and foreign exchange earnings from oil and gas exports. In addition, buoyant foreign capital inflows also had a positive impact on the accumulation of the official reserve assets.

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Indonesia's central bank (Bank Indonesia) said that it expects the Indonesian rupiah exchange rate to trade between IDR 11,600 and IDR 11,800 per US dollar throughout the fiscal year of 2014. Governor of Bank Indonesia Agus Martowardojo said that this assumption is based on pressures that originate from Indonesia's current account deficit. In 2013, the current account deficit hit USD $29.09 billion, or 3.33 percent of the country's gross domestic product (GDP). The current account balance has a major influence on the performance of a currency.

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After already having warned in April 2013 that Indonesian telecommunications operator Bakrie Telecom is likely to default on its debt and is in need to restructure its USD $380 million senior unsecured bonds due in May 2015, Fitch Ratings downgraded the company's long term foreign- and local currency issuer default rating to Restricted Default (RD) from C (highly vulnerable) on Friday (30/05). Bakrie Telecom (BTEL) is a subsidiary of the controversial and politically-linked Bakrie & Brothers holding company.

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According to Indonesian Finance Ministry’s State Bond Director Loto Srinaita Ginting, the government of Indonesia intends to issue more than USD $500 million worth of samurai bonds in the fourth quarter of 2014. Samurai bonds are yen-denominated bonds. However, Ginting provided no further details about the bonds issuance. The Finance Ministry also plans to issue IDR 20 trillion (USD $1.7 billion) worth of domestic retail bonds in September 2014 (but these bonds are only available to Indonesians).

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Indonesia’s Financial Services Authority (OJK) announced that it is studying the requests of seven Indonesian companies to conduct an initial public offering (IPO) on the Indonesia Stock Exchange in the first semester (January-June) of 2014. If the OJK grants permission to these requests, it means that 17 companies will have conducted an IPO on the Indonesia Stock Exchange (IDX) in the first half of 2014. In total, 30 new company listings are expected on the IDX in 2014.

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Express Transindo Utama, the second-largest taxi operator in Indonesia (after the Blue Bird Group), targets to raise IDR 1 trillion (USD $88 million) through the issuance of three- and five-year bonds in the months ahead. Proceeds of this issuance will be used to finance further business expansion of the company, which includes the purchase of new taxi units. President Director of Express Daniel Podiman said that BCA Sekuritas, Mandiri Sekuritas and Valbury Asia Securities were appointed to assist the debt sale.

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Indonesia's central bank (Bank Indonesia) said that the country's private debt has increased steadily in recent years. On the one hand this is a good sign as it indicates that the private sector is growing, but on the other hand the lender of last resort warned Indonesian companies to watch over their foreign loans as it can jeopardize the country’s financial stability. Private sector foreign debt doubled between 2009 and 2013, reaching USD $141.4 billion in January 2014. Meanwhile, public debt stood at the level of USD $127.9 billion in the same month.

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According to a recent survey of Schroder Investment Management Indonesia, subsidiary of the British multinational asset management firm and a leading independent international asset management and private banking group, Indonesian investors feel more confident to invest in Indonesia in 2014. Director of Schroder Indonesia Michael Tjoajadi stated that confidence of Indonesian investors has increased due to improving economic conditions and the long-term prospects of Southeast Asia's largest economy.

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Foreign debt of Indonesia totaled USD $264 billion per December 2013. Based on data from Statistics Indonesia, 46.8 percent of this total debt was accounted for by the public sector, while the remaining 53.2 percent was private sector debt. On a year-on-year (yoy) basis, growth of Indonesia’s total debt slowed to 4.06 percent in the last month of 2013. One year earlier this growth was significantly higher at 12.0 percent. Indonesia’s level of foreign debt is still safe at 30.2 percent of GDP in the fourth quarter of 2013.

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Indonesian food company Tiga Pilar Sejahtera, a market leader in the country’s dry vermicelli and dry noodles segments, considers to acquire two food companies in Malaysia and Vietnam in a move to expand business beyond the Indonesian borders. Sjambiri Lioe, Finance Director at Tiga Pilar Sejahtera, said that the company (which is listed under ticker symbol AISA) has set aside a total of USD $80 million for this acquisition. He refrained from mentioning the names of the targeted Asian companies.

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In an attempt to strengthen the domestic investor base and to meet financing of the Revised 2014 State Budget (APBN-P 2014), the government offers Indonesian Retail Government Bonds (Obligasi Negara Ritel Indonesia, abbreviated ORI) again. This is the 11th time, the government issues ORI bonds since its first launch in 2006. The ORI series ORI011 is offered in the period 1-16 October 2014 with a coupon rate of 8.5 percent and a tenor of three years. The minimum allowed order is IDR 5 million and the maximum IDR 3 billion per individual.

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US Federal Reserve Chairwoman Janet Yellen reminded global investors to prepare for a sooner-than-expected US interest rate hike (Fed Funds Rate, FFR) provided that the economy of the USA - the world’s largest economy - continues its improving trend. In fact, speculation has emerged that the FFR will be raised before the end of 2014 although Yellen stated more than once that the ‘close-to-zero’ interest rate environment would be maintained for a considerable period after the US bond-buying program (quantitative easing) has ended.

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The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) ended at a record high on Wednesday (03/09) as market sentiments were positive after the Indonesian government raised USD $1.5 billion from 10-year dollar-denominated Islamic bonds (known as sukuk) on Tuesday (02/09). Foreign investors submitted USD $10 billion worth of bids, six times the amount offered, showing that they are confident about the country’s current and future economic prospects.

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The Indonesian rupiah exchange rate depreciated slightly on Thursday (03/07). The US dollar gained as markets reacted to Wednesday’s ADP nonfarm payrolls report which showed that 281,000 jobs were added in the US private sector in June 2014, thus exceeding expectations. Furthermore, the market is optimistic that US employment data, released later today, will be positive too. According to the Bloomberg Dollar Index, the currency of Indonesia depreciated 0.04 percent to IDR 11,918 per US dollar.

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The Indonesia rupiah exchange rate depreciated 0.16 percent to IDR 11,992 per US dollar on Monday (23/06) according to the Bloomberg Dollar Index, thus extending the currency’s recent depreciating trend. Meanwhile, Bank Indonesia's benchmark rupiah rate (known as the Jakarta Interbank Spot Dollar Rate, or, abbreviated JISDOR) depreciated 0.03 percent to IDR 11,971 against the greenback. What were the factors that influenced the rupiah’s performance today?

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The Indonesian rupiah exchange rate depreciated 0.62 percent to IDR 11,893 per US dollar on Tuesday (17/06), a four-month low. The main reason behind this poor performance is increased concern about the impact of violence in northern Iraq - namely higher global oil prices - on Indonesia’s trade and budget deficits as Indonesia subsidises a significant amount of domestic fuels). As oil and gas imports accounted for about 23 percent of total imports of Indonesia in April 2014.

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The Indonesian rupiah exchange rate is heading for its biggest weekly decline since the second week of December 2013. According to the Bloomberg Dollar Index, the currency of Southeast Asia's largest economy had depreciated 0.36 percent to IDR 11,572 per US dollar by 2.30pm local Jakarta time on Friday (23/05). However, year to date, the rupiah is still among the best performing Asian emerging currencies against the greenback (+5.19 percent). What are the reasons that explain the rupiah's weak performance this week?

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While most emerging Asian currencies fell, the Indonesian rupiah exchange rate appreciated 0.08 percent to IDR 11,523 per US dollar based on the Bloomberg Dollar Index on Monday (12/05). The depreciating Chinese yuan, after its central bank set the midrate at its lowest level in eight months, put pressure on other Asian currencies. Today, Indonesia's Finance Ministry sold IDR 10 trillion rupiah (USD $867 million) of bonds, higher than the indicative target of IDR 8 trillion rupiah. Meanwhile, Indonesia’s two-year bonds gained.

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Fitch Ratings, one of the three major global credit rating agencies, said that its latest annual survey on economic prospects and the business climate in Indonesia indicates an optimistic view. Respondents in the survey, mostly CEOs and Division Heads at financial institutions, companies, government and media, were asked 11 questions about the Indonesian economy, reformation and prospects for the next five years. Andrew Steel, Managing Director Head of Asia Pacific Corporate Ratings Group, presented results of the survey.

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