Riffrag Business & Finance Report

JAKARTA – PT Bank Mandiri Tbk (BMRI) fully supports the palm oil sector National and derivatives industry by providing financing facilities to Rp35 trillion in October 2009 until the end. This figure grew 16 percent compared to the same period in 2008 and reached the 75 per cent of the total plantation sector financing portfolio at the Bank Mandiri.

Director of Corporate Banking Bank Mandiri Riswinandi said the palm oil sector financing of Bank Mandiri thus increasing the portfolio as of October 2009 reached Rp 35 trillion with a low NPL rate of under one percent.

“Business CPO did have a very tough challenge, let alone the industry still relies on export markets, especially the many obstacles in implementing the European Union environmental standards. However, we believe the prospects for the development of Indonesian palm oil industry will continue to grow well because we have to recognize the characteristics this business in a long time, “Riswinandi says, in a written statement received Legal, here on Friday (3/12/009).

Therefore, Bank Mandiri is present in the Indonesian Palm Oil Conference and Price Outlook 2010 is organized by GAPKI (Palm Indonesia) in Bali, as a form of full support in this sector. Chairman of GAPKI (Indonesian Palm Oil) Joefly J. Bahroeny said that such support by Bank Mandiri to these sectors is needed especially when some doubt on the part of stakeholder, banks, financial institutions and regulators that led to the perception that this sector is no longer prospective.

Bank Mandiri conviction can not be separated from the long history of financing oil palm plantations which started from 4 Legacy Bank eventually merged into Bank Independent. Moment-owned banks, state governments are always involved in a variety of financing schemes such as the PIR program TRANS, KKPA PIR, PBSN first, second, third, until the program currently underway KPEN which-RP. The long experience of Bank Mandiri is made to understand the characteristics of this business, and preparing financial products and other products that suit the needs of this sector.

In 2008 the experience of Bank Mandiri in channeling financing to this sector, are tested. CPO prices could then rise up to USD1395 per ton due to rush current global liquidity impact on commodity markets and financial markets. However, CPO prices corrected and then declined sharply until it reaches the lowest point of USD435 per ton in October 2008 in line with the global crisis and a drop in world oil prices.

Industry financing models that use palm Bank Mandiri be a contributing factor to the growing portfolio of low NPL rate. Business financing model is supported by regular review of the oil palm industry through research both internally and with external parties who are competent, covering all aspects of both micro and macro that is always obtained the information up-to-date. In addition, the financing structure that is prepared in accordance with the characteristics of the financing needs of oil palm, so that the current Bank Mandiri worthy of being the primary option for financing palm oil.

Bank Mandiri rate of oil palm has the advantage over similar commodities such as vegetable oils, soyabean, rapeseed, and canola oil production especially in a year on each hectare of land. In addition, the use of palm oil is not only as food but also fuel the consideration of factors that make demand will continue to grow into the future.

Related to environmental and social issues, the bank always consider these aspects in any financial analysis such as compliance with government regulations, the legality of a clear land and the social conditions of communities around the garden. Bank Mandiri also important at oil palm plantation developments are sustainable (sustainable) and will continue to support government programs such as forest reservations, plasma program, and CSR in oil palm sector.

KUALA LUMPUR – Malaysia’s prime minister unveiled a Raft of measures on Tuesday to boost investment in the slumping economy, coming close to ending an affirmative action program for ethnic Malays that critics say has stymied growth.

Najib Razak told a conference in Kuala Lumpur that his government would end rules on foreign investment in most sectors of the economy and would open up the investment management and brokerage industry, as well as property, ending requirements for 30 percent ownership by ethnic Malays.

He also promised Reforms of Malaysia’s huge government companies such as plantations and property giant Sime Darby, and said they would be forced to sell non-core assets to boost domestic competition in the Southeast Asian nation.

“We have become a successful middle-income economy, but we can not and will not be caught in the middle income country trap,” Najib told the conference.

“We need to make the shift to a high-income economy or we risk losing growth momentum in our economies and vibrancy in our markets.”

The Reforms gave the ringgit a small boost and it traded at 3521 to the dollar at 0500 GMT, up from 3:54 at the open, although the data released later showed foreign investors had continued to pull money out of Malaysia this year.

Malaysia is Asia’s third most export-dependent nation, seeing shipment slump 26 percent from a year ago as demand for electronics and commodities has been hit by the global downturn. The economy has shrunk 5 percent this year.

Investment flows have dried up and the country has been overtaken by neighbouring Thailand in terms of direct investment since 2001 and the portfolio flows turned negative to the tune of 92.3 billion Malaysian ringgit ($ 26.10 billion) in 2008.

In the first quarter of 2009 they remained negative to the tune of 12.2 billion ringgit, even as investment in other emerging Asian economies has recovered. Malaysia’s stock market has risen 20 percent this year, underperforming a 30 percent rise in Asian markets excluding Japan.

‘This move will definitely encourage investors to rethink or reconsider Malaysia amid the many choices (in The region) such as Thailand, Vietnam, and Indonesia, “said Wan Suhaimie Wan Saidie, economist at Malaysia’s Kenanga investment bank.

JAKARTA – the world economic recovery in 2010 will also affect the growth of domestic investment that is expected to grow by 4.1 percent. However, predictions of growth rate of investment portfolio and direct investment would be different.

For the investment portfolio will be relatively high growth does not differ greatly with the year 2009. However, for direct investment, although the election has passed, the economic situation globally and in countries still be vulnerable in 2010, “said Hendri Saparini Econit economist, in a book Econit Economic Outlook 2010 Legal quoted, in Jakarta, Saturday (16/1/2010 ).

On the other hand, already since the last five years there was no significant improvement in the investment climate so that the predicted foreign investors would return choose to hold direct investment. Last year foreign investment (FDI) it will experience negative growth of 28 percent while domestic investment (PMDN) will remain positive.

“2010 investment barriers are quite a lot. In addition to infrastructure facilities are not adequate, nor legal certainty and corruption that resulted in a high cost economy, “he added.

Entering the year 2010, the government of SBY very confident, that positive growth is the achievement of government in managing the economy. So that will be a big capital to promote economic growth in 2010. Even the mention of economic growth in 2010 is not only encouraged but also private consumption growth of investment.

Thus, optimism for the targets will be achieved based on the strategy of ministers in the United Indonesia Cabinet II to eliminate the problem of investment barriers in Indonesia.

The government hopes the publication of yen-denominated government bonds (Samurai bonds) of U.S. $ 750 million-US $ 1 billion to guarantee Japan Bank for International Cooperation (JBIC) can be done in semester I/2010.

Coordinating Minister Hatta Rajasa said the government was doing discussions with Japan about when samurai bond issuance was. “We hope soon. Discussion has begun. If we expect the semester I/2010 done,” he said today.

According to him, the Japanese government is very concerned the development of economic corridors in Indonesia so that the samurai bond issuance can be realized.

“In a conversation yesterday, including my conversation with Naoshima [Minister of Industry of Japan], there is the desire of Japan to develop the economic corridor that is felt is an important component of infrastructure to encourage investment,” he said.

Hatta said earlier that granting warrants for the issuance of Samurai bonds is one form of cooperation Indonesia-Japan. Issuance of this year will be a continuation of the utilization of JBIC’s guarantee facility emissions last year after U.S. $ 350 million.

Finance Minister Sri Mulyani Indrawati himself argued the agenda for the Samurai bond issue this year has become government consideration. The amount must be adjusted to the 2010 state budget financing needs that can still change.

Government use of the Samurai bond issuance guarantee facility of JBIC for the Japanese development bank is rated AAA. The total value of the guarantee provided the Government of Japan through JBIC is U.S. $ 1.5 billion.