RI ‘the most confident country’ in facing crisis

JAKARTA | Fri, 04/24/2009 11:09 AM | Business

Indonesia boasts the highest consumer confidence index in the world, a survey by the Nielsen Company shows, effectively brushing off any threat to economic activities here from the global economic crisis.

The survey, revealed Thursday, showed Indonesia topped Nielsen’s global consumer confidence index with 104 points, followed by Denmark (102 points) and India (99 points).

The lowest score goes to Korea and Portugal, with 31 and 48 index points, respectively.

“Indonesia is the most confident country in facing the global crisis,” the Nielsen executive director of customer research, Catherine Eddy, said during the announcement of the survey.

The latest biannual Nielsen Consumer Confidence survey, conducted between March 19 and April 2 and involving interviews with 25,140 regular Internet respondents from 50 countries, showed that global consumer confidence had plummeted to a new record low in the past six months.

The index fell 7 points, down from 84 to 77, according to the latest survey.

“We interviewed Internet users, whom most of whom are well-educated and have middle- to upper-income jobs,” Eddy said.

“We found most Indonesian respondents were highly optimistic in facing the crisis.”

She added 86 percent of 533 Indonesian respondents were very optimistic with local job prospects within the next 12 months, while only 9 percent felt uncertain with their job security.

“Indonesians also perceive they can keep buying the things they want and need, even during the global crisis,” Eddy said.

“Indonesians are also confident with their personal finances in the years ahead.”

The survey revealed 70 percent of Indonesians were optimistic with regard to financial stability.

Despite the optimism, the survey also showed that Indonesians tended to save their money rather than spend it during the crisis.

“Our survey discovered 67 percent of Indonesian respondents put their cash into savings,” Eddy pointed out.

She added the respondents were not holding back entirely from spending.

They also still spent their money for good bargains.

“They like to spend their money for certain materials, which would benefit some companies during the economic crisis,” she said.

The survey showed 29 percent of Indonesians liked to spend their money on new technology products, while 25 percent spent money on holidays

Twenty percent spent money on outdoor entertainment, 17 percent on house redecorating, and 44 percent on investment in shares or stocks.

“Actually there was a significant drop in the investment sector,” Eddy said.

“In the second half of 2008, 50 percent of the Indonesians interviewed invested their money in stock funds.”

She added the global crisis had already influenced Indonesians to be more careful in investing.
“Surprisingly, the demand to purchase new clothes is still similar to that in the second half of 2008 and first half of 2009,” she said.

Manchester United Edge Arsenal In Champions League

Manchester United 1-0 Arsenal

Apr 29, 2009 4:35:59 PM

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CL: John O'Shea, Manchester United v Arsenal (PA)

Manchester United and Arsenal met for the first time in European competition in a entertaining game at Old Trafford which ended with the home side gaining a narrow advantage to take into the second leg.

The holders began the game in impressive style and had Arsenal on the back front from the off as they poured forward with real pace and verve.

Wayne Rooney was the man who went closest in the opening minutes, sending a looping header back across goal, albeit with the help of a deflection, which Manuel Almunia did superbly to scramble away.

Less than a minute later and a slip in the penalty area by Kieran Gibbs could have proved costly for the Gunners.

Cristiano Ronaldo picked up the loose ball and drilled in a low cross but, unfortunately for United, there was no-one on hand to poke the ball home.

Carlos Tevez, preferred to Dimitar Berbatov in attack, was the next to get in on the act, teeing up Ronaldo for a shot which the Portuguese international fired straight at Almunia.

Yet United were in full flow and continued to create chances, seemingly at will, against an Arsenal side powerless to prevent the red tide.

With just over 15 minutes gone Ronaldo and Tevez combined well to send John O’Shea out wide.

The utility man curled in a superb cross for Tevez to head home but the striker’s effort was too close to Almunia who saved brilliantly.

Yet it was to prove only a temporary reprieve, as from the resulting corner Sir Alex Ferguson’s men grabbed the goal their opening salvo had threatened.

A long corner was picked up at the far post by Michael Carrick who returned the ball across goal and found O’Shea who thrashed the opener into the roof of the net.

The goal roused the Gunners somewhat, but it took until almost the half-hour mark before Arsene Wenger’s men carved out a decent opportunity.

Theo Walcott was the man to initiate matters, cutting inside from the right and playing in Emmanuel Adebayor who set it back to Cesc Fabregas who fired low but straight at Van der Sar.

It was to be the Arsenal’s best chance of the half and the visitors also had Almunia to thank after he pulled off another superb save on the half-hour mark.

Some good work from Tevez down the right saw the Argentinean cross for Ronaldo who looked destined to score but could only watch

in agony as Almunia saved his point-blank header.

As the half progressed the visitors manage to gain a foot-hold in the match but despite enjoying some decent possession at times, they struggled to create any clear-cut openings and will have been relieved to have gone in at the break just one goal down.

The second-half began more evenly with both sides threatening yet failed to trouble either goalkeeper.

In fact, it took until just over the hour mark before either side had clear sight of goal.

The chance fell to the Gunners with Adebayor taking a long ball and beating Rio Ferdinand before lashing a shot well over the bar.

With a second goal not forthcoming for his side, Ferguson opted to changes things sending on Ryan Giggs and Dimitar Berbatov for Anderson and Tevez.

And within minutes of the substitutions, the Red Devils very nearly did double their lead after Ronaldo struck the crossbar with a thunderous shot from range.

United continued to press with Carrick going close with a low shot before Giggs did find the back of the net, only to be denied a goal on his 800th appearance by an offside flag.

With time ticking away Arsenal could have grabbed an equaliser, substitute Nicklas Bendtner heading a free-kick high and wide but ultimately neither team could add to O’Shea’s strike leaving the tie intriguingly poised.

Manchester United: Van der Sar; O'Shea, Ferdinand (Evans, 87), Vidic, Evra; Fletcher, Carrick, Anderson (Giggs, 67); Ronaldo, Tevez (Berbatov, 67), Rooney.

Arsenal: Almunia; Sagna, Toure, Silvestre, Gibbs; Diaby, Song; Walcott (Bendtner, 71), Fabregas, Nasri; Adebayor (Eduardo, 83).

GOAL

1-0 Manchester United (O’Shea, 17)

'Black Tuesday' as stocks, rupiah plunge

The Indonesian Composite Index slumped Tuesday to its lowest level in 17 months as investors pulled out their money over jitters that lower global commodity prices could slash economic growth.

The commodity-heavy Index dropped by 3.9 percent to 1,958.75 -- the first time it fell below the 2,000 mark since April 23, 2007.

Resources-based companies dragged down the Index after crude oil sank further to its lowest level since April, bringing down prices of other commodities, including coal and crude palm oil (CPO).

PT Bumi Resources, Indonesia's largest coal producer, led the slump after retreating by 10 percent to Rp 3,950. PT Astra Agro Lestari, the biggest publicly traded CPO company, dropped by 11 percent to Rp 14,250 -- its lowest level since August 2007.

HD Capital analyst Adrian Rusmana said the slump was mostly triggered by fears the economy would grow sluggishly this year as declining commodity prices erode export revenue.

Indonesia, Southeast Asia's largest economy, has projected economic growth of 6 to 6.4 percent this year.

"Last week, the BPS (Central Statistics Agency) reported that we're suffering a trade deficit because our imports exceed our exports. The condition will deteriorate if commodity prices continue to fall," he said.

Bloomberg reported that palm oil fell by as much as 5 percent, to 2,346 ringgit ($681) a ton, in Malaysia on concerns that declining oil prices would ease demand for biofuels. The price was above $800 a month ago.

Oil prices slumped to $101 a barrel on Tuesday, as reported by AFP, as the market awaited oil cartel OPEC's decision on whether it would cut output.

"The market responded to falling oil prices," Danareksa Research Institute chief researcher Purbaya Yudhi Sadewa said.

The rupiah also plunged, falling to Rp 9,355 against the U.S. dollar, from Rp 9,284 on Monday, over fears investors would continue pulling most of their "hot money" out of the stock and bond market.

In response to the turmoil, central bank deputy governor Hartadi A. Sarwono said the decline was part of the supply and demand mechanism.

"The rupiah's exchange rate (against the dollar) in the free-floating system is determined by supply and demand. Bank Indonesia will enter the market to prevent extreme volatility," he said.

On Monday, BI governor Boediono said the central bank would be ready with "ammunition" to keep the exchange rate at an acceptable level.

Boediono said he believed money would always look for a better place to grow, saying investors would shift their funds to options offering higher returns.

IDX suspends Trimegah

The IDX has sanctioned Trimegah, for causing technical glitches in Thursday's trading, but the market authority says it was not a big problem.

"Why make such a fuss about it. It is not something new in the world....It is purely a human error," The Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) chairman Fuad Rachmany said on Friday.

He referred to a similar incident that recently hit the Malaysia Stock Exchange, whose trading system went down only one month after introducing a new electronic trading system.

The Indonesia Stock Exchange (IDX) halted the second trading session of the day for one hour on Thursday because the new computer system had been overwhelmed by orders booked by PT Trimegah Sekuritas, one of the largest securities companies in the exchange.

Trimegah had said that the overwhelming volume of orders had been caused by an error in its electronic remote trading system.

The incident occurred despite the fact that the IDX had just updated its trading system, dubbed JATS Next Generation worth Rp 45 billion (US$4 million). This system was claimed to have four times more capacity to receive transactions than the system it replaced.

IDX management denied that the new system had problems, passing the blame onto Trimegah.

On Friday, IDX imposed a one-day suspension on Trimegah.

IDX director for listing Eddy Sugito said that his office was considering imposing further sanctions against the company.

"We haven't decided *the further sanctions*. We need to await an audit result," Eddy said.

Bapepam chairman said he would leave the decisions related to the sanctions to the IDX authority.

"It is up to IDX, it is technical matter, they *IDX* know better," said Fuad.

Fuad also brushed aside rumors that the Trimegah suspension related to the heating up of competition between candidates in the upcoming election for new IDX directors.

"No, it's just rumors. It is not true," Fuad said.

IDX is scheduled to replace the existing directors during its annual shareholders' meeting in June.

A number of people have announced their candidacy, including the president commissioner of PT Bahana Sekuritas, Ito Warsito, who secured strong backing from the government and the current IDX management.

It is reported that Trimegah is one of the securities houses that will not vote for Ito, because the company has its own candidate.

Under the existing regulations, IDX directors are those who secure the most votes from securities houses.

Securities houses whose trading is suspended or with trading values less than 0.2 percent of annual trades, cannot nominate candidates.

Meanwhile the IDX strategy is to avoid another similar problem in the trading system. The pre-sident director Erry Firmansyah said that IDX would adjust its system and would try the new system again late Friday in the hopes that it can be running for Monday's trading.

PLN proposes to swap dollar loans for China's Yuan

State power firm PT PLN will propose to swap its dollar-denominated loans from Chinese banks to yuan to help reduce foreign exchange costs.

The loans to be renegotiated are part of the company's loans to finance its ambitious 10,000 megawatt electricity project, PLN's president director Fahmi Mochtar said on Friday.

Chinese banks have so far signed financing commitments for a total of US$1.47 billion, most of which will be used to pay Chinese suppliers and contractors.

If the swap proposal goes ahead, PLN will get the loans in yuan and also pay its Chinese partners in yuan.

"From tenders we have held, many of the winners are from China. But, the contracts were made in US dollars. The Finance Ministry has suggested to us to directly use China's own currency, the Yuan, instead of dollars to avoid (burdens from) double currencies," Fahmi said.

The 10,000 megawatt project needs a total of Rp 19.2 trillion and US$4.8 million. Of these required funds, PLN has so far secured Rp 18.8 trillion and $2.18 million.

"We need to sit together with Chinese banks to discuss this further," Fahmi added.

PLN's plan to renegotiate the loans came after Finance Ministry Sri Mulyani Indrawati urged the company to utilize a recent bilateral currency swap agreement signed between Indonesia and China.

The two countries have recently agreed to swap Rp 175 trillion or 100 billion yuan (about $15 billion) to lessen exposure to the US dollar, according to the cental bank.

"All this time, PLN converts rupiah into dollars to purchase capital goods, all of them are from China. It is not efficient as we have a bilateral swap arrangement (BSA) with China," Finance Minister Sri Mulyani Indrawati said Friday.

"I ask PLN directors to sit (and talk) again with Chinese creditors to re-discuss their agreement. It will reduce the exposure (of rupiah to dollar)," said Mulyani.

Rupiah depreciation increased PLN's net losses from Rp 5.60 trillion in 2007 to Rp 12.3 trillion in 2008. Foreign exchange losses contributed about Rp 9.3 trillion to last year's net losses, the company announced last week.

PLN's finance director Setio Anggoro Dewo said the net losses were not actual cash losses to PLN, because its foreign-denominated loans are not yet mature.

PLN is now looking for banks to assist the company with debt hedging arangements.

The 10,000 MW program covers the construction of 35 power plants, 10 of them in Java and Bali, with 25 located off the two main islands.

So far contracts for 32 power plants have been signed, and most of these have now reached the construction phase.

About 7,000 megawatts are scheduled to start operating in 2010, while the remaining 3,000 megawatts are delayed until 2011 and 2012.

To anticipate increasing electricity demand, the government has been also been preparing a second 10,000 MW accelerated program, part of which will be directly PLN's responsibility, while the rest will be financed and managed by independent power producers (IPPs).

Disappointed Golkar opts to leave SBY's Democrats

The Golkar Party has dealt President Susilo Bambang Yudhoyono's bid to form an effective government for the coming five years a major blow as coalition talks between the two collapsed.

The split looks set to deepen the crisis of unity within Golkar ahead of its meeting of executives Thursday, as some party leaders say the decision to terminate the coalition with Yudhoyono's Democratic Party represented the wish of Golkar's central board of executives only.

Golkar secretary-general Sumarsono told a media conference the party executives granted chairman Jusuf Kalla, who is the incumbent Vice President, full authority to build communication with any potential allies it needs to win the presidential election on July 8.

“After almost a week of intensive political communications about the continuation of the Yudhoyono–Kalla duo, we failed to reach an agreement to form a coalition,” Sumarsono said.

A meeting of the party’s executive members, attended by Kalla, decided to search for a new alliance to compete in the presidential election.

“The meeting also gives a full mandate to Golkar chairman [Kalla] to open political communications with other parties to build a strong and effective government,” he said.

During the negotiations, Golkar was represented by Soemarsono, Muladi and Burhanuddin Napitulu, while the Democratic Party was represented by six members including its chairman Hadi Utomo, Anas Urbaningrum, Ruhut Sitompul and Marzuki Alie.

Golkar executive Syamsul Muarif acknowledged that Golkar had proposed a single candidate to Yudhoyono’s team, saying it was Golkar policy made last year.

“We can’t propose more than one name for a running mate because it was mandated at a leaders meeting in 2008 to propose one name from Golkar,” he said.

“But Ruhut said we could not dictate 'the owner' [Yudhoyono] of the coalition by proposing a single hopeful,” he said.

Yudhoyono hopes to form an effective government by forming a coalition with other parties that secure a significant amount of seats in the House of Representatives.

The Democratic Party expressed shock in response to Golkar's exit, as teams of negotiators for the two parties had agreed on most points of a coalition agreement draft, except for who would be Yudhoyono's partner.

In a press conference held at Yudhoyono's private residence in Cikeas, Anas said the Democratic Party respected Golkar's political rights. "But we are still open to future cooperation in any kind of forms with other parties, including Golkar," he added.

Party chairman Hadi explained that while Yudhoyono wanted Golkar to name more than one vice presidential candidate, Golkar had insisted on naming a single hopeful.

In Makassar, Kalla's hometown, supporters of his presidential bid blamed Yudhoyono for the collapse of the coalition talks.

The group, comprising businesspeople, students and community figures, said Yudhoyono had failed to uphold equality in building the coalition.

Golkar looks the other way

Coming out beaming from the Golkar Party's leaders' meeting, chairman and new presidential candidate Jusuf Kalla immediately headed for evening talks with his main potential ally — the PDI-P.

As of late Thursday, however, there was no knowing whether the July presidential election would be a two- or three-horse race, as Kalla and the leaders of the Indonesian Democratic Party of Struggle (PDI-P) only said Kalla and PDI-P chairwoman Megawati Soekarnoputri would meet in private on Friday.

While the Golkar leaders' meeting decided to nominate Kalla for president, the PDI-P has endorsed Megawati for president.

The two will spend “quality time so they can discuss the nation's priorities” on Friday, said Megawati’s husband and the PDI-P’s main adviser, Taufik Kiemas, after meeting with Kalla at the latter’s residence.

The Golkar leaders’ meeting, amid several dissenting opinions, decided to name Kalla its presidential candidate, following collapsed talks with the President Susilo Bambang Yudhoyono’s (SBY) Democratic Party.

Kalla said the meeting with the PDI-P had led to preliminary yet significant results regarding Golkar’s plan to ally with the PDI-P.

“This meeting is aimed at consulting each other’s interests to face the presidential election,” he said.

News of Golkar’s split from the Democratic Party sent jitters through the business community.

The Democratic Party is leading in ongoing nationwide tallies from the legislative elections.

On Thursday, a grinning Taufik Kiemas said the meeting with Kalla was conducted “in a good mood”.

“We’re glad to announce that right now both parties’ chairpersons are ready to hold more serious discussions on building a solid coordination in facing the country’s problems,”
he said.

Kiemas led the PDI-P’s top brass meeting at Kalla’s house, including his daughter Puan Maharani, secretary-general Pramono Anung and presidential campaign team head Theo Syafei.

A source in the PDI-P warned the party's support of Megawati’s presidential bid was “non-negotiable”.

“So if Golkar insists on naming Kalla their presidential candidate, it could spark protest from our grassroots,” he said.

With Golkar and the Democratic Party split, Islamic and nationalist parties trailing in the polls have boosted their bargaining position.

Joko Susilo, a leader of the National Mandate Party (PAN), said Golkar “is out of our radar”, adding most members wanted the PAN to team up with SBY’s party.

The Prosperous Justice Party (PKS), currently with about 7.8 percent of votes, said it had intensified talks with the Democratic Party.

“But we’re still open for coalition talks with all parties, including Golkar, before the final say on April 26th [when the PKS holds its national meeting],” party member Mahfud Siddiq said.