[Kabar-indonesia] 19 Biz/Econ Reports: US$359m Farm Subsidy; Japan Rate Hike; Telkom; Daihatsu

[JoyoNews at aol.com]

19 RI Biz/Econ Reports:

- Indonesia provides US$359.2 mln
  subsidy for farmers
- Indonesia June consumer confidence 
  index rises to 10-mth high of 91.1 pts
- Bank Indonesia sees little impact from
  expected Japan rate hike
- Bank Indonesia awards 24.63 trln 1-mth
  SBIs at fixed rate 12.25 pct
- Daihatsu Indonesia sees 2006 sales
  down 32 pct
- Indonesia govt postpones 2 trln rupiah
  retail bond issue to Aug 9
- Dubai Islamic Bank explores investment
  prospects in Indonesia
- Indonesia's Telkomsel targets to have 
  35 mln subscribers by yr end
- Indonesia's Indosat expects 4 mln new
  subscribers
- Indonesia offers 1.3 mln Ha for logging, 
  timber plantations
- Indonesia Astra Daihatsu Launches New
  Compact Van Models
- Indonesia's Palazzo to build 15,000 
  housing units in Jakarta
- Indonesia's Pudjiadi builds property 
  projects worth US$83.3mln
- update: Indonesia offers incentives 
  to boost investment in chemicals sector
- Indonesia's Enseval prepays 12 mln usd
  syndicated loan
- Indonesia's Astra Agro H1 CPO output 
  470,718 tons, up 13.9 pct yr-on-yr
- Indonesia palm oil firmer on rupiah,
  buyers return
- Asia Rubber-Tokyo nudged higher on
  supply concerns
- Separate FTAs undermine Asean spirit:
  Malaysian Institute

Indonesia provides US$359.2 mln subsidy for farmers

JAKARTA, July 12 (Asia Pulse/Antara) - The Agriculture Ministry has
allocated Rp3.25 trillion (US$359.2 million) in subsidy for farmers
and livestock breeders in 2007, Agriculture Minister Anton Apriyantono
said here Tuesday.

Some Rp1.75 trillion of the subsidy will be used for the procurement
of paddy, corn and soybean seeds at below market prices, and
subsidized seeds will be distributed through farmer groups, he said.

A price discount coupon or voucher will be distributed to each farmer
group for the purchase of subsidized seeds from retailers who sell
labeled seeds of certain food crops, so the quality of the seeds is
guaranteed.

This kind of distribution system ensures that the farmers will receive
low-priced and certified seeds of high quality, which will increase
the output and productivity of their farmland, Anton said.

Concerning the subsidy for livestock breeders, the minister said it
will lower the interest rate on the financial assistance to only 10
percent of the prevailing bank rates.

Anton guaranteed that the allocation of Rp3.25 trillion subsidy
derived from the State Budget for the farmers and livestock breeders
in 2007 will not disrupt the implementation of development programs in
other agricultural sectors.

The Rp3.25 trillion subsidy is very small compared to the Rp8.2
trillion budget to be earmarked for the agricultural sector in 2007,
the minister said.

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Indonesia June consumer confidence 
index rises to 10-mth high of 91.1 pts

JAKARTA, July 12 (XFN-ASIA) - The consumer confidence index rose to a
10-month high of 91.1 points in June from 88.2 in May amid
improvements in both the current economic condition index and the
consumers expectation index, a Bank Indonesia (BI) survey said.

However, the June index level still falls short of the minimum 100
point-mark indicating optimism among the respondents.

According to survey results, the current economic condition index
surged to 76.8 points in June from 74.1 in May while the consumers
expectation index, which measures the level of confidence on the
prospects of the economy in the next six months, rose to 105.4 points
from 102.2.

It said 35.4 pct of the respondents in June compared to 32.5 pct in
the previous month expected their income to be higher in the next six
months on expectations of salary or bonus increases, better business
output or the opening of a new business.

Meanwhile, 55.4 pct of respondents expected their income to be stable
in the next six months and were therefore planning to reduce
consumption of primary goods and cut spending on recreation.

On the general trend of prices, 66.7 pct of the respondents expected
inflation to persist until the yearend mainly due to price rises in
housing and transport, prepared foods, soft drinks, cigarette and
tobacco.

On the interest rate trend, 60.1 pct of the consumers expected a
stable interest rate for the next six months.

As in the previous month, 57.5 pct of respondents held the view that
now was not the appropriate time to buy durable goods. However, the
survey indicated that 14.7 pct of consumers still planned to buy
motorcycles, 13 pct to buy computers and 11.2 pct to buy television
sets.

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Bank Indonesia sees little impact from expected Japan rate hike

JAKARTA, July 12 (XFN-ASIA) - Bank Indonesia (BI) sees the
widely-expected rate hike in Japan this week having little impact on
local financial markets because such a move, if taken, would be in
line with the global interest rate trend, BI deputy governor Hartadi
Sarwono said.

Analysts are expecting the Bank of Japan (BoJ) to announce a quarter
percentage point increase in its key interest rate at the end of its
two-day policy meeting on Friday, which would mark the end of its
longstanding zero-rate policy.

"The impact will not be significant because raising the interest rate
is not an action exclusive to the BOJ. The US Federal Reserve has also
raised its key rates," Sarwono told reporters at the parliament.

But he conceded that if the BOJ does raise its key rate, Bank
Indonesia may need to reevaluate its policy as well.

He added that a BoJ rate hike would only have a minimal impact on
Indonesia's debt repayment requirements to Japan.

Bank Indonesia cut its key policy rate, called the BI rate, by 25
basis points to 12.25 pct last week.

Industry analysts believe that despite the rate cut, the rupiah rate
remains attractive even with the prospect of the US raising its rates
in coming months.

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Bank Indonesia awards 24.63 trln 1-mth SBIs at fixed rate 12.25 pct

JAKARTA, July 12 (XFN-ASIA) - Bank Indonesia has awarded 24.63 trln
rupiah one-month Bank Indonesia Certificates (SBI) at a fixed interest
rate of 12.25 pct.

The SBI rate is pegged to the central bank's key policy rate, the BI
rate, which was cut by 25 basis points from 12.50 pct last week.

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Daihatsu Indonesia sees 2006 sales down 32 pct

JAKARTA, July 12 (Reuters) - Japan's Daihatsu Motor Co. sees its
Indonesian sales falling by as much as 32 percent this year on weak
purchasing power and soaring interest rates, but hopes for a recovery
in 2007.

"For Daihatsu, we predict total sales volumes of 33,000-35,000 units,"
Johannes Loman, chief executive of sales operations in Indonesia told
reporters on the sidelines of the launch of a new model. The firm sold
48,762 units last year.

Indonesia's auto sector and economy are suffering from a government
decision last year to sharply hike domestic fuel prices as it scales
back costly fuel subsidies following high global oil prices.

"It is difficult to see how 2007 will look," he said "but we are
hoping for an improvement from this year's sales as the economic
condition is improving and interest rates decline."

He sees overall industry sales volume in Indonesia of around 300,000
and 350,000 units this year, down from 533,910 last year.

Vehicle sales in the fourth most populous country plunged about 50
percent in the first half of 2006 compared to the year-ago period and
industry association Gaikindo predicts sales will only be between
370,000-400,000 units this year.

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Indonesia govt postpones 2 trln rupiah retail bond issue to Aug 9

JAKARTA, July 12 (XFN-ASIA) - The government has postponed its
first-ever issuance of retail bonds worth 2 trln rupiah to Aug 9 from
the earlier schedule of Aug 2, a finance ministry official said.

The offering date is from July 17 to Aug 4, said Rahmat Waluyanto, a
director at the Ministry of Finance's directorate of treasury bond
management.

The ministry has set a coupon of 12.05 pct for the bonds.

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Dubai Islamic Bank explores investment prospects in Indonesia

JAKARTA, July 12 (Asia Pulse/Antara) - Attracted by Indonesia's
natural resources and business opportunities, the Dubai Islamic Bank
(DIB) is investigating investment opportunities in various fields in
the country, DIB chief executive officer Aref Koheji said in Jakarta
yesterday.

"We came here to see the monorail and other projects, as well as
business opportunities," Arej Koheji said after meeting Jakarta
Governor Sutiyoso at City Hall.

Accompanied by Jakarta Monorail director Sukmawati, Koheji said a lot
of projects such as electricity, oil and gas, infrastructure projects
and sports facilities could be built in Indonesia.

"I think this country has many good potentials and we have come here
to explore them," he said.

Asked if his visit to Indonesia was to acquire government assurance
about the monorail project, Koheji said "We don't wait for anything
from the government. Monorail was a project and we came here to see
the prospects of the other ones."

He added that he also came to Indonesia to meet Vice President Jusuf
Kalla and Jakarta Governor Sutyoso after the latter visited Dubai to
witness the signing of a memorandum of understanding (MoU) on the
monorail project and encourage Dubai's businesspeople to invest in
Indonesia.

"We came here to meet and to talk with the government officials about
the investment prospects here," Koheji noted.

Meanwhile, governor Sutyoso said the visit by the Dubai Islamic Bank
official was to confirm the bank's commitment to disburse US$650
million to finance the Jakarta monorail project and to explore
investment prospects in other projects.

"They came here to find business opportunities. Monorail was only a
starting point," Sutyoso said.

The monorail consists of two lines, "blue line" from Kampung Melayu in
East Jakarta to Roxi in West Jakarta, and "green line" that will link
Rasuna Said street, Gatot Subroto, Sudirman Central Business District,
Senayan, and Pejompongan.

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Indonesia's Telkomsel targets to have 35 mln subscribers by yr end

JAKARTA, July 12 (Asia Pulse/Antara) - The country's largest mobile
phone operator Telkomsel is targeting to list 35 million subscribers
by the end of this year.

By the end of June, the subsidiary of state-owned telecommunications
company PT Telkom, already recorded 29 million subscribers, its
President Kiskenda Suriahardja said yesterday.

Kiskenda said its third generation (3G) mobile phone service is
expected to add 270,000 to its subscribers this year.

Telkomsel will build 3G telecommunication networks in nine cities in
the country to cost Rp3 trillion (US$333 million).

Three vendors Nokia, Siemens and Ericsson will take part in a tender
to build the networks in Medan, Palembang, Jakarta, Bandung, Semarang,
Surabaya, Denpasar, Balikpapan and Makassar, Kiskenda said.

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Indonesia's Indosat expects 4 mln new subscribers

SURABAYA, July 12 (Asia Pulse/Antara) - Publicly-listed
telecommunications operator PT Indosat (JSX:ISAT), which has 14
million subcribers till June 2006, expects to sign up another 3
million to 4 million subcribers, an executive of the company said.

"We are optimistic our subcribers will continue to grow in line with
the marketing initiatives we have made," Wahyu Wijayadi, PT Indosat's
marketing director in Purwodadi, East Java, said on Tuesday.

According to him, the company has programs to support the marketing of
its products, including Rajanya SMS, Free Talk 5 hours, and extension
of local tariffs.

It also will increase the number of its base transceiver stations
(BTSs) to support its services.

On the registration of Indosat's pre-paid subcribers, Wahyu said 90
per cent of the subribers had registered.

He further said that the implementation of 3G is expected to be
launched in Surabaya and Jakarta later this year.

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Indonesia offers 1.3 mln Ha for logging, timber plantations

JAKARTA, July 12 (Asia Pulse/Antara) - The forestry ministry said it
will auction 1.3 million hectares of forests for logging and to be
converted into plantation forests (HTI).

Earlier, the ministry issued licenses for 18 logging companies and
four HTI companies over a total of 715,785 hectares of forests.

Data from the ministry show that the 1.3 million hectare forests are
in Jambi, South Sumatra, Riau, East Kalimantan, West Kalimantan,
Central Kalimantan, Central Sulawesi, Maluku and Papua.

Around 949,100 hectares of the forests will be divided among 16
logging companies and the rest will be split between 9 HTI companies,
the newspaper Bisnis Indoensia said.

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Indonesia Astra Daihatsu Launches New Compact Van Models

JAKARTA, July 12 (Dow Jones)--PT Astra Daihatsu Motor Wednesday
introduced three new "Daihatsu Xenia" compact-van variations in
Indonesia as the company moves to increase production next year
despite declining car sales.

"We hope this (new models) will help increase our sales," Hideki
Nomura, president director of the joint venture between Japan's
Daihatsu Motor Co. (7262.TO) and PT Astra International (ASII.JK) told
Dow Jones Newswires on the sidelines of the launching of the new vans.

"Since October 2005, car sales have been falling significantly... and
we still haven't seen any signs of an improvement yet," he said.

In August, the company will start to sell the new vans with prices
ranging from around IDR84.05 million ($9,290) to IDR103.05 million,
with engine sizes of 1,000 cc and 1,300 cc.

The vans consume around 7% less fuel than their predecessors due to
new engine technology, the company said.

The company is optimistic it will sell more Daihatsu Xenia models a
month this year than the 2,000 sold monthly last year, Johannes Loman,
the company's sales director said. He didn't provide an exact sales
forecast.

Astra Daihatsu expects to have a 10.5% share of the total 300,000 to
350,000 new vehicles forecast to be sold this year in Indonesia,
suggesting the company's Indonesian sales are forecast to fall from
48,762 units last year.

Many car producers in Indonesia are launching new products in a move
to boost sales, which have been hit hard by rising fuel prices and
high interest rates. Car sales are expected to fall around 40% this
year from an all-time high of 534,000 last year.

Nomura expects Bank Indonesia's move to cut its key rate 25-basis
points to 12.25% last week as well as promised rate cuts later this
year will help car sales.

Nomura said that the company plans to boost output to 150,000 units a
year in 2007 from 114,000 in 2005, and around 134,000 units expected
this year.

"We plan to invest more in the future (to boost production)," Nomura
said, without providing details.

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Indonesia's Palazzo to build 15,000 houisng units in Jakarta

JAKARTA, July 12 (Asia Pulse/Antara) - The Palazzo Group said it will
build 15,000 units of apartment and houses valued at Rp7 trillion
(US$777.7 million) in the Kemayoran area of Jakarta in the next 5
years.

Currently the property company is building a number of projects in
that area, including the Palazzo Apartment over a three hectare plot
of land, its president Usman Effendi said yesterday.

Usman said the 15,000 apartments and houses may occupy around 30
hectares of land.

The residential area will cover 155 hectares or 40 per cent of the
Kemayoran area, a government official said.

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Indonesia's Pudjiadi builds property projects worth US$83.3mln

JAKARTA, July 12 (Asia Pulse/Antara) - Publicly listed property
company PT Pudjiadi Prestige (JSX:PUDP) said it is building three
property projects valued at Rp750 billion (US$83.3 million) in
Jakarta, Makassar and Bandung.

Company President Kosmian Pudjiadi said the Marbella Kemang Residence
in Jakarta and Marbella Dago Pakar Resort Hotel and Apartment in
Bandung will cost around Rp300 billion each, while the one Merbella
Makassar Lagoon Hotel and Apartment will cost around Rp150 billion.

Kosmian said the company does not need a loan to finance the project,
adding that part of the fund is expected to be provided by buyers.

He said the property business depends much on the bank credit interest
rate, adding, if the interest rate could be reduced to 10 per cent,
property business is expected to grow.

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Indonesia offers incentives to boost investment in chemicals sector

JAKARTA, July 12 (Asia Pulse/Antara) - The government said it will
offer tax incentives for both new and existing investors in chemicals
industry in a bid to boost investment in the sector, an official said.

The facilities will offered to firms building new factories or
expanding their businesses in the chemicals, petrochemical,
oleo-chemical and pharmaceutical industries, Agro and Chemical
Industries Director General Benny Wahyudi said.

"In the near future we will need another olefin center and in the next
five to 10 years we will need one that is bigger than Chandra Asri,"
Benny said, referring to the country's largest petrochemical factory
in Banten.

He said the incentives will be in the form of tax cuts.

He said he was confident the incentives will attract investors.

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Indonesia's Enseval prepays 12 mln usd syndicated loan

JAKARTA, July 12 (XFN-ASIA) - Pharmaceutical products distributor PT
Enseval Putra Megatrading prepaid a 12 mln usd syndicated loan last
month to the Royal Bank of Scotland, the loan syndicate's coordinator
bank, company president Vidjongtius said.

"We decided to speed up debt repayment because dollar interest rates
are trending higher and the rupiah's exchange rate is unstable," he
told XFN-Asia.

Moreover, he said the firm has a strong cash position at present.

Enseval's parent firm PT Kalbe Farma had earlier also decided to
prepay a syndicated loan of 77 mln usd but Vidjongtius said Kalbe
Farma opted to refinance its debt while Enseval settled its obligation
using internal cash flow.

He said following the debt prepayment, Enseval's outstanding debt to
all its creditors now amount to 14 mln usd.

Under the original debt restructuring scheme signed in 1998, Enseval
has until 2010 to repay 35 mln usd in debt to the Royal Bank of
Scotland-led syndication which comprised CIC, UBS and Credit Lyonnais.

"We aim to speed up the payment of the rest of our debts whenever our
cash flow situation allows it," Vidjongtius said.

Enseval generates roughly 70-75 pct of its revenue from distributing
products from Kalbe Farma.

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Indonesia's Astra Agro H1 CPO output 470,718 tons, up 13.9 pct yr-on-yr

JAKARTA, July 12 (XFN-ASIA) - PT Astra Agro Lestari, a unit of car
dealer PT Astra International, said its crude palm oil (CPO)
production rose 13.9 pct in the first half to June to 470,718 tons
from 413,229 tons a year ago.

High grade 'Super CPO' accounted for 51.8 pct or 243,996 tons of the
output in the first half while regular CPO made up the remaining 48.2
pct or 226,722 tons.

The company said the higher output was a result of the rise in
harvested fresh palm fruits and higher fruit purchases from third
parties.

It said fresh fruit output rose 8.2 pct to 1.9 mln tons during the
first half from 1.7 mln a year ago, with production yield rising 8.4
pct to 10.1 tons/hectare from 9.3 tons previously.

Astra Agro has set a full-year CPO output target of 950,000 tons
against actual output of 857,139 tons in 2005.

Indonesia and Malaysia are world's largest CPO producers, with each
accounting for 43 pct of world CPO production, which is seen to reach
36.5 mln tons this year from 33.6 mln in 2005.

Citing an industry report, Astra Agro said world CPO production is
projected to grow by a modest 3 pct to 37.6 mln tons next year.


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Indonesia palm oil firmer on rupiah, buyers return

JAKARTA, July 12 (Reuters) - Indonesian palm oil prices were firmer on
Wednesday as the rupiah lost ground against the dollar, but weakness
in Malaysia crude palm oil futures limited gains, traders said.

But the underlying tone was still bearish without any fresh
fundamental news to move the market.

In Medan, the capital of North Sumatra province and a key port for
palm oil exports, crude palm oil was quoted at around 3,926 rupiah
($0.433) a kg versus 3,920 rupiah on Tuesday.

At the state marketing centre's auction in Jakarta, CPO traded at
3,907 rupiah versus 3,898 on Tuesday.

"Gains in prices are not significant. The rupiah is weakening, but
Malaysia is down a lot today, basically it's just moving within a
range," said a trader in Medan.

"There's barely any other factor that is moving the market," he said,
adding that some 750 tonnes of CPO traded at the auction.

Late on Wednesday, the rupiah was quoted at 9,095 against the dollar
versus 9,040 on Tuesday.

Malaysian crude palm oil futures slipped at midday on Wednesday
because of a lack of buying and higher stocks, with the benchmark
third-month September <KPOU6> contract on the Bursa Malaysia
Derivatives market down 10 ringgit at 1,503 ringgit ($412) a tonne.

Late on Wednesday the September contract was down 22 ringgit at 1,491.

In Jakarta, RBD palm olein, used as cooking oil, was quoted around
4,340 rupiah a kg, up from 4,325 rupiah on Tuesday.

Good demand from refiners had lent support to prices, traders said.

"Some buyers showed up today. Most of them are refiners seeking to
refill their stocks," said an official at the state marketing centre.

Export demand remained slow, with no deals noted for immediate
shipment, but prices were firmer compared with Tuesday.

July shipment was offered at $402.5 a tonne, up from $397.5 on
Tuesday, free on board Belawan. Bids were seen at $397.5.

For August shipment sellers offered at $405 versus Tuesday's $402.5,
free on board Belawan. Buyers bid at $402.5, but no deals were
reported.

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Asia Rubber-Tokyo nudged higher on supply concerns

BANGKOK, July 12 (Reuters) - Tokyo rubber futures edged higher on
Wednesday with prices expected to stay firm due to supply concerns in
rubber producing countries, traders said.

Benchmark most distant December Tokyo Commodity Exchange
rubber<0#JRU:> rose 0.1 yen to settle at 294.3 yen ($2.57) a kg after
trading between 293.8 and 297.5 yen.

"Speculative buying was triggered when prices slid to 294.0 yen.
Players had expected prices not to fall to the latest key support of
around 280.0 yen," a Singapore based trader said.

Traders cited supply concerns in southern Thailand, the country's main
rubber planting region which produces around 90 percent of total
production, where heavy rains threatened to disrupt tapping over the
next few days.

Thailand's Meteorological Department issued a heavy rain and flash
flood warning for the provinces of Trang, Satun and Phatthalung in the
rubber-producing south.

"Statistically, prices won't fall that fast, especially when people
are concerned about supply," a trader in Bangkok said.

Thailand's benchmark RSS3 rubber sheet for August shipment was quoted
at $2.68 per kg, up from Tuesday's $2.62 per kg, in line with a
rebounding Tokyo exchange.

Indonesia's SIR20 was at 106.30 U.S. cents per pound ($2.35 a kg), a
little higher from Tuesday's $2.31 due to expectations of tigher
supplies as the winter season begins in some rubber-producing regions.

"The winter season for rubber is now in some parts of Sumatra. We
could expect less supply over the next few weeks," a trader in Jakarta
said.

There was strong demand from auto industries in China and players on
the Tokyo exchange who needed to deliver nearby July contracts,
traders said.

"For Thailand, there were nearly 100,000 tonnes of RSS3 being shipped
every month," said a Thai exporter.

Some Jakarta dealers said they had sold several lots of SIR20 to China
at around $2.30-2.36 to Chinese buyers for August shipment.

In China, the most active September Shanghai rubber contract <0#SNR:>
rose 20 yuan per tonne to end at 25,500 yuan ($3,192) per tonne,
tracking the Japanese market.

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Separate FTAs undermine Asean spirit: Malaysian Institute

KUALA LUMPUR, July 12 (Asia Pulse/Bernama) - The signing of separate
free trade agreements (FTAs) by individual Association of South-East
Asian Nations (Asean) members with other countries will undermine the
10-member grouping and further marginalise its poorer members, the
Malaysian Institute of Economic Research (MIER) said.

Singapore was the first Asean member to sign FTAs and later Thailand,
Malaysia, Indonesia and Philippines followed suit.

MIER executive director Emeritus Prof Dr Mohamed Ariff said such moves
would leave the lesser developed Asean economies like Laos, Myanmar
and Cambodia in a more disadvantaged position as they do not have the
economic capacity to sign complex trade agreements to reap
concessions.

"Asean collectively signing a FTA with Japan or US is better than
individual countries doing it because collectively you have some clout
but individually you do not," he told Bernama Tuesday.

"It undermines Asean's solidarity because not all Asean members can
participate in this (FTA). The US is not interested in signing
agreements with Laos or Myanmar, it is only interested in key
countries. So these countries cannot participate unless it is done
collectively," he added.

He said from the beginning Asean failed to spell out strict conditions
to prevent members from signing separate FTAs with other countries and
this had opened the floodgates.

For instance, Singapore has signed FTAs with Japan, US, Australia, New
Zealand and Thailand.

Ariff said the reason some countries sign the FTAs was because of
Asean's delay in reaching common consensus.

"Why Singapore did it? It was not to undermine Asean or Afta (Asean
Free Trade Zone). Asean was going too slowly for Singapore, Singapore
is a front-runner.

"Asean is heterogeneous and it is difficult for Asean as a group to
come to some kind of consensus and it would take time. Even if they
come to some kind of consensus it would be at the lowest common
denominator which is not acceptable to Singapore," he said.

While the FTAs have been seen as a fast-track economic cooperation
that enables signatories to benefit from trade concessions, it is
unhealthy for Asean which wants to create an Asean Economic Community
by 2020.

Ariff said the best option was to multi-lateralise the whole process
so that all countries could benefit because Asean economies are
progessing at different levels.

"Simply multi-lateralise every thing given to all the countries
bilaterally. If you give some concessions to Japan, then give to all.
If you give to US, then give it to all.

"So you are not forced to buy from Japan or US because you have given
them some concessions, you will buy from the cheapest source," he
said.

Asean is in the process of negotiating FTAs with China and dialogue
partners South Korea and Japan. Negotiations are also in progress with
India, another emerging economy to sign a FTA.

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Joyo Indonesia News Service
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