Desember 2016 3rd week

23 december 2016

Categories : IR Weekly Review


  • MACRO
    • Central Bank of the United States or Federal Reserve (the Fed) has raised its benchmark interest rate cap ahead of 2016. Now the Fed's benchmark interest rate is set at 0.75%, an increase of 25 basis points. The Fed is also projected to be able to raise its benchmark interest rate three times in 2017. However, according to Bank Mandiri’s Chief of Economist Anton Gunawan Herman, since it has been predicted, the Fed will not raise its benchmark interest rate in the year 2017. Therefore, there has been no room for the Fed to be able to raise the benchmark interest rate. "At the same time we still see no Fed rate hikes. Despite the Fed rate is expected to triple," he said at Plaza Mandiri, Jakarta, Thursday (12/22/2016). However, BI also needs to be careful in setting monetary policy. Therefore, the credit in 2017 is predicted to increase to 13.5%. That is, it needs the appropriate policy so as to encourage credit growth in 2017. "Banking, loan growth still seems to be low double digits. This year one digit, including DPK (third party funds)," he concluded.

    • Asian stocks trading on Wednesday (21/9) was closed higher after Bank of Japan had delivered its decision related to monetary policy, while maintained the deposit rate at minus 0.1 percent. At the end of today's trading, the Nikkei 225 index in Japan closed up by 315.47 points or rose by 1.91 percent to 16,807.62 range. The Hang Seng index in Hong Kong was closed down increased 151.04 points or 0.64 percent to 23681.90 range. Reinforcement was also experienced by Australia's ASX 200 index closed increased by 35.99 points or 0.68 percent to 5339.56 range. The Shanghai index in China was closed higher by 2.48 points or 0.08 percent increase to the range of 3,025.48. Meanwhile, the Kospi in South Korea in today's trading was closed up by 10,28 points or 0,51 percent to 2,035.99 range. Meanwhile, crude oil prices on Wednesday trading also posted gains. US crude oil, WTI, in today's trade recorded an increase of 2.09 per cent to around US $ 44.97 a barrel and Brent crude oil rose by 1.55 percent to US $ 46.59 per barrel.

    • Review:

      Some doubted the statement saying that the Fed will not raise its benchmark interest rate. This is because the US government spending plan in large quantities may encourage the Fed to raise interest rates. Even so, the Government of Indonesia through Bank Indonesia (BI) has anticipated this increase by making a forecast increase of three times in the simulation.

  • MICRO
    • Governor of Bank Indonesia (BI) Agus Martowardojo asks for the support of President Joko Widodo (Jokowi) to finalize the Draft Law (Bill) of rupiah redenomination. With this redenomination, then the number of digits in the rupiah will be simplified as 1,000 to Rp1. He says currently  BI and central parliament is arranging the draft bill rupiah redenomination. With being redenominated, it will be followed by an adjustment of the prices of goods and services. "We also want to propose to the President, please support the process of settlement of the bill Redenominasi Rupiah. With the bill, there will be the simplification of the number of digits of the redenomination of rupiah, followed by adjustment of the prices of goods and services," he said at the Bank Building, Jakarta, Monday (19/12 / 2016). According to him, the rupiah redenomination would not reduce the purchasing power. Therefore, redenomination would not reduce the value of the rupiah (sanering), and it just made more simple and efficient denomination. "Redenomination would not reduce the purchasing power. Redenomination is not sanering, because there will be a transitional period of at least eight years. With the support of the President, we will coordinate with the Ministry of Finance for the completion of the bill," said Agus.

    • In an effort to speed up the licensing, the Financial Services Authority (FSA/OJK) has launched the Integrated Licensing Information System and Registration (Sprint) for the sale of mutual funds through the bank as a mutual fund dealer and registration of public accountants. Chief Executive of the FSA Capital Market Supervisory Nurhaida said, Sprint mutual fund was an innovative system integration of third launched by the FSA. "Until 2018 our targets are still five more Sprints which would be launched. It’s already three, bancassurance was in July 2016, and today there are two funds together public accountants and public accounting firms," ​​he said in the House FSA Lapangan Banteng, Jakarta, Monday ( 19.12.2016). Furthermore, the FSA would launch Sprint to process the permit issuance of debt securities or bonds and the IPO or initial public offering (IPO) for new issuer "Essentially there are interconnectivities" he added. Nurhaida admitted, the current bond issuance process also involved various compartments such as capital markets and banking supervisors. That is what would later be integrated.

    • Review:                                                                                                                                     

      Request support regarding simplification (redenomination) of rupiah by BI Governor has received a response from the President. He said it took up to seven years to implement the plan. The plan should be included in the National Legislation Program, but apparently does not exist. As it is known that the purpose and benefits of rupiah redenomination is to facilitate a wide range of activities that have to do with money.

  • BANKING
    • BNI corporate secretary, Ryan Kiryanto, is estimating that banks' loan growth will improve in 2017. He predicts credit growth in 2017 will be able to reach double digits or better than 2016, which is estimated to be only single digits. "The growth potential of Indonesian bank loans in 2017 will be relatively better than 2016. Next year there is the potential for credit growth would reach double digits. Maybe if 11% it is still possible," Ryan said in Jakarta, Thursday (22/12/2016 ). He said, there are factors that will drive credit growth next year to become better. First, household consumption is expected to continue to increase which will be able to grow above 5%. This condition is believed to increase the demand for credit in the banking system. While Indonesia's economic growth target in the State Budget (APBN) in 2017 will be in the range of 5.1%, slightly lower than the 2016 revised budget targets of 5.2%. "The economic growth target for the most realistic and ideal at this time, as long as the inflation is low. It is noted that this year's inflation is estimated at around 3 (three) percent, very low and a good record. It is lower because the government no longer think of the subsidy," said Ryan.

    • Bank Mandiri in cooperation with the Attorney General's Office to deal with problem loans and pursuing naughty debtors. According to the Attorney General, this cooperation’s purpose is to demonstrate the present state of society for the welfare of the people. "The debtor whose credit jammed intentional often distort facts. They even accused the bank managers make mistakes. In addition, there is also a falsified document with the aim to benefit themselves," said Attorney General HM Prasetyo in a press release on Thursday (22/12/2016). Through this cooperation also continued by Prasetyo, the Attorney General is ready to provide legal assistance either litigation or outside of litigation to the Bank both at central and local levels. "This is done to protect the state finances in accordance with the provisions of existing law. In accordance with duty prosecutor to protect state assets from the control of unauthorized parties, "said attorney General. Corporate Secretary of Bank Mandiri Hafas Rohan said the move is a synergy between Bank Mandiri as a state with the state attorney General's Office as a lawyer, to save the state assets of naughty debtors, "We have a commitment to resolve bad loans for borrowers who do not have good faith to settle their obligations. The AGO will help pursue delinquent debtors so as to avoid losses to the state," said Rohan.

       

    • Review

      As known that this year's loan growth is around one digit. One of the reasons was caused in part by the impact of global, where the commodity is not currently undergoing refurbishment has affected the demand for loans in the sector. However, with the improvement of market trends, it is expected the credit expansion and improvement of non-performing loan will begin to appear next year.

Disclaimer : This document is for informational purposes only and obtained from a variety of reliable sources, but is not a guarantee the accuracy or completeness and should not be relied on completely. The above conditions may be changed at any time. Forbidden to rewrite anything without written permission from The East Java Regional Development Bank