October 2016 3rd Week

21 october 2016

Categories : IR Weekly Review


  • MACRO
    • Vice Chairman of Federal Reserve Stanley Fischer says the government's policy can counteract some of the impacts of declining productivity that withstand the US economy and weigh on interest rates. Fischer emphasizes, based on the study of the Fed, increased government spending by 1 percent of gross domestic product will cause a rise in the equilibrium level of interest rates, the level of which does not stimulate or restrain the economy, by 0.5 percent. Similar tax cuts will raise the equilibrium level of 0.4 percent. Central banks in the developed countries grappling with sluggish growth, low inflation, as well as difficulty in dealing with these challenges when interest rates already close to or even reach zero percent. Fischer points to a number of factors that suppress the growth and interest rates in the United States. He stresses that the trend of slower growth due to low productivity, while labor force growth is slower associated with demographic change.

    • The World Bank on Thursday raised its forecast for oil prices in 2017, as members of the Organization of Petroleum Exporting Countries (OPEC) are preparing to restrict their production. In the report "Prospects for Commodity Markets' latest quarterly, the lender based in Washington estimated that the crude oil price in 2017 will reach 55 dollars per barrel, increasing its forecast from 53 dollars per barrel in July. "We expect a strong rise in energy prices, led by oil, next year," said John Baffes, lead author of the report. He added that the estimate was under "significant uncertainty", because the market expects OPEC details and implementation of the agreement. The report said OPEC's ability to influence oil prices were likely to be tested by the expansion of oil supply from non-conventional sources, including US shale oil industry.

    • Review:

      US government policy is believed to counteract the weakness of productivity, which is weighing on interest rates and weaken the domestic economy. That is, with a combination of encouragement for private investment, improving public infrastructure, better education, and more effective regulation.

  • MICRO
    • The Financial Services Authority (FSA) continues to encourage industry players, especially in the area to take advantage of capital market as a source of funding in their business development. This was conveyed by Chief Executive of the FSA Capital Market Supervisory Nurhaida when opening socialization 'Capital Markets as a Source of Funding For Industrial Development in the Regions' in Medan, North Sumatra. He explained that this socialization activities intended to further disseminate information related to the capital market businesses in the area so that the utilization of capital market in the region as a source of funding could be improved. According to a growing number of companies in the area which conducted an initial public offering (IPO) would certainly boost the local economy and encourage the emergence of economic centers that were more spread out, not only concentrated in certain areas.

    • Economic growth in the third quarter of 2016 according to Bank Indonesia (BI) will not be as robust. Executive Director of the Communications Department BI Tirta Segara explained, it was influenced by the improvement of private investment that was estimated not powerful. "Meanwhile, for the factor in other countries, fiscal stimulus is expected to remain limited, in line with the adjustment of government spending in the second half of  2016. This is why the third quarter growth is not as strong as expected," said Tirta in Jakarta, Thursday (20/10/2016) , On the external side, he thought that it was still the weak of economy and world trade resulted in improvements in real exports were still stuck, although prices for some export commodities began to improve. Moreover he added that the global economic recovery was still in slow progress and uneven.

    • Review:                                                                                                                                                                                                

      Financing through the capital market has added value to the business world in particular and society in general. It is described that the advantages of capital markets bring direct excess funds to the public funding needs by the company so that the expected cost of capital funding from the capital market will be lower.

  • BANKING
    • PT. Bank Rakyat Indonesia Tbk (BRI) continues to support the government in efforts to accelerate financial inclusion throughout Indonesia. Located at SMK Negeri 2 Yogyakarta and SMPN 6 Yogyakarta, this time Bank BRI with the Ministry of Education and Culture (Kemendikbud) Republic of Indonesia inaugurates Indonesia Smart Card (KIP) Plus. The event was attended by Director General of Primary and Secondary Education (Directorate General of Primary and Secondary Education) Ministry of Education and Culture Hamid Muhammad and Director of Institutional Bank BRI Kuswiyoto. Inauguration in this city is a follow up on the instructions of President Joko Widodo (Jokowi) to channel funds in non-cash social assistance. "To realize the acceleration of financial inclusion as directed by the President, Bank BRI together Kemendikbud Indonesia has specifically designed the scheme of distribution of Program Indonesia Pintar (PIP) using cards for elementary school students, junior high school and vocational school across Indonesia beneficiary PIP through KIP Plus," said Corporate Secretary of Bank BRI day Standby Amijarso through a written statement in Jakarta, Wednesday (10/19/2016). He explained, KIP Plus in one card has three different facilities, ie, as a private label debit card, wallet PIP, and BRI ATM card. As a private label debit card, KIP Plus can be used by students to shop for school supplies at merchants and cooperative-the Cooperative School were using in EDC BRI.

    • PT Bank Mandiri Tbk (Bank Mandiri) continues to innovate in the non-financial products to be used as an instrument container repatriation of funds in a tax amnesty program. Some of the products that will be introduced include those that are relating to repatriation of investment in gold, property and direct investments in companies. "Those products will complement the financial instruments which had previously been socialized Bank Mandiri, such as treasury products, asset management, capital markets, capital / venture funds to insurance products," said Corporate Secretary Rohan Hafas Bank Mandiri in Jakarta, Sunday (23/10/2016 ). He said, in the second stage of the tax amnesty program, the bank is focusing on efforts to promote financial products and non-finance the Bank Group to the taxpayer as an instrument container repatriation of funds. "Innovation Development of financial products and non-financial for the purposes of this tax amnesty will we adjust or tailor to the needs of the tax amnesty so that they will be more comfortable and terdoronv to put the repatriation of funds in the bank," Rohan said. According to him, thanks to a good socialization, currently the awareness of taxpayers about the tax amnesty policy is quite high. This is evident from the increase in value of fund raising tax amnesty Bank Mandiri reached Rp20,5 trillion per October 20, 2016 compared to Rp731 billion at the end of August 2016.

    • Review

      The synergy between BRI and Ministry of Education and Culture (Kemendikbud) in the launch of this trial KIP Plus, it is expected that Social Assistance Funds (Bansos) distribution, particularly through KIP Plus PIP will be better targeted and more efficient also the use will be more accountable and ultimately enhance Indonesia’s financial inclusion.

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