FLGS - Global Finance Report

an international agency, Fitch Ratings, raised ratings of eight banks in Indonesia from BB to BB +. this shows, the first quarter of 2009 despite the world situation is still not recovered from the crisis, the financial performance of banks in Indonesia is quite good.

Eight banks increased their ranking by Fitch Ratings on Wednesday (27/1/2010), the Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, Bank CIMB Niaga, Bank Danamon, Bank Internasional Indonesia, Bank NISP OCBC and UOB Bank Buana.

Earlier, on January 25th, the same institution to raise the rank of Indonesia `s debts in foreign currency, from BB to BB + with stable outlook.

“This ranking reflects the increase in endurance in the midst of the financial performance of operating conditions more difficult, especially in the first quarter of 2009,” said Director of Financial Institutions Group Fitch Ratings Tan Lai Peng in Jakarta.

He explained that the increase was ranked according to Fitch Ratings’ expectations that the improvement of banking in Indonesia will continue because the macro economic outlook is stronger in 2010.

Although ranking these banks rose, Tan admitted that the quality of loans in almost all banks in 2009 decreased. This decline is expected to continue in early 2010. However, Tan believes, operating conditions are better this year will support the credit quality and profitability in the future.

In the midst of political criticism

According to analysts of capital markets and banking, Mirza Adityaswara, Indonesia increase state rank reflects the trust of international agencies on macro economic conditions of Indonesia. In 2009, Indonesia one of the few countries in the world that have a positive economic growth, which is 4.3 percent.

This year, Mirza said, Indonesia’s economic growth could be supported by 5,3-5,7 percent with a large population, heavy reliance on exports is relatively low, a healthy banking system, as well as fiscal policy and financial authorities to be careful.

“So, in the midst of criticism against the government some politicians, turned out to agencies such as Fitch Ratings gave praise to raise the ratings of Indonesia and Indonesian banks,” said Mirza.

Related increase in the ranks of eight banks with liquidity, Mirza said, since the 2009 third quarter, is no longer a problem of liquidity in the domestic banking system.

The flow of credit in this year, according to Mirza, will depend on the demand for credit and real sector activity for bank loans that have not been distributed is still quite large.

Should, go Mirza, real sector activity in this year may be in line with the improvement of the global economy and the domestic economy. Thus, loans from banks that have not been distributed can be used by employers.

Bank Indonesia (BI) ready to facilitate national banks will expand internationally.

BI Deputy Governor Muliaman D Hadad said, his department saw the condition of the national banking system is now strong enough and get the trust of the community. This is the opportunities for banks that will begin to look the global market.

“We need not lose heart because of our banking industry is strong enough, there was even a glance at the global market,” said Muliaman said the Banking Industry Dialogue in 2010 in the Multipurpose Building Indonesian Banking Development Institute (LPPI), Jakarta, Monday (25 / 1 / 2010).

He insisted, if necessary, it would facilitate the national banking system to speak with the banking authorities of other countries in order to obtain legal umbrella to go global. Related to this, the BI will also hold talks with member countries of G-20.

“As a member of the G-20, we can speak with authority from other countries in order to dipayungi to go global,” he said.

Banking Industry Dialogue was held LPPI to facilitate a meeting between the banking industry and the regulator. Discussed here further that agenda will be made in answering the opportunities and challenges in the Indonesian banking system in 2010.

This event was also a forum for deepening the Bankers Dinner held BI on January 22, 2010. Present in this dialogue of the Board of Banking Association and all relevant directors or echelon I of the government banks, regional development banks, national private banks, banks mixed, Islamic banks, foreign banks, and people’s credit banks.

President of the United States (U.S.) Barack Obama will submit a proposal to restrict the rules of banking activities in the country. Specifically, Obama wants to restrict the activities of investment banks buying assets or shares to profit.

“Activities that have nothing to do with the interests of customers,” said Obama in an interview with ABC, as quoted by Bloomberg, last week.

Transactions are usually called proprietary trading practices are the cause of speculation in the U.S. property market is the cause of the crisis in 2008. So, go Obama, limiting the size and activities of financial institutions necessary to reduce excessive risk.

This proposal will become part of the reform of financial regulation that will govern the perpetrators to behave reasonably. “U.S. financial regulatory system currently is not enough to watch the extra risks and player behavior irresponsible,” Obama said.

Close of business “private equity”

The proposal would force the U.S. banking giant, such as JP Morgan, Goldman Sachs, and Morgan Stanley, the business unit to sell their private equity. Can not be denied, big banks like Goldman would lose a lot of revenue.

Understandably, the business was, in the last year Goldman became the most profitable bank in Wall Street history. More than 90 percent of income before tax from Goldman Sachs private equity unit is.

Managing Director of Goldman Sachs Lloyd Blankfein said, the company must generate their own profits in order to cover losses that occur due to the crisis in 2008.

State government plans Uwak Sam is actually not much different from the British Government did. A month ago, the financial services authority in England has announced plans to restrict the proprietary trading at banks. As a result of the rule, the country’s banking industry must set aside capital reserves to 47 billion U.S. dollars to cover potential losses from the business.

This rule is not a criticism. Bruce Ettelson, legal consultant at Kirkland & Ellis LLP, says, this will impact on the rule change on Wall Street and many business deals have been agreed previously. “This rule also increasingly shrinking sources of funding for private equity and hedge funds,” he said.

Balance of Trade of Indonesia in the year 2009 reported a surplus of 19.63 billion U.S. dollars. One factor driving is because of the special trade balance surplus in December 2009, which recorded U.S. $ 3 billion.

“When compared with the trade balance surplus by the end of December 2008, which reached 7.82 billion U.S. dollars, the trade balance surplus in 2009 increased three times compared to the year 2008,” said Head of the Central Statistics Agency (BPS), Rusman Heriawan in Jakarta, Monday (1/2/2010) when the monthly report on inflation, exports, imports, and economic indicators other.

The trade balance showed an increase or decrease in value of exports and imports. Position in December 2009, Indonesia’s trade balance showed that the cumulative exports reached 116.49 billion U.S. dollars. The value of imports of 96.86 billion U.S. dollars. Thus, the export value of more tingga 19.63 billion U.S. dollars compared to the value of imports, or a surplus. “This is a signal that the actual beginning of the world economy is recovering,” said Rusman.

Having suffered financial crisis and the global economy since the end of 2008, the value of monthly exports Indonesia has always been a negative growth starting from January to September 2009. However, starting in October 2009, the export value grew back positive.

Between October to December 2009, Indonesia exports helped by an increase in international trade in some commodity, namely crude palm oil (CPO), coal, and copper. Export this causes non-oil exports in December 2009 reached 10.83 billion U.S. dollars, or up 28.3 percent compared to November 2009.

Exports in December 2009 it was the biggest in the history of Indonesian exports. Because the highest monthly exports in May 2008, ie 12.9 billion U.S. dollars. “It was exceeded by exports in December 2009, which reached 13.33 billion U.S. dollars,” said Rusman.

Now is the time to buy oranges, gold, chicken meat, or eggs. All four of these commodities is the largest contributor to the deflation that occurred in January 2010 as prices decline significantly.
For mothers who like to collect the gold, it’s time to buy gold because the price was falling.

“For moms who love to collect gold, it’s time to buy gold because the price is going down,” said Head of the Central Statistics Agency (BPS) Rusman Heriawan said in Jakarta on Monday (1/2/2010), when the monthly report on inflation, exports, imports, and economic indicators other.

BPS report shows, from the 66 cities surveyed during January 2010, no one city or any district that experienced deflation. However, BPS was noted that some commodities are falling in price, ie, orange, gold, chicken meat, or eggs.

“As usual, the fruit is always a major factor of deflation. We also recorded a deflation in the clothing commodity groups,” said Rusman.

BPS has not seen any impact of the realization of the Free Trade Agreement China-ASEAN (CAFTA) which causes lower clothing prices. On that basis, the price of clothing is expected to further come down when CAFTA was implemented starting January 1, 2010.

“If the FTA before it is deflation, the clothing could have deflation in February 2010,” said Rusman.

Clothing by a deflation in January 2010 of 0.2 percent. Commodities that contributed to the deflation of personal items and clothing are gold jewelry, which is 0.04 percent.