I NDONESIA T RADE & C OMMODITY F INANCE C ONFERENCE 2016 Rangga Cipta Samuel Sekuritas Indonesia
T HE BIG PICTURE – TRADE FLOWS Indonesia trade balance ($ mn) 50,000 Trade Balance 40,000 30,000 20,000 10,000 - (10,000) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: BPS, IMF Samuel Sekuritas Indonesia
T HE BIG PICTURE – FINANCIAL FLOWS Indonesia balance of payment ($ mn) 50,000 40,000 Current Account Financial Account 30,000 20,000 10,000 0 (10,000) (20,000) (30,000) (40,000) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: BPS, IMF Samuel Sekuritas Indonesia
T HE BIG PICTURE - GROWTH Growth cycle and current account 80,000 6,000 overheating zone 4,000 60,000 2,000 40,000 0 20,000 -2,000 0 -4,000 -20,000 -6,000 -40,000 -8,000 cooling down zone -60,000 -10,000 Growth Speedometer - HP Cycle Current Account ($mn) (RHS) -80,000 -12,000 Dec-00 Sep-02 Jun-04 Mar-06 Dec-07 Sep-09 Jun-11 Mar-13 Dec-14 Source: BPS, Bloomberg Samuel Sekuritas Indonesia
T HE DUTCH DISEASE Restoring competitiveness 50.00 Rupiah - REER Average (1995-2014) Rupiah - REER 60.00 The collapse of Lehman Brother 70.00 80.00 90.00 100.00 commodity boom episode Bernanke's tapering off 110.00 Jan-00 Aug-01 Mar-03 Oct-04 May-06 Nov-07 Jun-09 Jan-11 Aug-12 Mar-14 Oct-15 Source: BIS SamuelSekuritas Indonesia
S OARING EXTERNAL DEBT Indonesia external debt 450% External Debt ($), 2000=100 External Debt (Rp), 2000=100 400% 350% 300% 250% 200% 150% 100% 50% 0% Source: Bank Indonesia, MoF SamuelSekuritas Indonesia
T HE GLOBAL SECULAR STAGNATION Source: WTO
C ONNECTING THE DOTS DUTCH CAPITAL DISEASE OUTFLOWS MOUNTING GLOBAL EXTERNAL SECULAR DEBT STAGNATION ECONOMIC POLICIES
IMPOSSIBLE TRINITY Source: various
M ONETARY POLICY FRONT • Export Proceeds and Foreign Debt Withdrawal • Foreign reserves swap deals • Maintaining IDR stability • Enhancing IDR liquidity management • Advancing forex supply and demand management • Mandatory use of IDR
F ISCAL FRONT • Energy subsidy elimination • Tax amnesty • Lower tax on revaluations • Employee income tax • Industry investment taxes • Cash transfer scheme • Higher non-taxable income
T RADE FRONT • Ease regulations in the trade sector • Ease restrictions on foreign visas • Continue development of special industrial zones • Advance export-financing activities • Business regulation easing • Lower taxes for strategic sectors
GROWTH FRONT • Energy price cut • Electricity tariff cut • Continue development of special industrial zones • Advance export-financing activities • Removal of REIT double taxation • Interest rate caps
M ANDATORY USE OF IDR According to BI, the dollar transaction within the Indonesia territory reached $7 billion. BI reports that the use of dollar has been reduced due to around $3-5 billion post the mandatory use of rupiah. Macroeconomics wise, this kind of policy is just another form of soft capital control which is also implemented in many countries especially during the heavy outflows episode. The policy does reduce the dollar demand however it doesn’t change the economic fundamental in a country.
I NVESTMENT APPEAL Investment growth 40.00% 12.00% 30.00% 8.00% 20.00% 4.00% 10.00% 0.00% 0.00% -4.00% -10.00% FDI YoY - BKPM Real Investment YoY - BPS (RHS) -20.00% -8.00% Mar-11 Dec-11 Sep-12 Jun-13 Mar-14 Dec-14 Sep-15 Source: Bloomberg Samuel Sekuritas Indonesia
W AGES COMPARISON Regional Wages Comparison - 2015 ($/m) 350 300 250 200 150 100 50 0 Philippines China Thailand Malaysia Indonesia Vietnam source: World Bank SamuelSekuritas Indonesia
M INIMUM W AGES IN I NDONESIA Indonesia Minimum Wages 2000 25.0% 1800 Indonesia Minimum Wages (Rp 000'/m) YoY (RHS) 1600 20.0% 1400 1200 15.0% 1000 800 10.0% 600 400 5.0% 200 0 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 source: CEIC SamuelSekuritas Indonesia
T HE PROSPECT OF GROWTH - GOVERNMENT Government spending and growth 12.00% 20.00% Real GDP YoY Government Spending YoY (RHS) 15.00% 8.00% 10.00% 5.00% 4.00% 0.00% -5.00% 0.00% -10.00% Mar-08 May-09 Jul-10 Sep-11 Nov-12 Jan-14 Mar-15 Source: BPS, Bloomberg Samuel Sekuritas Indonesia
T HE PROSPECT OF GROWTH - PRIVATES Commodity prices, exports and investment 16.00% 100.0% Investment YoY (LHS) Indonesia Exported Commodity Index YoY 80.0% Exports YoY 12.00% 60.0% 40.0% 8.00% 20.0% 0.0% 4.00% -20.0% -40.0% 0.00% -60.0% Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Source: BPS, Bloomberg Samuel Sekuritas Indonesia
Recommend
More recommend
