The Krakatau Report 31-Mar-2019
Top 3 Company Headlines
Garuda (GIAA:IJ) cancels 49-plane Boeing 737 order ( The Jakarta Post 22-Mar)
Nebras Power QSC considers selling its stake in PT Paiton Energy (Bloomberg 27-Mar)
Grab secures US$1.46b investment from SoftBank Vision Fund (Business Times 06-Mar)
Top 3 Macro and Risk Headlines
Indonesian property stock soars 1,700% since January IPO (Business Times 11-Mar)
Australia and Indonesia Sign Free-Trade Deal (Bloomberg 04-Mar)
Indonesia threatens to quit Paris climate deal with EU over palm oil (Reuters 27-Mar)
The Krakatau's View
As presidential elections loom over Indonesia, Widoko’s populist agenda could slow down the economy, currently projected by the WB to grow at a 5.5% rate. Development of infrastructure and revival of manufacturing will pose the main challenges. A US-China trade war might help attract investment as textile and footwear companies plan to relocate supply chains abroad. A sharp rise in property stock prices raises the question of the sustainability of investment in the real estate market.
Growing environmental pressure from the EU could hurt palm oil exports. However, a new trade deal with Australia offers opportunities to boost exports in the car industry.
Fun Fact: Indonesia is opening its first underground train system in Jakarta (Bloomberg 24-Mar)