The Jakarta Globe RSS: Business http://www.thejakartaglobe.com 2013 The Jakarta Globe Your City, Your World Sun, 24 May 2015 04:00:26 +0000 en-US hourly 1 http://www.thejakartaglobe.com/images/jakarta-globe.gif http://www.thejakartaglobe.com Tanoto's April Breaks Ground on Rp 4t Paper Production Facility http://thejakartaglobe.beritasatu.com/?p=407373 Fri, 22 May 2015 19:05:21 +0700 Jakarta. Asia Pacific Resources International Limited, known as April, a management company that controls the pulp and paper businesses of the Tanoto family, held a ground-breaking ceremony for a new Rp 4 trillion ($305 million) paper production facility in Riau province on Friday. The company released a statement which said the new facility — its third — will produce high grade digital paper, designed for high-quality digital color printing. “The investment in a third paper mill facility [PM3] announced today increases our ability to meet the growing global demand for premium PaperOneTM products, April Group’s flagship paper brand," said Tony Wenas, managing director of April Group, Indonesia operation. "The project involves the deployment of new technology to enable new product diversification to meet evolving consumer demand for high-value digital paper products." Tony said. The statement added the mill, which will feature technology capable of producing paper with a speed of 1.4 kilometers per minute, will use 100 percent plantation fiber from existing sources. It will boost the group’s  production capacity to 1.15 million per year from the current 820,000 tons per, giving the company additional outputs destined for export markets. Industry Minister Saleh Husin, who attended the ground-breaking ceremony, said he was pleased to support the company’s efforts to support Indonesia’s economic growth strategies. "This investment is in line with government’s policy to promote value added export driven industry,” he said in a statement. "We hope that the manufacturing industry, like the pulp and paper industry that has a competitive advantage, can play a stronger role in boosting national development," said Saleh. According to data from the ministry, the installed capacity of the pulp industry is 7.93 million tons per year and 12.98 million per year for paper. Meanwhile, the actual output is about 6.4 million tons per year for pulp and 10.4 million tons of paper per year. Last year, Indonesia exported 3.5 million tons of pulp worth $1.72 billion and 4.35 million tons of paper with a value of $3.75 billion. GlobeAsia]]> Jakarta. Asia Pacific Resources International Limited, known as April, a management company that controls the pulp and paper businesses of the Tanoto family, held a ground-breaking ceremony for a new Rp 4 trillion ($305 million) paper production facility in Riau province on Friday. The company released a statement which said the new facility — its third — will produce high grade digital paper, designed for high-quality digital color printing. “The investment in a third paper mill facility [PM3] announced today increases our ability to meet the growing global demand for premium PaperOneTM products, April Group’s flagship paper brand," said Tony Wenas, managing director of April Group, Indonesia operation. "The project involves the deployment of new technology to enable new product diversification to meet evolving consumer demand for high-value digital paper products." Tony said. The statement added the mill, which will feature technology capable of producing paper with a speed of 1.4 kilometers per minute, will use 100 percent plantation fiber from existing sources. It will boost the group’s  production capacity to 1.15 million per year from the current 820,000 tons per, giving the company additional outputs destined for export markets. Industry Minister Saleh Husin, who attended the ground-breaking ceremony, said he was pleased to support the company’s efforts to support Indonesia’s economic growth strategies. "This investment is in line with government’s policy to promote value added export driven industry,” he said in a statement. "We hope that the manufacturing industry, like the pulp and paper industry that has a competitive advantage, can play a stronger role in boosting national development," said Saleh. According to data from the ministry, the installed capacity of the pulp industry is 7.93 million tons per year and 12.98 million per year for paper. Meanwhile, the actual output is about 6.4 million tons per year for pulp and 10.4 million tons of paper per year. Last year, Indonesia exported 3.5 million tons of pulp worth $1.72 billion and 4.35 million tons of paper with a value of $3.75 billion. GlobeAsia]]> http://thejakartaglobe.beritasatu.com/?p=407373 Defeat of Wall Street Legend Gives Corporate America a New Hero http://thejakartaglobe.beritasatu.com/?p=407490 Fri, 22 May 2015 19:00:26 +0700 ‘Hugely inspirational’ Now she’s a role model. “She had a hugely inspirational effect on CEOs to hold their ground,” said Jeffrey A. Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management. “This will be catalytic in terms of corporate governance.” Kullman, 59, grew up in Wilmington, Delaware, where Dupont is based. A mechanical engineer and the first woman to head the company, she was just out of graduate school in the mid-1980s when Peltz, 72, started doing the deals that made his first fortune. They were leveraged buyouts financed by high-yield bonds sold by Drexel Burnham Lambert’s Michael Milken, an investing style written about in “Barbarians at the Gate.” Her push-back against Peltz’s break-up argument was that the integration of various businesses – from crop seeds to auto plastics – is key to DuPont’s success. Dismantling the company would weaken the research-and-development engine, the source of DuPont’s future sales. ‘Financial engineering’ Kullman deserves credit for standing up for the research program, said Arnold Holtzman, a retired DuPont scientist. He said having access to fundamental research was crucial in his work, which included developing the tiny balloons used to open arteries in coronary angioplasty. DuPont inventions, from nylon to kevlar, changed lives, and Peltz’s plan threatened the company’s capability to do that in the future, Holtzman, 83, said. “You wouldn’t have the large research and the interaction among the various parts of the company. There wouldn’t be any new initiatives, and certainly not any new science.” Delaware Governor Jack Markell echoed those sentiments on on his blog, warning before the annual meeting about the activist investor plan to boost earnings with financial maneuvers rather than investing in product development. “This sort of short-term financial engineering is designed to create quick returns – not long-term value for workers, shareholders, and communities.” Shedding assets After months of criticism, Peltz’s Trian Fund Management nominated four directors for DuPont in January. Kullman made it clear in February she wasn’t going to settle because she wouldn’t accede to Peltz’s insistence he join the board. The fight went to the wire. Trian employed 175 people on its campaign, while DuPont had 200 making phone calls, mailing information and running websites. DuPont rose 0.4 percent to close at $70.98 in New York. Even as she rejected Trian’s call for steep cost cuts and a split, Kullman was making changes to DuPont’s portfolio, selling the auto-paint unit and moving ahead with the spinoff of the commodity-chemicals segment. Shedding those assets will leave DuPont to focus on businesses with steadier earnings, such as agriculture and food ingredients. “She didn’t make friends doing that,” Yale’s Sonnenfeld said. “But sometimes it’s the people who are closest to the soul of the business that know how to make the changes, separating the barnacles from the boat.” Anchoring companies Kevin Walkush, a fund manager who helps manage $6.7 billion at Jensen Investment Management, said Kullman and her team visited his Oregon offices in February. She helped convince him that Trian’s plan to boost the share price could have “hobbled the company” longer term. “The strength of her as the leader through this process really came through,” Walkush said. Jensen voted its 1.87 million shares for the DuPont incumbents. At CalPERS, Simpson said Peltz’s defeat “shows that owners, if they step up and behave like owners, can keep companies anchored in the long term.” “We don’t want barbarians at the gate,” she added. “We want owners at the gate.” Bloomberg]]> ‘Hugely inspirational’ Now she’s a role model. “She had a hugely inspirational effect on CEOs to hold their ground,” said Jeffrey A. Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management. “This will be catalytic in terms of corporate governance.” Kullman, 59, grew up in Wilmington, Delaware, where Dupont is based. A mechanical engineer and the first woman to head the company, she was just out of graduate school in the mid-1980s when Peltz, 72, started doing the deals that made his first fortune. They were leveraged buyouts financed by high-yield bonds sold by Drexel Burnham Lambert’s Michael Milken, an investing style written about in “Barbarians at the Gate.” Her push-back against Peltz’s break-up argument was that the integration of various businesses – from crop seeds to auto plastics – is key to DuPont’s success. Dismantling the company would weaken the research-and-development engine, the source of DuPont’s future sales. ‘Financial engineering’ Kullman deserves credit for standing up for the research program, said Arnold Holtzman, a retired DuPont scientist. He said having access to fundamental research was crucial in his work, which included developing the tiny balloons used to open arteries in coronary angioplasty. DuPont inventions, from nylon to kevlar, changed lives, and Peltz’s plan threatened the company’s capability to do that in the future, Holtzman, 83, said. “You wouldn’t have the large research and the interaction among the various parts of the company. There wouldn’t be any new initiatives, and certainly not any new science.” Delaware Governor Jack Markell echoed those sentiments on on his blog, warning before the annual meeting about the activist investor plan to boost earnings with financial maneuvers rather than investing in product development. “This sort of short-term financial engineering is designed to create quick returns – not long-term value for workers, shareholders, and communities.” Shedding assets After months of criticism, Peltz’s Trian Fund Management nominated four directors for DuPont in January. Kullman made it clear in February she wasn’t going to settle because she wouldn’t accede to Peltz’s insistence he join the board. The fight went to the wire. Trian employed 175 people on its campaign, while DuPont had 200 making phone calls, mailing information and running websites. DuPont rose 0.4 percent to close at $70.98 in New York. Even as she rejected Trian’s call for steep cost cuts and a split, Kullman was making changes to DuPont’s portfolio, selling the auto-paint unit and moving ahead with the spinoff of the commodity-chemicals segment. Shedding those assets will leave DuPont to focus on businesses with steadier earnings, such as agriculture and food ingredients. “She didn’t make friends doing that,” Yale’s Sonnenfeld said. “But sometimes it’s the people who are closest to the soul of the business that know how to make the changes, separating the barnacles from the boat.” Anchoring companies Kevin Walkush, a fund manager who helps manage $6.7 billion at Jensen Investment Management, said Kullman and her team visited his Oregon offices in February. She helped convince him that Trian’s plan to boost the share price could have “hobbled the company” longer term. “The strength of her as the leader through this process really came through,” Walkush said. Jensen voted its 1.87 million shares for the DuPont incumbents. At CalPERS, Simpson said Peltz’s defeat “shows that owners, if they step up and behave like owners, can keep companies anchored in the long term.” “We don’t want barbarians at the gate,” she added. “We want owners at the gate.” Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407490 Proposed Ban on Cigarette TV Ads Hits Stocks of Indonesian Media Firms http://thejakartaglobe.beritasatu.com/?p=407478 Fri, 22 May 2015 18:47:39 +0700 Jakarta. Shares of Indonesian television operators have fallen over the past week due to a proposed ban on cigarette advertising on television that puts at risk a market estimated to be worth nearly $300 million last year. Local media last week cited Mahfudz Siddiq, a parliament commission head, as saying the commission hoped to finish discussing by August an amended broadcasting law that would enforce the ban. Government officials could not be contacted by Reuters. Over the past six sessions, shares of Surya Citra Media, Media Nusantara Citra and Visi Media Asia have posted an average drop of 2.9 percent. The broader Jakarta stock exchange rose 1.3 percent over that period. The cigarette industry spent an estimated Rp 3.6 trillion ($274 million) on television advertising last year, according to research firm Nielsen. The big Indonesian cigarette makers include Hanjaya Mandala Sampoerna, Gudang Garam, Wismilak Inti Makmur and Djarum Group. "The ban is expected to be implemented and once it is implemented it will have an adverse impact on ad spending. The government has been very negative on the cigarette sector [because of the health risks]," said Harry Su, head of research at Bahana Securities. Other consumer companies have been cutting back marketing expenses due to the slowing economy, so it may be difficult for the broadcasters to find a substitute for any lost advertising revenue from the cigarette makers, Su said. Cigarette advertisements contribute 6 percent to 7 percent to Surya Citra's total advertisement sales, Corporate Secretary Hardijanto Saroso told Reuters. Cigarette companies also sponsor several popular but expensive television programmes such as soccer tournaments on Surya Citra's television channel SCTV, Saroso said. Visi Media Asia is waiting for clarity on the regulation, but the operator of TVOne and ANTV channels has been stepping up efforts to get advertising dollars from companies that sell sports products or motorbikes, Director David Burke told Reuters. Reuters]]> Jakarta. Shares of Indonesian television operators have fallen over the past week due to a proposed ban on cigarette advertising on television that puts at risk a market estimated to be worth nearly $300 million last year. Local media last week cited Mahfudz Siddiq, a parliament commission head, as saying the commission hoped to finish discussing by August an amended broadcasting law that would enforce the ban. Government officials could not be contacted by Reuters. Over the past six sessions, shares of Surya Citra Media, Media Nusantara Citra and Visi Media Asia have posted an average drop of 2.9 percent. The broader Jakarta stock exchange rose 1.3 percent over that period. The cigarette industry spent an estimated Rp 3.6 trillion ($274 million) on television advertising last year, according to research firm Nielsen. The big Indonesian cigarette makers include Hanjaya Mandala Sampoerna, Gudang Garam, Wismilak Inti Makmur and Djarum Group. "The ban is expected to be implemented and once it is implemented it will have an adverse impact on ad spending. The government has been very negative on the cigarette sector [because of the health risks]," said Harry Su, head of research at Bahana Securities. Other consumer companies have been cutting back marketing expenses due to the slowing economy, so it may be difficult for the broadcasters to find a substitute for any lost advertising revenue from the cigarette makers, Su said. Cigarette advertisements contribute 6 percent to 7 percent to Surya Citra's total advertisement sales, Corporate Secretary Hardijanto Saroso told Reuters. Cigarette companies also sponsor several popular but expensive television programmes such as soccer tournaments on Surya Citra's television channel SCTV, Saroso said. Visi Media Asia is waiting for clarity on the regulation, but the operator of TVOne and ANTV channels has been stepping up efforts to get advertising dollars from companies that sell sports products or motorbikes, Director David Burke told Reuters. Reuters]]> http://thejakartaglobe.beritasatu.com/?p=407478 UBS’s ‘Godfather of Leniency’ Made One Offer Fraud Cops Refused http://thejakartaglobe.beritasatu.com/?p=407473 Fri, 22 May 2015 18:42:51 +0700 Switzerland's national flag flies over a logo of Swiss bank UBS in Zurich in this June 12, 2013 file photo.(Reuters Photo/Arnd Wiegmann) Switzerland's national flag flies over a logo of Swiss bank UBS in Zurich in this June 12, 2013 file photo.(Reuters Photo/Arnd Wiegmann)[/caption] UBS Group, in its bid to escape US criminal charges of manipulating currency markets, turned to “the godfather of leniency.” As a Justice Department prosecutor in the early 1990s, Gary Spratling spearheaded a program that encouraged wrongdoers to admit to collusion to escape prosecution. Now UBS’s lawyer, Spratling played the leniency card in an effort to keep the Swiss bank from having to take a guilty plea. The plan came up short. The bank escaped criminal charges this week over currency-rigging. Yet its main unit was forced to plead guilty to manipulating interest rates – charges the Justice Department had first leveled against the bank more than two years ago. The split decision reflected in part competing interests within the Justice Department – between its antitrust unit, which can grant immunity to build big cases, and its criminal division, which wasn’t willing to let UBS off the hook in the interest-rate probe. The prosecutors there refused to budge despite appeals by UBS lawyers to progressively more senior officials. “We want to send the message that this is not a cost of doing business,” Assistant Attorney General Leslie Caldwell said in an interview. “Pretty easy” Caldwell, who heads the criminal division, said that the decision to charge UBS under the previous settlement was “pretty easy,” given that UBS had three previous criminal matters in recent years. She was referring to cases involving interest-rate manipulation, bid-rigging of municipal investment contracts, and aiding tax evasion by wealthy Americans. Joseph Warin, one of the UBS lawyers involved in the talks, said he was surprised to hear Caldwell’s comments, which contradicted what they were “told during the negotiations, which was that the policy considerations were difficult to balance and the decision was challenging for the division to make.” UBS was among six of the world’s biggest banks that agreed Wednesday to pay more than $5 billion to US authorities in prosecutors’ toughest stand yet in their multiyear pursuit of collusion in financial markets. The Zurich-based company’s path to a guilty plea, based on accounts from several people familiar with the negotiations, can be traced back some 20 years. That’s when Spratling was tapped to revive a moribund amnesty program, which was supposed to encourage companies to confess cartel behavior. Rat out Spratling, 72, who started at the Justice Department in San Francisco in the early 1970s, rewrote the program’s guidelines to ensure that the first companies to approach authorities to confess to antitrust behavior — and rat out other participants — would be guaranteed immunity from antitrust prosecution and escape fines. Those who didn’t step forward would be hit with stiff penalties. “It’s sort of the white-collar version of what happens in prisons all over America – where people who are locked up compete in snitching on one another to reduce their sentence,” said Patrick O’Donnell, a defense lawyer at Harris, Wiltshire & Grannis in Washington. It worked. The program has since led to prosecutions involving vitamins, auto parts, art auctions and municipal-bond investments, and is now being used to prosecute the world’s biggest banks. In 2000, after nearly three decades at the Justice Department, Spratling joined Gibson, Dunn & Crutcher. The lawyer – who gained the “godfather” moniker from colleagues in the legal bar – took his antitrust chops to defend companies and guide them through the leniency process. Won leniency Among them was UBS, which approached the government with information that its traders were conspiring to rig the London interbank offered rate, known as Libor, used as a benchmark for interest rates. UBS was rewarded for talking, at least in part. Along with Barclays, UBS won leniency from antitrust charges and settled in December 2012. Its Japanese subsidiary was forced to plead guilty to one count of wire fraud. The settlement subjected the bank to a so-called non- prosecution deal with the Justice Department. Similar to probation, the agreement withheld charges as long as UBS abstained from criminal activity. That was soon tested. In 2013, UBS executives learned about traders colluding to fix currency rates after reading an article, according to the Justice Department. A risk That September, Spratling again deployed his immunity defense, seeking leniency from antitrust prosecutors in exchange for telling all. There was a risk: UBS lawyers knew that a repeat offense could cause the government to void the Libor settlement and charge the bank for the past conduct. That would have been unprecedented, and UBS’s lawyers doubted it would actually happen, one of the people said. In March, Caldwell, the criminal division chief, delivered a warning shot: She said the department wouldn’t hesitate to punish repeat offenders by tearing up these deals and charging companies for past misconduct. In April, Gibson Dunn lawyers gave a presentation to a team of prosecutors from the criminal division, headed by Benjamin Singer, the deputy chief of fraud. Held accountable The thrust of their argument: First, UBS’s cooperation had helped bolster the antitrust division’s case against the other banks. Senior UBS executives also weren’t aware of the currency-trading misconduct when the bank agreed to the Libor settlement in 2012. Finally, the bank was under new management, which was fully committed to compliance. Singer wasn’t swayed. He recommended that the bank be held accountable for its violation of the non-prosecution agreement. UBS’s team, led by Spratling, Warin, D. Jarrett Arp and David Burns, took its case up the line. They appealed to Singer’s boss, Andrew Weissmann, chief of the fraud section. An initial meeting focused on how much UBS had improved its compliance program. At that meeting, the Gibson Dunn lawyers walked Weissmann’s team through the reforms the bank had undertaken to improve UBS’s internal compliance programs. The presentation was going well, until a member of the government team asked why UBS’s compliance people hadn’t discovered the problems in foreign-exchange trading sooner, said a person familiar with the matter. That market wasn’t regulated, a member of the UBS team explained, so the compliance people didn’t spend much time focusing on that part of the business. To the prosecutors, the response fell flat. Voluntary disclosure A few days later, UBS lawyers met with Weissmann’s team again to make their case. Weissmann remained skeptical, siding with Singer in favor of tearing up the agreement. While the bank’s lawyers touted their voluntary disclosure of wrongdoing, the prosecutors believed the bank had a legal obligation under the non-prosecution agreement to disclose the conduct and didn’t deserve to be rewarded for doing so. The UBS team appealed once again, this time on May 4 to Caldwell. She listened to their pitch intently and asked occasional questions. On May 8, UBS got its answer: Weissmann told the Gibson Dunn team that Caldwell had decided against the bank. The UBS lawyers made a last-ditch appeal, this time to Deputy Attorney General Sally Quillian Yates, the department’s No. 2 official. She declined to meet with them. The bank had lost. New standard “UBS has taken responsibility for our past conduct, but any suggestion that UBS is worse than our peers is clearly not supported by the facts,” said Karina Byrne, a UBS spokeswoman. “Despite our full cooperation and our repeated attempts to address industry issues early and proactively, we have been held to this new standard.” UBS lawyers remain convinced their decision to seek leniency was correct. Without it, UBS would have been charged twice, for an antitrust violation in the currency case and for fraud over Libor. It probably would have paid a much higher penalty, one of the people said. Spratling and his team are moving on, guiding UBS through the next investigation that may snag other banks: precious-metals trading. UBS is cooperating with prosecutors in that investigation, and the Gibson Dunn team has won assurances that the bank won’t be charged by the criminal division, according to court documents made public as part of the currency settlement. That’s the legacy of the leniency program Spratling designed: generating new areas of inquiry as companies bring misconduct to prosecutors in hopes of reduced penalties, according to Douglas Tween, a lawyer at Baker & McKenzie in New York. “You’re giving companies an extraordinary incentive if they’re caught up in a case and they’re too late to get amnesty, to go out and find a new conspiracy,” Tween said. Bloomberg]]> Switzerland's national flag flies over a logo of Swiss bank UBS in Zurich in this June 12, 2013 file photo.(Reuters Photo/Arnd Wiegmann) Switzerland's national flag flies over a logo of Swiss bank UBS in Zurich in this June 12, 2013 file photo.(Reuters Photo/Arnd Wiegmann)[/caption] UBS Group, in its bid to escape US criminal charges of manipulating currency markets, turned to “the godfather of leniency.” As a Justice Department prosecutor in the early 1990s, Gary Spratling spearheaded a program that encouraged wrongdoers to admit to collusion to escape prosecution. Now UBS’s lawyer, Spratling played the leniency card in an effort to keep the Swiss bank from having to take a guilty plea. The plan came up short. The bank escaped criminal charges this week over currency-rigging. Yet its main unit was forced to plead guilty to manipulating interest rates – charges the Justice Department had first leveled against the bank more than two years ago. The split decision reflected in part competing interests within the Justice Department – between its antitrust unit, which can grant immunity to build big cases, and its criminal division, which wasn’t willing to let UBS off the hook in the interest-rate probe. The prosecutors there refused to budge despite appeals by UBS lawyers to progressively more senior officials. “We want to send the message that this is not a cost of doing business,” Assistant Attorney General Leslie Caldwell said in an interview. “Pretty easy” Caldwell, who heads the criminal division, said that the decision to charge UBS under the previous settlement was “pretty easy,” given that UBS had three previous criminal matters in recent years. She was referring to cases involving interest-rate manipulation, bid-rigging of municipal investment contracts, and aiding tax evasion by wealthy Americans. Joseph Warin, one of the UBS lawyers involved in the talks, said he was surprised to hear Caldwell’s comments, which contradicted what they were “told during the negotiations, which was that the policy considerations were difficult to balance and the decision was challenging for the division to make.” UBS was among six of the world’s biggest banks that agreed Wednesday to pay more than $5 billion to US authorities in prosecutors’ toughest stand yet in their multiyear pursuit of collusion in financial markets. The Zurich-based company’s path to a guilty plea, based on accounts from several people familiar with the negotiations, can be traced back some 20 years. That’s when Spratling was tapped to revive a moribund amnesty program, which was supposed to encourage companies to confess cartel behavior. Rat out Spratling, 72, who started at the Justice Department in San Francisco in the early 1970s, rewrote the program’s guidelines to ensure that the first companies to approach authorities to confess to antitrust behavior — and rat out other participants — would be guaranteed immunity from antitrust prosecution and escape fines. Those who didn’t step forward would be hit with stiff penalties. “It’s sort of the white-collar version of what happens in prisons all over America – where people who are locked up compete in snitching on one another to reduce their sentence,” said Patrick O’Donnell, a defense lawyer at Harris, Wiltshire & Grannis in Washington. It worked. The program has since led to prosecutions involving vitamins, auto parts, art auctions and municipal-bond investments, and is now being used to prosecute the world’s biggest banks. In 2000, after nearly three decades at the Justice Department, Spratling joined Gibson, Dunn & Crutcher. The lawyer – who gained the “godfather” moniker from colleagues in the legal bar – took his antitrust chops to defend companies and guide them through the leniency process. Won leniency Among them was UBS, which approached the government with information that its traders were conspiring to rig the London interbank offered rate, known as Libor, used as a benchmark for interest rates. UBS was rewarded for talking, at least in part. Along with Barclays, UBS won leniency from antitrust charges and settled in December 2012. Its Japanese subsidiary was forced to plead guilty to one count of wire fraud. The settlement subjected the bank to a so-called non- prosecution deal with the Justice Department. Similar to probation, the agreement withheld charges as long as UBS abstained from criminal activity. That was soon tested. In 2013, UBS executives learned about traders colluding to fix currency rates after reading an article, according to the Justice Department. A risk That September, Spratling again deployed his immunity defense, seeking leniency from antitrust prosecutors in exchange for telling all. There was a risk: UBS lawyers knew that a repeat offense could cause the government to void the Libor settlement and charge the bank for the past conduct. That would have been unprecedented, and UBS’s lawyers doubted it would actually happen, one of the people said. In March, Caldwell, the criminal division chief, delivered a warning shot: She said the department wouldn’t hesitate to punish repeat offenders by tearing up these deals and charging companies for past misconduct. In April, Gibson Dunn lawyers gave a presentation to a team of prosecutors from the criminal division, headed by Benjamin Singer, the deputy chief of fraud. Held accountable The thrust of their argument: First, UBS’s cooperation had helped bolster the antitrust division’s case against the other banks. Senior UBS executives also weren’t aware of the currency-trading misconduct when the bank agreed to the Libor settlement in 2012. Finally, the bank was under new management, which was fully committed to compliance. Singer wasn’t swayed. He recommended that the bank be held accountable for its violation of the non-prosecution agreement. UBS’s team, led by Spratling, Warin, D. Jarrett Arp and David Burns, took its case up the line. They appealed to Singer’s boss, Andrew Weissmann, chief of the fraud section. An initial meeting focused on how much UBS had improved its compliance program. At that meeting, the Gibson Dunn lawyers walked Weissmann’s team through the reforms the bank had undertaken to improve UBS’s internal compliance programs. The presentation was going well, until a member of the government team asked why UBS’s compliance people hadn’t discovered the problems in foreign-exchange trading sooner, said a person familiar with the matter. That market wasn’t regulated, a member of the UBS team explained, so the compliance people didn’t spend much time focusing on that part of the business. To the prosecutors, the response fell flat. Voluntary disclosure A few days later, UBS lawyers met with Weissmann’s team again to make their case. Weissmann remained skeptical, siding with Singer in favor of tearing up the agreement. While the bank’s lawyers touted their voluntary disclosure of wrongdoing, the prosecutors believed the bank had a legal obligation under the non-prosecution agreement to disclose the conduct and didn’t deserve to be rewarded for doing so. The UBS team appealed once again, this time on May 4 to Caldwell. She listened to their pitch intently and asked occasional questions. On May 8, UBS got its answer: Weissmann told the Gibson Dunn team that Caldwell had decided against the bank. The UBS lawyers made a last-ditch appeal, this time to Deputy Attorney General Sally Quillian Yates, the department’s No. 2 official. She declined to meet with them. The bank had lost. New standard “UBS has taken responsibility for our past conduct, but any suggestion that UBS is worse than our peers is clearly not supported by the facts,” said Karina Byrne, a UBS spokeswoman. “Despite our full cooperation and our repeated attempts to address industry issues early and proactively, we have been held to this new standard.” UBS lawyers remain convinced their decision to seek leniency was correct. Without it, UBS would have been charged twice, for an antitrust violation in the currency case and for fraud over Libor. It probably would have paid a much higher penalty, one of the people said. Spratling and his team are moving on, guiding UBS through the next investigation that may snag other banks: precious-metals trading. UBS is cooperating with prosecutors in that investigation, and the Gibson Dunn team has won assurances that the bank won’t be charged by the criminal division, according to court documents made public as part of the currency settlement. That’s the legacy of the leniency program Spratling designed: generating new areas of inquiry as companies bring misconduct to prosecutors in hopes of reduced penalties, according to Douglas Tween, a lawyer at Baker & McKenzie in New York. “You’re giving companies an extraordinary incentive if they’re caught up in a case and they’re too late to get amnesty, to go out and find a new conspiracy,” Tween said. Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407473 Greece Submerges as Crisis Fallout Worse Than Emerging Markets http://thejakartaglobe.beritasatu.com/?p=407458 Fri, 22 May 2015 18:06:51 +0700 Greek Finance Minister Yanis Varoufakis delivers a speech during an economic conference in Athens, Greece May 19, 2015.  (Reuters Photo/Alkis Konstantinidis) Greek Finance Minister Yanis Varoufakis delivers a speech during an economic conference in Athens, Greece May 19, 2015. (Reuters Photo/Alkis Konstantinidis)[/caption] The Greek economy risks being more a submerging market than an emerging market. As another round of aid talks between the Mediterranean nation and its creditors ends without a deal, its economy is faring even worse than a string of developing countries which suffered traumas in the last two decades. That leaves Commerzbank declaring the country is in little position to pare its debt and that default or a restructuring may loom. “Just as with emerging markets in the past there is a point in time where you need to move on to the next stage rather than being paralyzed,” Simon Quijano-Evans, head of emerging market research at Commerzbank in London, said in a telephone interview. “In Greece, we need to think of next steps and be innovative.” To illustrate Greece’s pain, he published a report this month comparing how the economic fallout from its five-year-old crisis compared with the bouts of turmoil suffered in the last two decades by Turkey, Argentina, Latvia and Thailand. The result illustrates why Commerzbank sees a 50 percent chance of Greece ultimately leaving the euro area. While Athens has imposed the tightest fiscal squeeze of the five and pushed its budget balance excluding interest payments into surplus from a deficit of about 10 percent of gross domestic product in 2009, Turkey and Argentina were doing better at the same stage. Mounting debt Even worse, debt of around 175 percent of GDP is bigger than the 110 percent at the outset and surpasses those of all the other crisis-hit economies five years on. Turkey managed to cut its debt to 35 percent from 100 percent without defaulting. The amount of lost output is also bigger in Greece than the other economies, all of which had begun to recover by now, and its 25 percent unemployment is higher. The International Monetary Fund estimates the Greek economy will be 20 percent smaller this year than in 2009. To Quijano-Evans, such data reflect how Greece’s economy failed to improve with assistance and austerity. It also demonstrates the challenge of trying to revive an economy without a currency of its own. “Under normal circumstances, if a country adjusts its fiscal backdrop in a meaningful way and allows its exchange rate to float freely, one eventually sees that passing through into a stronger economic picture, coupled with a drop in debt/GDP,” said Quijano-Evans. Absent a return of a devalued drachma, Greece needs a bigger budget buffer as well as meaningful acceleration in economic growth and inflation if its debts are to be made sustainable, he said. Unfortunately, the economy is back in recession, consumer prices fell an annual 1.8 percent last month and politicians are at loggerheads with the international community. “Comparing Greece’s experience so far with that of EM crisis countries shows very simply that the country’s already stressed economy and electorate are unable to cope with more pain,” said the Commerzbank economist. Bloomberg]]> Greek Finance Minister Yanis Varoufakis delivers a speech during an economic conference in Athens, Greece May 19, 2015.  (Reuters Photo/Alkis Konstantinidis) Greek Finance Minister Yanis Varoufakis delivers a speech during an economic conference in Athens, Greece May 19, 2015. (Reuters Photo/Alkis Konstantinidis)[/caption] The Greek economy risks being more a submerging market than an emerging market. As another round of aid talks between the Mediterranean nation and its creditors ends without a deal, its economy is faring even worse than a string of developing countries which suffered traumas in the last two decades. That leaves Commerzbank declaring the country is in little position to pare its debt and that default or a restructuring may loom. “Just as with emerging markets in the past there is a point in time where you need to move on to the next stage rather than being paralyzed,” Simon Quijano-Evans, head of emerging market research at Commerzbank in London, said in a telephone interview. “In Greece, we need to think of next steps and be innovative.” To illustrate Greece’s pain, he published a report this month comparing how the economic fallout from its five-year-old crisis compared with the bouts of turmoil suffered in the last two decades by Turkey, Argentina, Latvia and Thailand. The result illustrates why Commerzbank sees a 50 percent chance of Greece ultimately leaving the euro area. While Athens has imposed the tightest fiscal squeeze of the five and pushed its budget balance excluding interest payments into surplus from a deficit of about 10 percent of gross domestic product in 2009, Turkey and Argentina were doing better at the same stage. Mounting debt Even worse, debt of around 175 percent of GDP is bigger than the 110 percent at the outset and surpasses those of all the other crisis-hit economies five years on. Turkey managed to cut its debt to 35 percent from 100 percent without defaulting. The amount of lost output is also bigger in Greece than the other economies, all of which had begun to recover by now, and its 25 percent unemployment is higher. The International Monetary Fund estimates the Greek economy will be 20 percent smaller this year than in 2009. To Quijano-Evans, such data reflect how Greece’s economy failed to improve with assistance and austerity. It also demonstrates the challenge of trying to revive an economy without a currency of its own. “Under normal circumstances, if a country adjusts its fiscal backdrop in a meaningful way and allows its exchange rate to float freely, one eventually sees that passing through into a stronger economic picture, coupled with a drop in debt/GDP,” said Quijano-Evans. Absent a return of a devalued drachma, Greece needs a bigger budget buffer as well as meaningful acceleration in economic growth and inflation if its debts are to be made sustainable, he said. Unfortunately, the economy is back in recession, consumer prices fell an annual 1.8 percent last month and politicians are at loggerheads with the international community. “Comparing Greece’s experience so far with that of EM crisis countries shows very simply that the country’s already stressed economy and electorate are unable to cope with more pain,” said the Commerzbank economist. Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407458 Jakarta to Host 2015 New Cities Summit in June http://thejakartaglobe.beritasatu.com/?p=407436 Fri, 22 May 2015 18:01:58 +0700 Jakarta. Jakarta will host the annual New Cities Summit 2015 next month, drawing urban leaders and thinkers from all around the world to discuss issues faced by world's cities. The summit, which will be held in Asia for the first time, will run from June 9 to 11 at Ciputra Artpreneur, South Jakarta, gathering as much as 800 attendants to discuss the future of cities, according to a statement to GlobeAsia on Friday. Under the theme "Seizing the Urban Moment: Cities at the Heart of Growth and Development," the New Cities Summit 2015 will showcase 10 business and community leaders — including representatives from two Jakarta-based companies — to speak on topics ranging from waste management to cycle safety. “We know these speakers will inspire our Summit audience with their originality and drive to improve cities,” Naureen Kabir, director of innovation and research at the New Cities Foundation, said in the statement. “In turn, the Summit is an unparalleled platform for the WhatWorks projects to be developed, scaled and replicated for the benefit of Jakarta and other cities worldwide," she added, referring to the foundation's global innovator community that has undertaken over 40 projects. Etienne Turpin, a co-principal investigator for community-led flood alerts campaign PetaJakarta, and Nadiem Makarim, the chief executive of motorcycle jockey booking app Go-Jek, are among the speakers for the summit, discussing topics on flood mitigation and traffic congestion. Other speakers include Tomi Alakoski, founder and executive director of Finland's Me & My City; Emily Brook, CEO and founder of London-based Blaze; Rose Broom, co-founder and CEO of San Francisco-based HandUp and Prashant Mehra, founder of India's I Got Garbage. Several scholars and government leaders are also slated to speak, including Jakarta Governor Basuki Tjahaja Purnama and Nobel prize recipient Muhammad Yunus, the founder of Bangladesh's microfinance organization Grameen Bank. First held three years ago in Paris, the annual New Cities Summit was held in Dallas, the United States, last year and Sao Paulo, Brazil, in 2013. The Jakarta Globe, GlobeAsia and Beritasatu Media Group are media partners of the Jakarta summit. GlobeAsia]]> Jakarta. Jakarta will host the annual New Cities Summit 2015 next month, drawing urban leaders and thinkers from all around the world to discuss issues faced by world's cities. The summit, which will be held in Asia for the first time, will run from June 9 to 11 at Ciputra Artpreneur, South Jakarta, gathering as much as 800 attendants to discuss the future of cities, according to a statement to GlobeAsia on Friday. Under the theme "Seizing the Urban Moment: Cities at the Heart of Growth and Development," the New Cities Summit 2015 will showcase 10 business and community leaders — including representatives from two Jakarta-based companies — to speak on topics ranging from waste management to cycle safety. “We know these speakers will inspire our Summit audience with their originality and drive to improve cities,” Naureen Kabir, director of innovation and research at the New Cities Foundation, said in the statement. “In turn, the Summit is an unparalleled platform for the WhatWorks projects to be developed, scaled and replicated for the benefit of Jakarta and other cities worldwide," she added, referring to the foundation's global innovator community that has undertaken over 40 projects. Etienne Turpin, a co-principal investigator for community-led flood alerts campaign PetaJakarta, and Nadiem Makarim, the chief executive of motorcycle jockey booking app Go-Jek, are among the speakers for the summit, discussing topics on flood mitigation and traffic congestion. Other speakers include Tomi Alakoski, founder and executive director of Finland's Me & My City; Emily Brook, CEO and founder of London-based Blaze; Rose Broom, co-founder and CEO of San Francisco-based HandUp and Prashant Mehra, founder of India's I Got Garbage. Several scholars and government leaders are also slated to speak, including Jakarta Governor Basuki Tjahaja Purnama and Nobel prize recipient Muhammad Yunus, the founder of Bangladesh's microfinance organization Grameen Bank. First held three years ago in Paris, the annual New Cities Summit was held in Dallas, the United States, last year and Sao Paulo, Brazil, in 2013. The Jakarta Globe, GlobeAsia and Beritasatu Media Group are media partners of the Jakarta summit. GlobeAsia]]> http://thejakartaglobe.beritasatu.com/?p=407436 Yellen Haunted by Taper Tantrum as Fed Rate Rise Draws Closer http://thejakartaglobe.beritasatu.com/?p=407443 Fri, 22 May 2015 17:58:23 +0700 Federal Reserve Chair Janet Yellen arrives at a meeting of the Financial Stability Oversight Council (FSOC) at the Treasury Department in Washington May 19, 2015. (Reuters Photo/Carlos Barria) Federal Reserve Chair Janet Yellen arrives at a meeting of the Financial Stability Oversight Council (FSOC) at the Treasury Department in Washington May 19, 2015. (Reuters Photo/Carlos Barria)[/caption] Janet Yellen is haunted by the taper tantrum as the Federal Reserve lays the groundwork for its first interest-rate increase in almost a decade. Chair Yellen and her colleagues are fretting that bond yields near record lows could surge once the Fed starts raising rates, according to minutes of their April meeting released this week. Higher costs of everything from mortgages to car loans could result, potentially putting the fragile economic recovery at risk. Yellen has seen this movie before. In 2013, when then-Chairman Ben S. Bernanke suggested that the Fed could start tapering a bond-buying program intended to stimulate the economy, Treasury yields jumped. A replay could prompt the Fed to pursue a more gradual tightening path, said Gennadiy Goldberg, US strategist at TD Securities USA LLC in New York. “It could really be a concern for them that maybe they shouldn’t hike as quickly or as much if we do get a taper-tantrum-like scenario, where some of the tightening is done for them by a massive market readjustment,” Goldberg said. “I don’t think it will change the timing for the first rate hike,” he said, “but the pace of future hikes, yeah.” Changes in the structure of the Treasury market could exaggerate the reaction to a rate increase, Fed officials said at last month’s meeting. Strategist have cited reduced liquidity as one catalyst for increased volatility. June meeting Most Fed officials have said they are likely to raise rates this year, though they haven’t specified precisely when. At their April meeting, officials said only that conditions for a rate rise probably won’t fall into pace by their next meeting in June, the minutes showed. Economists expect an increase in September, according to a Bloomberg survey. How markets react when they do finally tighten is a source of concern for Fed officials, who have kept the benchmark federal funds rate near zero since December 2008. Expectations that the Fed will continue its easy money policies have helped keep Treasury yields low. The 10-year note yielded 2.19 percent late Thursday, and it has averaged 1.99 percent this year. “Policy makers highlighted possible risks related to the low level of term premiums,” or the extra compensation investors demand for holding long-term bonds, the minutes showed. Officials noted that it’s possible that those levels could “rise sharply -- in a manner similar to the increase observed in the spring and summer of 2013” during the so-called taper tantrum. At the meeting, officials said preparing markets for a rate rise could reduce the fallout. Careful communications “Careful committee communications regarding its policy intentions could help damp any resulting increase in market volatility around the time of the commencement of normalization,” some officials said, according to the minutes. Yellen has already sounded warning signals. Responding to questions at a May 6 forum in Washington, she said both stocks and bonds are richly valued. “Long-term interest rates are at very low levels,” Yellen said. “We could see a sharp jump in long-term rates” after liftoff, she said. Stocks and Treasuries fell on her comments. The challenge for the Fed is cooling off markets without sowing panic, said Lori Heinel, chief portfolio strategist at the investment management unit of State Street Corp. “We know that in the past when they’ve talked about raising rates we’ve seen sharp sell-offs in bond markets,” she said. Assurances dropped The Fed has also sought to prepare markets by dropping assurances that interest rates will stay low, stressing instead that they could be raised at any meeting, depending on how economic data unfold. The central bank in April repeated that it will tighten when it sees further improvement in the labor market and is “reasonably confident” inflation will move back up to its 2 percent goal in the medium term. Reduced liquidity in the Treasury market could exaggerate the reaction to a rate increase, Fed officials said at last month’s meeting. Liquidity may have declined because regulations put into effect in the wake of the 2008 financial crisis have made it costly for banks to hold large inventories of bonds on their balance sheets. Concerns over illiquidity in the Treasury market in particular were magnified after Treasury yield fluctuated by almost 0.4 percentage point on Oct. 15. Volatility index The Bank of America Merrill Lynch’s MOVE Index, a measure of expected Treasury-market volatility, reached 90.99 on May 6, the highest level since March 3, and was at 86.11 on Thursday. “The Fed can’t change that the structure of the market has changed,” said Tim Paulson, fixed-income investment strategist at Lord Abbett & Co. in Jersey City, New Jersey, which has $139.1 billion in assets under management. “But what is important is that they acknowledged it, and that’s significant.” Discussions of bond-market volatility and financial stability more broadly show that policy makers are watching more than just unemployment and inflation as they consider when to raise rates. “Financial stability has essentially become a third mandate for the Federal Reserve,” Jim Bianco, president of Bianco Research LLC in Chicago, wrote in a research note published on Thursday. Bloomberg]]> Federal Reserve Chair Janet Yellen arrives at a meeting of the Financial Stability Oversight Council (FSOC) at the Treasury Department in Washington May 19, 2015. (Reuters Photo/Carlos Barria) Federal Reserve Chair Janet Yellen arrives at a meeting of the Financial Stability Oversight Council (FSOC) at the Treasury Department in Washington May 19, 2015. (Reuters Photo/Carlos Barria)[/caption] Janet Yellen is haunted by the taper tantrum as the Federal Reserve lays the groundwork for its first interest-rate increase in almost a decade. Chair Yellen and her colleagues are fretting that bond yields near record lows could surge once the Fed starts raising rates, according to minutes of their April meeting released this week. Higher costs of everything from mortgages to car loans could result, potentially putting the fragile economic recovery at risk. Yellen has seen this movie before. In 2013, when then-Chairman Ben S. Bernanke suggested that the Fed could start tapering a bond-buying program intended to stimulate the economy, Treasury yields jumped. A replay could prompt the Fed to pursue a more gradual tightening path, said Gennadiy Goldberg, US strategist at TD Securities USA LLC in New York. “It could really be a concern for them that maybe they shouldn’t hike as quickly or as much if we do get a taper-tantrum-like scenario, where some of the tightening is done for them by a massive market readjustment,” Goldberg said. “I don’t think it will change the timing for the first rate hike,” he said, “but the pace of future hikes, yeah.” Changes in the structure of the Treasury market could exaggerate the reaction to a rate increase, Fed officials said at last month’s meeting. Strategist have cited reduced liquidity as one catalyst for increased volatility. June meeting Most Fed officials have said they are likely to raise rates this year, though they haven’t specified precisely when. At their April meeting, officials said only that conditions for a rate rise probably won’t fall into pace by their next meeting in June, the minutes showed. Economists expect an increase in September, according to a Bloomberg survey. How markets react when they do finally tighten is a source of concern for Fed officials, who have kept the benchmark federal funds rate near zero since December 2008. Expectations that the Fed will continue its easy money policies have helped keep Treasury yields low. The 10-year note yielded 2.19 percent late Thursday, and it has averaged 1.99 percent this year. “Policy makers highlighted possible risks related to the low level of term premiums,” or the extra compensation investors demand for holding long-term bonds, the minutes showed. Officials noted that it’s possible that those levels could “rise sharply -- in a manner similar to the increase observed in the spring and summer of 2013” during the so-called taper tantrum. At the meeting, officials said preparing markets for a rate rise could reduce the fallout. Careful communications “Careful committee communications regarding its policy intentions could help damp any resulting increase in market volatility around the time of the commencement of normalization,” some officials said, according to the minutes. Yellen has already sounded warning signals. Responding to questions at a May 6 forum in Washington, she said both stocks and bonds are richly valued. “Long-term interest rates are at very low levels,” Yellen said. “We could see a sharp jump in long-term rates” after liftoff, she said. Stocks and Treasuries fell on her comments. The challenge for the Fed is cooling off markets without sowing panic, said Lori Heinel, chief portfolio strategist at the investment management unit of State Street Corp. “We know that in the past when they’ve talked about raising rates we’ve seen sharp sell-offs in bond markets,” she said. Assurances dropped The Fed has also sought to prepare markets by dropping assurances that interest rates will stay low, stressing instead that they could be raised at any meeting, depending on how economic data unfold. The central bank in April repeated that it will tighten when it sees further improvement in the labor market and is “reasonably confident” inflation will move back up to its 2 percent goal in the medium term. Reduced liquidity in the Treasury market could exaggerate the reaction to a rate increase, Fed officials said at last month’s meeting. Liquidity may have declined because regulations put into effect in the wake of the 2008 financial crisis have made it costly for banks to hold large inventories of bonds on their balance sheets. Concerns over illiquidity in the Treasury market in particular were magnified after Treasury yield fluctuated by almost 0.4 percentage point on Oct. 15. Volatility index The Bank of America Merrill Lynch’s MOVE Index, a measure of expected Treasury-market volatility, reached 90.99 on May 6, the highest level since March 3, and was at 86.11 on Thursday. “The Fed can’t change that the structure of the market has changed,” said Tim Paulson, fixed-income investment strategist at Lord Abbett & Co. in Jersey City, New Jersey, which has $139.1 billion in assets under management. “But what is important is that they acknowledged it, and that’s significant.” Discussions of bond-market volatility and financial stability more broadly show that policy makers are watching more than just unemployment and inflation as they consider when to raise rates. “Financial stability has essentially become a third mandate for the Federal Reserve,” Jim Bianco, president of Bianco Research LLC in Chicago, wrote in a research note published on Thursday. Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407443 Bank Indonesia Lowers Down Payment to 20% for First-Time Home Owners http://thejakartaglobe.beritasatu.com/?p=407394 Fri, 22 May 2015 17:51:04 +0700
Jakarta. Bank Indonesia has announced plans to slash the required down payment for the purchase of first homes from 30 percent to 20 percent to encourage lending and boost economic growth.
Qualified lenders would be allowed to provide first-time buyers a home mortgage of up to 80 percent of the purchase price for houses larger than 70 square meters, Bank Indonesia governor Agus Martowardojo told reporters on Friday. Current regulation limits the cap, known as loan-to-value ratio, at 70 percent.
Still, the new rule would only apply to lenders with non-performing loans of less than 5 percent of its mortgage portfolio, Agus said.
BI will also ease the requirements for the second, third and any subsequent home purchases, added BI deputy governor Halim Alamsyah
"We are looking into how the down payment could be lowered by around 10 [percentage points] from the current regulation. We will provide slight easing for second and forth mortgages, but not as much," he told reporters.
The revision is expected to be published in June.
Bank Indonesia caps the maximum loan-to-value ratio for the purchase of a small first home — between 22 square meters and 70 square meters in size — at 80 percent.
For a second home, maximum loan-to-value ratio is 70 percent, and for a larger home it is 60 percent. Maximum loan-to-value ratios for the purchase of small subsequent homes is 60 percent and 50 percent for larger houses.
Property developers have applauded the central bank's move, saying it will be in line with the government's target for high economic growth.
"If the government wants the property sector to grow as much as 40 percent, just like two or three years ago, then the government needs to revert to the old regulation. LTV should be at around 80 to 90 percent [for first-home buyers]," said Amran Lukman, Jakarta-branch chairman of Realestat Indonesia, an association of property developers.
"The property sector contributes between 10 percent and 15 percent of the economy's growth. If the government issues a non-supportive regulation for the property sector, then the [economy] will suffer the impact," Amran said.
Indonesia's economy grew 4.7 percent year-on-year in the January-March, its slowest pace in five years due to weak commodity prices and slow government spending. The Finance Ministry now expects the country to expand 5.4 percent this year, down from its 5.7 percent target in the 2015 Revised State Budget.
GlobeAsia
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Jakarta. Bank Indonesia has announced plans to slash the required down payment for the purchase of first homes from 30 percent to 20 percent to encourage lending and boost economic growth.
Qualified lenders would be allowed to provide first-time buyers a home mortgage of up to 80 percent of the purchase price for houses larger than 70 square meters, Bank Indonesia governor Agus Martowardojo told reporters on Friday. Current regulation limits the cap, known as loan-to-value ratio, at 70 percent.
Still, the new rule would only apply to lenders with non-performing loans of less than 5 percent of its mortgage portfolio, Agus said.
BI will also ease the requirements for the second, third and any subsequent home purchases, added BI deputy governor Halim Alamsyah
"We are looking into how the down payment could be lowered by around 10 [percentage points] from the current regulation. We will provide slight easing for second and forth mortgages, but not as much," he told reporters.
The revision is expected to be published in June.
Bank Indonesia caps the maximum loan-to-value ratio for the purchase of a small first home — between 22 square meters and 70 square meters in size — at 80 percent.
For a second home, maximum loan-to-value ratio is 70 percent, and for a larger home it is 60 percent. Maximum loan-to-value ratios for the purchase of small subsequent homes is 60 percent and 50 percent for larger houses.
Property developers have applauded the central bank's move, saying it will be in line with the government's target for high economic growth.
"If the government wants the property sector to grow as much as 40 percent, just like two or three years ago, then the government needs to revert to the old regulation. LTV should be at around 80 to 90 percent [for first-home buyers]," said Amran Lukman, Jakarta-branch chairman of Realestat Indonesia, an association of property developers.
"The property sector contributes between 10 percent and 15 percent of the economy's growth. If the government issues a non-supportive regulation for the property sector, then the [economy] will suffer the impact," Amran said.
Indonesia's economy grew 4.7 percent year-on-year in the January-March, its slowest pace in five years due to weak commodity prices and slow government spending. The Finance Ministry now expects the country to expand 5.4 percent this year, down from its 5.7 percent target in the 2015 Revised State Budget.
GlobeAsia
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http://thejakartaglobe.beritasatu.com/?p=407394
HP’s $4.5 Billion Chinese Business Finds a Local Face to Succeed http://thejakartaglobe.beritasatu.com/?p=407433 Fri, 22 May 2015 17:42:37 +0700 A woman walks past the Hewlett-Packard logo at its French headquarters in Issy le Moulineaux, western Paris, in this file photo. (Reuters Photo/Charles Platiau) A woman walks past the Hewlett-Packard logo at its French headquarters in Issy le Moulineaux, western Paris, in this file photo. (Reuters Photo/Charles Platiau)[/caption] Hewlett-Packard acknowledged its Chinese unit’s “disappointing” performance twice this year, following new restrictions on foreign technology vendors. Now it has given up control of the $4.5 billion business to try to change its fortunes. Hewlett-Packard said Thursday it will sell 51 percent of its networking and server operations in the country to an arm of Beijing’s elite Tsinghua University, the alma mater of Chinese President Xi Jinping. It’s betting that ceding ownership to the state-owned Chinese firm will help it boost sales as the government presses the country’s banks, military and major enterprises to stop buying most foreign technology. The deal highlights what’s necessary to succeed in the world’s No. 2 economy as the Chinese government promotes home- grown technology at the expense of companies like Cisco Systems and International Business Machines Tsinghua beat rival bidders through its advantages as a state-owned company and ready access to capital, according to Zhao Weiguo, its investment arm’s billionaire chairman. “We do have our secrets, but all of them are legal,” Zhao told reporters in Beijing on Friday. “I don’t want to talk about products, technology and so on, because when you’re dealing with M&A, other factors are more important.” NSA hacking His firm beat state-owned China Huaxin Post & Telecommunication Economy Development Center for the holding in the Hewlett-Packard business, even though Huaxin had won pre- approval for the deal from the country’s top economic planning agency, according to people familiar with the matter. They asked not to be identified discussing private information. The government typically gives only one company the go- ahead to pursue a deal, in order to avoid Chinese firms competing and driving up the price. The economic planning agency, called the National Development and Reform Commission, didn’t immediately respond to a faxed request for comment. A Beijing-based press officer for Huaxin confirmed the company received NDRC approval for its bid. China is moving to bolster its technology sector after Edward Snowden revealed widespread spying by the U.S. National Security Agency and accused the intelligence service of hacking into the computers of Tsinghua University. President Xi called for faster development of the domestic technology industry at the first meeting of his newly created Internet security panel in February last year. “If the choice comes down to choosing a domestic vendor or a Western company, there’s definitely a preference for the domestics,” Stephen Yang, an analyst at brokerage Sun Hung Kai Financial Ltd. in Hong Kong, said by phone Friday. “The control has shifted to Tsinghua, but it’s safe to say that HP is still driving the strategy of that business.” Management rights Hewlett-Packard will help appoint management for the Chinese venture, which is known as H3C, and Tsinghua won’t make major changes to its operations, Tsinghua Unisplendour Corp. President Qi Lian said Friday in Beijing. The US company will retain rights to H3C’s intellectual property and is keeping full ownership of its China-based enterprise services, software, HP Helion Cloud, Aruba Networks, printing and personal-systems businesses, which aren’t part of this deal. Tsinghua is broadening the scope of its dealmaking after spending about $2.1 billion to acquire semiconductor companies since 2013, according to data compiled by Bloomberg. It beat an arm of the Shanghai government to acquire chip designer RDA Microelectronics in an $893 million deal completed last year, the data show. Credit Suisse Group AG advised Hewlett-Packard on the sale. Bloomberg]]> A woman walks past the Hewlett-Packard logo at its French headquarters in Issy le Moulineaux, western Paris, in this file photo. (Reuters Photo/Charles Platiau) A woman walks past the Hewlett-Packard logo at its French headquarters in Issy le Moulineaux, western Paris, in this file photo. (Reuters Photo/Charles Platiau)[/caption] Hewlett-Packard acknowledged its Chinese unit’s “disappointing” performance twice this year, following new restrictions on foreign technology vendors. Now it has given up control of the $4.5 billion business to try to change its fortunes. Hewlett-Packard said Thursday it will sell 51 percent of its networking and server operations in the country to an arm of Beijing’s elite Tsinghua University, the alma mater of Chinese President Xi Jinping. It’s betting that ceding ownership to the state-owned Chinese firm will help it boost sales as the government presses the country’s banks, military and major enterprises to stop buying most foreign technology. The deal highlights what’s necessary to succeed in the world’s No. 2 economy as the Chinese government promotes home- grown technology at the expense of companies like Cisco Systems and International Business Machines Tsinghua beat rival bidders through its advantages as a state-owned company and ready access to capital, according to Zhao Weiguo, its investment arm’s billionaire chairman. “We do have our secrets, but all of them are legal,” Zhao told reporters in Beijing on Friday. “I don’t want to talk about products, technology and so on, because when you’re dealing with M&A, other factors are more important.” NSA hacking His firm beat state-owned China Huaxin Post & Telecommunication Economy Development Center for the holding in the Hewlett-Packard business, even though Huaxin had won pre- approval for the deal from the country’s top economic planning agency, according to people familiar with the matter. They asked not to be identified discussing private information. The government typically gives only one company the go- ahead to pursue a deal, in order to avoid Chinese firms competing and driving up the price. The economic planning agency, called the National Development and Reform Commission, didn’t immediately respond to a faxed request for comment. A Beijing-based press officer for Huaxin confirmed the company received NDRC approval for its bid. China is moving to bolster its technology sector after Edward Snowden revealed widespread spying by the U.S. National Security Agency and accused the intelligence service of hacking into the computers of Tsinghua University. President Xi called for faster development of the domestic technology industry at the first meeting of his newly created Internet security panel in February last year. “If the choice comes down to choosing a domestic vendor or a Western company, there’s definitely a preference for the domestics,” Stephen Yang, an analyst at brokerage Sun Hung Kai Financial Ltd. in Hong Kong, said by phone Friday. “The control has shifted to Tsinghua, but it’s safe to say that HP is still driving the strategy of that business.” Management rights Hewlett-Packard will help appoint management for the Chinese venture, which is known as H3C, and Tsinghua won’t make major changes to its operations, Tsinghua Unisplendour Corp. President Qi Lian said Friday in Beijing. The US company will retain rights to H3C’s intellectual property and is keeping full ownership of its China-based enterprise services, software, HP Helion Cloud, Aruba Networks, printing and personal-systems businesses, which aren’t part of this deal. Tsinghua is broadening the scope of its dealmaking after spending about $2.1 billion to acquire semiconductor companies since 2013, according to data compiled by Bloomberg. It beat an arm of the Shanghai government to acquire chip designer RDA Microelectronics in an $893 million deal completed last year, the data show. Credit Suisse Group AG advised Hewlett-Packard on the sale. Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407433 OPEC Seen Unyielding in Oil Market-Share Battle With Shale http://thejakartaglobe.beritasatu.com/?p=407424 Fri, 22 May 2015 17:12:31 +0700 A diesel pump is seen at a privately operated fuel station in Gasse near Lake Tegernsee, January 9, 2015. (Reuters Photo/Michael Dalder) A diesel pump is seen at a privately operated fuel station in Gasse near Lake Tegernsee, January 9, 2015. (Reuters Photo/Michael Dalder)[/caption] OPEC will stick with the strategy of favoring market share over prices when it meets next month because rival producers are already starting to buckle. All but one of the 34 analysts and traders surveyed by Bloomberg said the Organization of Petroleum Exporting Countries will maintain its daily production target of 30 million barrels when it meets in Vienna on June 5. Saudi Arabia, the biggest of OPEC’s 12 members, shaped the strategy at the last meeting in November, arguing that the usual response of cutting output to boost prices would not address the threat from shale and other higher-cost suppliers. Prices rose by about $20 since mid-January as producers cut spending plans and the number of active US drilling rigs fell by the most ever. “Dramatic cuts in spending and drilling are finally having an impact, so why on earth would Saudi Arabia change course now their strategy is just starting to bear fruit,” Mike Wittner, head of oil research at Societe Generale SA, said by phone from New York on May 19. “Anyone who expects anything to happen at this meeting is going to be sorely disappointed.” Brent crude, an international benchmark, traded at $66.32 a barrel at 9:19 a.m. London time. While that’s 43 percent below last year’s high, it’s 47 percent more than the low reached Jan. 13. OPEC’s 12 members pumped about 31.2 million barrels a day of crude in April, almost 3 million a day more than the average amount the world requires from the group this quarter, according to the Paris-based International Energy Agency. Maintain production While some members, such as Iran and Venezuela, said they opposed the Nov. 27 decision to maintain production, several OPEC officials have signaled this month that the group will continue with its current course. Iranian Deputy Oil Minister Roknoddin Javadi said on May 18 that that the existing production target is appropriate. US oil producers idled more than half of the country’s drilling rigs since October, according to data from Baker Hughes. The nation’s crude production fell 1.2 percent to 9.3 million barrels a day last week, the biggest drop since July, Energy Information Administration data show. Global investment in oil production might fall by $100 billion this year, according to the IEA. Demand growth will accelerate to 1.3 million to 1.4 million barrels a day this year, Chris Bake, an executive director at Vitol Group, the world’s largest independent oil trader, said at a conference in London on May 20. Lower prices and economic growth increased demand in Europe, the Middle East and India, he said. Global oil demand rose 700,000 barrels a day last year, according to the IEA. “OPEC doesn’t really have a need to change course,” Francisco Blanch, Bank of America Corp.’s head of commodities research, said by phone from New York on May 18. “The strategy has achieved its goal of reining in supply and stimulating demand.” Bloomberg]]> A diesel pump is seen at a privately operated fuel station in Gasse near Lake Tegernsee, January 9, 2015. (Reuters Photo/Michael Dalder) A diesel pump is seen at a privately operated fuel station in Gasse near Lake Tegernsee, January 9, 2015. (Reuters Photo/Michael Dalder)[/caption] OPEC will stick with the strategy of favoring market share over prices when it meets next month because rival producers are already starting to buckle. All but one of the 34 analysts and traders surveyed by Bloomberg said the Organization of Petroleum Exporting Countries will maintain its daily production target of 30 million barrels when it meets in Vienna on June 5. Saudi Arabia, the biggest of OPEC’s 12 members, shaped the strategy at the last meeting in November, arguing that the usual response of cutting output to boost prices would not address the threat from shale and other higher-cost suppliers. Prices rose by about $20 since mid-January as producers cut spending plans and the number of active US drilling rigs fell by the most ever. “Dramatic cuts in spending and drilling are finally having an impact, so why on earth would Saudi Arabia change course now their strategy is just starting to bear fruit,” Mike Wittner, head of oil research at Societe Generale SA, said by phone from New York on May 19. “Anyone who expects anything to happen at this meeting is going to be sorely disappointed.” Brent crude, an international benchmark, traded at $66.32 a barrel at 9:19 a.m. London time. While that’s 43 percent below last year’s high, it’s 47 percent more than the low reached Jan. 13. OPEC’s 12 members pumped about 31.2 million barrels a day of crude in April, almost 3 million a day more than the average amount the world requires from the group this quarter, according to the Paris-based International Energy Agency. Maintain production While some members, such as Iran and Venezuela, said they opposed the Nov. 27 decision to maintain production, several OPEC officials have signaled this month that the group will continue with its current course. Iranian Deputy Oil Minister Roknoddin Javadi said on May 18 that that the existing production target is appropriate. US oil producers idled more than half of the country’s drilling rigs since October, according to data from Baker Hughes. The nation’s crude production fell 1.2 percent to 9.3 million barrels a day last week, the biggest drop since July, Energy Information Administration data show. Global investment in oil production might fall by $100 billion this year, according to the IEA. Demand growth will accelerate to 1.3 million to 1.4 million barrels a day this year, Chris Bake, an executive director at Vitol Group, the world’s largest independent oil trader, said at a conference in London on May 20. Lower prices and economic growth increased demand in Europe, the Middle East and India, he said. Global oil demand rose 700,000 barrels a day last year, according to the IEA. “OPEC doesn’t really have a need to change course,” Francisco Blanch, Bank of America Corp.’s head of commodities research, said by phone from New York on May 18. “The strategy has achieved its goal of reining in supply and stimulating demand.” Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407424 This Robot Is Cute, Artificially Intelligent and Employed http://thejakartaglobe.beritasatu.com/?p=407379 Fri, 22 May 2015 16:55:31 +0700 A humanoid robot walks around during the International Conference on Humanoid Robots in Madrid  on Nov. 19, 2014. (Reuters Photo/Andrea Comas) A humanoid robot walks around during the International Conference on Humanoid Robots in Madrid on Nov. 19, 2014. (Reuters Photo/Andrea Comas)[/caption] Willie McTuggie looks like a photocopier on wheels. But he — it, actually — has the engineered brain of a reasonably smart human, and acts like one when he rolls up to a nurse’s station, opens a drawer, retrieves a dose of pills and glides off to make a delivery. Packed with more than 30 motion-detecting and other sensors, Willie and his automated buddies at the UCSF Medical Center can open doors, avoid collisions with doctors on rounds and perceive when to wait for a free elevator. There are 25 mobile bots from the robotics company Aethon on staff, named and decorated by mortal colleagues. Willie’s wrapped in the San Francisco Giant’s team colors of orange and black, and Maybelle is designed to look like one of the city’s cable cars. The machines perform duties once handled by nurses, orderlies, cafeteria staff and maintenance crews. So far, no people have lost jobs to the bot corps. “It does displace certain roles, but we can put that headcount into other service roles,” says Pamela Hudson, executive director of clinical systems at the University of California, San Francisco, hospital. It is, she says, a win-win. Not everyone is enthusiastic as contraptions and software coded with artificial intelligence invade the workplace. The human-brain mimics are becoming so clever that, according to a study by the Oxford Martin Program on Technology, 47 percent of all US jobs are at risk over the next two decades of being given over to computers. They’re already writing sports stories, milking cows and reviewing X-ray results. Three-foot-tall cybernetic bellhops invented by Savioke, a robotics company, deliver room-service orders at Aloft hotels near Apple’s headquarters wearing painted-on black bow ties. The startup Momentum Machines is building a fast-food burger-flipping apparatus. At the University of Maryland Institute for Advanced Computer Studies, a Baxter robot from Rethink Robotics is mastering the art of making a salad. The artificial intelligence revolution is writing a new chapter in the age-old debate over whether machines are putting people out of work or opening up new opportunities for them. “The idea of technology destroying jobs has been going on for two centuries,” says Richard Cooper, an economist at Harvard University who has studied the impact of technological advancements on employment. “Certain jobs get destroyed but other jobs get created.” The catch in the 21st Century is that the technological leaps are so big and happening so quickly, and at a time when service industry jobs are responsible for more than 40 percent of employment growth in the US, where income inequality is widening. “The bar to get entry in to the labor force is rising faster than people expected and the ability to stay there is falling,” says Sebastian Thrun, former head of the Google research laboratory Google X and one of developers of the company’s driverless-car technology. “The competition from machines is getting stronger and stronger.” Because they’re getting smarter and smarter. Super-fast computer-processing strengths and the information-scavenging abilities of the Web make it possible for machines to quickly process huge amounts of information, learn from it and share — like when a self-driving car is in a fender-bender after going too quickly around a turn and transmits a warning to others so they don’t make the same mistake. In so-called deep learning AI systems, tens of thousands to millions of digital neurons are stitched together and layered to create a Frankenstein version of our own neocortex. These can learn about data merely by being exposed to it, and are already widely used in cutting-edge digital imaging. At Facebook, researchers are designing software that can read simple texts and answer questions about it. At Google, engineers have built systems that allow a computer to absorb the rules of an arcade game, learn to play it and win. Last month, Google received a patent for instilling a robot with a personality tailored to mesh with the human with whom it’s interacting — or, as the patent put it, display “states or moods representing transitory conditions of happiness, fear, surprise, perplexion (e.g., the Woody Allen robot), thoughtfulness, derision (e.g., the Rodney Dangerfield robot), and so forth.” That future isn’t quite here yet. Androids on the payroll have varying levels of smarts and sophistication. Some, like Willie McTuggie, are loaded with navigation cunning that can follow programmed maps of a facility to get around. Others attain a refined level of dexterity and understanding of space, which is enough to replace workers on a factory floor. Bots have been helping assemble automobiles in Detroit for decades, and other manufacturers are enlisting them to perform increasing complicated duties. In Seattle, Boeing’s planning to have KUKA AGautomatons fasten the fuselage panels of its 777 and 777X planes. The bots will handle the drilling and filing of more than 60,000 panels, which according to the aircraft maker will boost worker safety and product quality. Workers on the fuselage will transition to new roles, according to Boeing. Meanwhile, at the University of Maryland, the Baxter robot — named Julia, after chef Julia Child — watches cooking videos on YouTube and learns, step by step, what to do. The magic is in the bot’s brain, which is loaded with advanced image- classification software and a reasoning system that translate what it “sees” through cameras positioned on pincher claws at the ends of its two big red arms. Julia observes and then pours lettuce and baby tomatoes in to a bowl, adds dressing, and then imitates how a chef’s hand grasps a spoon to mix the concoction. Julia is years away from taking over as a line chef, but lawyers are already feeling the brunt of deep-learning advances: Software is capable of scanning documents and e-mails to figure out what’s admissible in trials. “What used to take a hundred attorneys can now be done with one,” says Andy Wilson, CEO of Logikcull, which used to be a paralegal-for-hire company and now sells legal automation technology. These days AI teams are working on systems to put some of their own out of work, as Google researchers experiment with systems that can automatically check the quality of a program’s code. “We don’t live in a world where any job last forever,” Thrun says. With technology advancing so swiftly, “people have to keep running.” Bloomberg ]]> A humanoid robot walks around during the International Conference on Humanoid Robots in Madrid  on Nov. 19, 2014. (Reuters Photo/Andrea Comas) A humanoid robot walks around during the International Conference on Humanoid Robots in Madrid on Nov. 19, 2014. (Reuters Photo/Andrea Comas)[/caption] Willie McTuggie looks like a photocopier on wheels. But he — it, actually — has the engineered brain of a reasonably smart human, and acts like one when he rolls up to a nurse’s station, opens a drawer, retrieves a dose of pills and glides off to make a delivery. Packed with more than 30 motion-detecting and other sensors, Willie and his automated buddies at the UCSF Medical Center can open doors, avoid collisions with doctors on rounds and perceive when to wait for a free elevator. There are 25 mobile bots from the robotics company Aethon on staff, named and decorated by mortal colleagues. Willie’s wrapped in the San Francisco Giant’s team colors of orange and black, and Maybelle is designed to look like one of the city’s cable cars. The machines perform duties once handled by nurses, orderlies, cafeteria staff and maintenance crews. So far, no people have lost jobs to the bot corps. “It does displace certain roles, but we can put that headcount into other service roles,” says Pamela Hudson, executive director of clinical systems at the University of California, San Francisco, hospital. It is, she says, a win-win. Not everyone is enthusiastic as contraptions and software coded with artificial intelligence invade the workplace. The human-brain mimics are becoming so clever that, according to a study by the Oxford Martin Program on Technology, 47 percent of all US jobs are at risk over the next two decades of being given over to computers. They’re already writing sports stories, milking cows and reviewing X-ray results. Three-foot-tall cybernetic bellhops invented by Savioke, a robotics company, deliver room-service orders at Aloft hotels near Apple’s headquarters wearing painted-on black bow ties. The startup Momentum Machines is building a fast-food burger-flipping apparatus. At the University of Maryland Institute for Advanced Computer Studies, a Baxter robot from Rethink Robotics is mastering the art of making a salad. The artificial intelligence revolution is writing a new chapter in the age-old debate over whether machines are putting people out of work or opening up new opportunities for them. “The idea of technology destroying jobs has been going on for two centuries,” says Richard Cooper, an economist at Harvard University who has studied the impact of technological advancements on employment. “Certain jobs get destroyed but other jobs get created.” The catch in the 21st Century is that the technological leaps are so big and happening so quickly, and at a time when service industry jobs are responsible for more than 40 percent of employment growth in the US, where income inequality is widening. “The bar to get entry in to the labor force is rising faster than people expected and the ability to stay there is falling,” says Sebastian Thrun, former head of the Google research laboratory Google X and one of developers of the company’s driverless-car technology. “The competition from machines is getting stronger and stronger.” Because they’re getting smarter and smarter. Super-fast computer-processing strengths and the information-scavenging abilities of the Web make it possible for machines to quickly process huge amounts of information, learn from it and share — like when a self-driving car is in a fender-bender after going too quickly around a turn and transmits a warning to others so they don’t make the same mistake. In so-called deep learning AI systems, tens of thousands to millions of digital neurons are stitched together and layered to create a Frankenstein version of our own neocortex. These can learn about data merely by being exposed to it, and are already widely used in cutting-edge digital imaging. At Facebook, researchers are designing software that can read simple texts and answer questions about it. At Google, engineers have built systems that allow a computer to absorb the rules of an arcade game, learn to play it and win. Last month, Google received a patent for instilling a robot with a personality tailored to mesh with the human with whom it’s interacting — or, as the patent put it, display “states or moods representing transitory conditions of happiness, fear, surprise, perplexion (e.g., the Woody Allen robot), thoughtfulness, derision (e.g., the Rodney Dangerfield robot), and so forth.” That future isn’t quite here yet. Androids on the payroll have varying levels of smarts and sophistication. Some, like Willie McTuggie, are loaded with navigation cunning that can follow programmed maps of a facility to get around. Others attain a refined level of dexterity and understanding of space, which is enough to replace workers on a factory floor. Bots have been helping assemble automobiles in Detroit for decades, and other manufacturers are enlisting them to perform increasing complicated duties. In Seattle, Boeing’s planning to have KUKA AGautomatons fasten the fuselage panels of its 777 and 777X planes. The bots will handle the drilling and filing of more than 60,000 panels, which according to the aircraft maker will boost worker safety and product quality. Workers on the fuselage will transition to new roles, according to Boeing. Meanwhile, at the University of Maryland, the Baxter robot — named Julia, after chef Julia Child — watches cooking videos on YouTube and learns, step by step, what to do. The magic is in the bot’s brain, which is loaded with advanced image- classification software and a reasoning system that translate what it “sees” through cameras positioned on pincher claws at the ends of its two big red arms. Julia observes and then pours lettuce and baby tomatoes in to a bowl, adds dressing, and then imitates how a chef’s hand grasps a spoon to mix the concoction. Julia is years away from taking over as a line chef, but lawyers are already feeling the brunt of deep-learning advances: Software is capable of scanning documents and e-mails to figure out what’s admissible in trials. “What used to take a hundred attorneys can now be done with one,” says Andy Wilson, CEO of Logikcull, which used to be a paralegal-for-hire company and now sells legal automation technology. These days AI teams are working on systems to put some of their own out of work, as Google researchers experiment with systems that can automatically check the quality of a program’s code. “We don’t live in a world where any job last forever,” Thrun says. With technology advancing so swiftly, “people have to keep running.” Bloomberg ]]> http://thejakartaglobe.beritasatu.com/?p=407379 HSBC Bids for 99% Control of Bank Ekonomi http://thejakartaglobe.beritasatu.com/?p=407372 Fri, 22 May 2015 16:44:38 +0700 Jakarta. HSBC Asia Pacific has made a Rp 17.2 billion ($1.31 million) bid for a tiny fraction of shares in Indonesia’s Bank Ekonomi Raharja still held by the public, as it moves toward merging the bank with its local unit.

HSBC is offering Rp 10,000 per share for as much as 1.72 million shares, or 0.06 percent of Bank Ekonomi stock held by the public. HSBC already holds a 98.94 percent stake in the bank, with the remaining 1 percent held by Bank Central Asia, Indonesia’s biggest private bank by both assets and market value.

According to an HSBC statement, the offer is 429 percent higher than Bank Ekonomi’s highest stock price in the year before it trading in its shares was suspended on Feb. 17.

The offer will extend from June 5 to July 4 and payment will be disbursed by July 15, the statement said, pending approval from the Financial Services Authority (OJK) expected by June 3.

“This tender offer is related to Bank Ekonomi’s plan to delist from the stock exchange, which has received the approval of extraordinary shareholders on May 12,” HSBC said.

“Once the lender has gone private, we plan to integrate the operations of Bank Ekonomi and our local affiliate, HSBC Indonesia.”

It did not say when it expected the merger between Bank Ekonomi and HSBC Indonesia to be completed.

The Indonesian government is working on a new banking bill that would oblige foreign banks to be locally incorporated, in an attempt to strengthen the domestic banking system.

Bank Ekonomi had total assets of Rp 30.7 trillion as of March, and employs more than 2,000 employees in 97 branch offices across 31 cities in Indonesia, primarily lending to small and medium businesses.

HSBC Indonesia currently has 47 branches in six major cities nationwide, and more than 3,000 employees.

GlobeAsia

]]>
Jakarta. HSBC Asia Pacific has made a Rp 17.2 billion ($1.31 million) bid for a tiny fraction of shares in Indonesia’s Bank Ekonomi Raharja still held by the public, as it moves toward merging the bank with its local unit.

HSBC is offering Rp 10,000 per share for as much as 1.72 million shares, or 0.06 percent of Bank Ekonomi stock held by the public. HSBC already holds a 98.94 percent stake in the bank, with the remaining 1 percent held by Bank Central Asia, Indonesia’s biggest private bank by both assets and market value.

According to an HSBC statement, the offer is 429 percent higher than Bank Ekonomi’s highest stock price in the year before it trading in its shares was suspended on Feb. 17.

The offer will extend from June 5 to July 4 and payment will be disbursed by July 15, the statement said, pending approval from the Financial Services Authority (OJK) expected by June 3.

“This tender offer is related to Bank Ekonomi’s plan to delist from the stock exchange, which has received the approval of extraordinary shareholders on May 12,” HSBC said.

“Once the lender has gone private, we plan to integrate the operations of Bank Ekonomi and our local affiliate, HSBC Indonesia.”

It did not say when it expected the merger between Bank Ekonomi and HSBC Indonesia to be completed.

The Indonesian government is working on a new banking bill that would oblige foreign banks to be locally incorporated, in an attempt to strengthen the domestic banking system.

Bank Ekonomi had total assets of Rp 30.7 trillion as of March, and employs more than 2,000 employees in 97 branch offices across 31 cities in Indonesia, primarily lending to small and medium businesses.

HSBC Indonesia currently has 47 branches in six major cities nationwide, and more than 3,000 employees.

GlobeAsia

]]>
http://thejakartaglobe.beritasatu.com/?p=407372
Indonesia to Call Time on Tax-Free Debt for Riskiest Borrowers http://thejakartaglobe.beritasatu.com/?p=407371 Fri, 22 May 2015 16:28:54 +0700 Finance Minister Bambang Brodjonegoro says Indonesia wants a leading role in the Asian Infrastructure Investment Bank. (Antara Photo/Andika Wahyu) Finance Minister Bambang Brodjonegoro. (Antara Photo/Andika Wahyu)[/caption] Companies the world over have used interest payments to shrink their tax bills for decades. Indonesia, faced with record private debt, is trying something different. Southeast Asia’s largest economy plans to ban firms from writing off interest costs against taxable income should debt exceed four times equity. If the finance ministry proposal is enforced next year, heavyweights in the economy such as telecommunications firm Tower Bersama Infrastructure could take a hit. Indonesian President Joko Widodo needs to balance reining in surging liabilities with encouraging investment to reverse the slowest economic growth in six years. The central bank said this week it will loosen lending rules, even after credit to non-financial firms breached Rp 4 quadrillion ($305 billion) last year. It has sought to curb private external debt that soared to more than half of all foreign dues, after defaults on $2.3 billion of dollar bonds since 2008. “We think it’s rather a preventive measure, but perhaps there are some local companies whose total debt is reaching this level,” said Rosemary Fu, a senior credit analyst in Singapore in the emerging corporate team of Pictet Asset Management, a unit of Banque Pictet & Cie. “In terms of Indonesia corporates’ foreign currency debt levels presently, they’re still much lower than what they were on the eve of the 97-98 Asian financial crisis.” Prized perk Indonesia was one of three countries forced to seek an International Monetary Fund bailout in the Asian crisis almost three decades ago. The region’s companies defaulted on billions of dollars of liabilities, with Indonesia’s average 1996 debt levels about 90 percent of equity, World Bank data show. They’re around 80 percent today, according to Bloomberg-compiled data. Such leverage makes tax-free debt a prized perk. Its use dates back to the 19th century in the US, according to Emir Hrnjic, director of education and outreach at the Center for Asset Management Research and Investments at the National University of Singapore. In 2012, an Obama administration bid to cap relief faced stiff resistance from businesses. “Overleveraged companies may carry risk that can spill over on other companies in down times,” Hrnjic said by e-mail. “From the perspective of the companies, this will increase the cost of doing business.” Into the breach The mining, oil and gas and financial industries would be exempt from Indonesia’s proposed new leverage rules, Finance Minister Bambang Brodjonegoro said in Jakarta last week. The plan applies to both local and offshore debt, he said at a press conference on Thursday. Among listed Indonesian companies affected by the proposed rule, 13 would already be in breach, data compiled by Bloomberg show. The largest is Tower Bersama, which is targeting capital expenditure of Rp 2 trillion this year and building as many as 2,000 telecommunication towers. It sold $350 million of dollar bonds in February that now yield 5.29 percent. Calls and text messages to Tower Bersama’s management weren’t returned on Thursday. Solusi Tunas Pratama is the second largest company that would be in breach of the proposal as of Dec. 31. The firm is in the same business as Tower Bersama and also sold dollar notes in February. Its debt ratio has since fallen to about two times equity after a bond repayment and share sale, the company said in a May 20 e-mail. Dams, ports “This regulation will have different impacts in different sectors,” said Vicky Melbourne, senior director at Fitch Ratings in Sydney. “Most infrastructure projects are highly leveraged, and if you say the interest expense will not be deductible, it may stop some from reaching the expected internal return.” Widodo earlier this year outlined plans to build 25 dams in five years, 24 ports and six mass transport systems to spur the economy. Growth slowed to 4.7 percent in the first quarter from a year earlier, the weakest pace since 2009 and well below the president’s target of 7 percent annually within his term. A softer economy has seen Indonesian companies’ credit quality erode in the past six months, Standard & Poor’s said on May 19. It also cited the further depreciation of the rupiah, which has dropped 5.7 percent this year, the worst performing among Asia’s major currencies. The central bank announced new rules in October aimed at limiting offshore debt risk for non-bank companies. They stated that 20 percent of foreign-currency debt must be hedged and assets must comprise at least half of a firm’s overseas liabilities from this year. “Most new financial regulations coming out of Indonesia penalize companies for decisions they have made in the past,” said Xavier Jean, senior director at S&P in Singapore. “That retroactive nature of these rules creates an extra layer of operating uncertainty, which is coming at a time of tougher operating conditions domestically.” Bloomberg]]> Finance Minister Bambang Brodjonegoro says Indonesia wants a leading role in the Asian Infrastructure Investment Bank. (Antara Photo/Andika Wahyu) Finance Minister Bambang Brodjonegoro. (Antara Photo/Andika Wahyu)[/caption] Companies the world over have used interest payments to shrink their tax bills for decades. Indonesia, faced with record private debt, is trying something different. Southeast Asia’s largest economy plans to ban firms from writing off interest costs against taxable income should debt exceed four times equity. If the finance ministry proposal is enforced next year, heavyweights in the economy such as telecommunications firm Tower Bersama Infrastructure could take a hit. Indonesian President Joko Widodo needs to balance reining in surging liabilities with encouraging investment to reverse the slowest economic growth in six years. The central bank said this week it will loosen lending rules, even after credit to non-financial firms breached Rp 4 quadrillion ($305 billion) last year. It has sought to curb private external debt that soared to more than half of all foreign dues, after defaults on $2.3 billion of dollar bonds since 2008. “We think it’s rather a preventive measure, but perhaps there are some local companies whose total debt is reaching this level,” said Rosemary Fu, a senior credit analyst in Singapore in the emerging corporate team of Pictet Asset Management, a unit of Banque Pictet & Cie. “In terms of Indonesia corporates’ foreign currency debt levels presently, they’re still much lower than what they were on the eve of the 97-98 Asian financial crisis.” Prized perk Indonesia was one of three countries forced to seek an International Monetary Fund bailout in the Asian crisis almost three decades ago. The region’s companies defaulted on billions of dollars of liabilities, with Indonesia’s average 1996 debt levels about 90 percent of equity, World Bank data show. They’re around 80 percent today, according to Bloomberg-compiled data. Such leverage makes tax-free debt a prized perk. Its use dates back to the 19th century in the US, according to Emir Hrnjic, director of education and outreach at the Center for Asset Management Research and Investments at the National University of Singapore. In 2012, an Obama administration bid to cap relief faced stiff resistance from businesses. “Overleveraged companies may carry risk that can spill over on other companies in down times,” Hrnjic said by e-mail. “From the perspective of the companies, this will increase the cost of doing business.” Into the breach The mining, oil and gas and financial industries would be exempt from Indonesia’s proposed new leverage rules, Finance Minister Bambang Brodjonegoro said in Jakarta last week. The plan applies to both local and offshore debt, he said at a press conference on Thursday. Among listed Indonesian companies affected by the proposed rule, 13 would already be in breach, data compiled by Bloomberg show. The largest is Tower Bersama, which is targeting capital expenditure of Rp 2 trillion this year and building as many as 2,000 telecommunication towers. It sold $350 million of dollar bonds in February that now yield 5.29 percent. Calls and text messages to Tower Bersama’s management weren’t returned on Thursday. Solusi Tunas Pratama is the second largest company that would be in breach of the proposal as of Dec. 31. The firm is in the same business as Tower Bersama and also sold dollar notes in February. Its debt ratio has since fallen to about two times equity after a bond repayment and share sale, the company said in a May 20 e-mail. Dams, ports “This regulation will have different impacts in different sectors,” said Vicky Melbourne, senior director at Fitch Ratings in Sydney. “Most infrastructure projects are highly leveraged, and if you say the interest expense will not be deductible, it may stop some from reaching the expected internal return.” Widodo earlier this year outlined plans to build 25 dams in five years, 24 ports and six mass transport systems to spur the economy. Growth slowed to 4.7 percent in the first quarter from a year earlier, the weakest pace since 2009 and well below the president’s target of 7 percent annually within his term. A softer economy has seen Indonesian companies’ credit quality erode in the past six months, Standard & Poor’s said on May 19. It also cited the further depreciation of the rupiah, which has dropped 5.7 percent this year, the worst performing among Asia’s major currencies. The central bank announced new rules in October aimed at limiting offshore debt risk for non-bank companies. They stated that 20 percent of foreign-currency debt must be hedged and assets must comprise at least half of a firm’s overseas liabilities from this year. “Most new financial regulations coming out of Indonesia penalize companies for decisions they have made in the past,” said Xavier Jean, senior director at S&P in Singapore. “That retroactive nature of these rules creates an extra layer of operating uncertainty, which is coming at a time of tougher operating conditions domestically.” Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407371 Asia’s Fastest Growing Cities Aren’t All in China; They’re in India http://thejakartaglobe.beritasatu.com/?p=407367 Fri, 22 May 2015 15:52:06 +0700 Bloomberg]]> Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407367 Japan Still Beating China on One Score: World’s Top Creditor http://thejakartaglobe.beritasatu.com/?p=407365 Fri, 22 May 2015 15:52:02 +0700 Businessmen walk behind a Japanese national flag at a convention center in Tokyo May 21, 2015. (Reuters Photo/Toru Hanai) Businessmen walk behind a Japanese national flag at a convention center in Tokyo May 21, 2015. (Reuters Photo/Toru Hanai)[/caption] Japan’s foreign investments and assets climbed to a record in 2014, keeping it in front of China and Germany as the world’s top creditor nation. The reading stretches Japan’s lead as No.1 creditor country to 24 years, with 71 percent more in net assets than China, even after its Asian neighbor surpassed it to become the world’s second-largest economy in 2010. Japan’s net overseas assets grew 13 percent to 366.9 trillion yen ($3 trillion) in 2014, with the exchange rate helping boost gross holdings by 19 percent to 945.3 trillion yen, according to finance ministry data released in Tokyo on Friday. Liabilities, mostly driven by higher inbound investment, rose 23 percent to 578.4 trillion yen. “It’s a combination of both stronger investment abroad and an FX effect,” said Izumi Devalier, HSBC’s Hong Kong-based Japan economist. Japan’s currency has weakened over the past two years as the central bank unleashed unprecedented bond buying in an effort to kick start an economy that has spent more than a decade battling deflation and the impact of a strong currency. The yen has tumbled about 28 percent against the greenback since the beginning of 2013. It was trading at 120.75 at 4:41 p.m. in Tokyo. US debt The US was the most indebted nation in the Group of Seven nations, according to the ministry’s data, with 834.3 trillion yen in net liabilities at the end of 2014. This is partly due to the desire of other nations to hold US debt, with Japan and China the two biggest foreign owners of treasuries. China’s net overseas assets were the equivalent of 214.3 trillion yen last year, while Germany’s totaled 154.7 trillion yen, the Japanese Finance Ministry data showed. While the yen has recently held its ground against the dollar as traders push back bets of a US interest rate increase, the Japanese currency could yet weaken further, according to Daisaku Ueno, chief currency strategist at MUFJ Morgan Stanley in Tokyo. The Bank of Japan refrained from unleashing fresh stimulus at its meeting Friday, though tepid economic growth and still subdued price rises mean new measures may be possible later in the year. “The economy is nowhere near full throttle, prices pressures will remain subdued so as a result the Bank of Japan will be pressured to ease one more time,” Devalier said on Bloomberg Television. Bloomberg]]> Businessmen walk behind a Japanese national flag at a convention center in Tokyo May 21, 2015. (Reuters Photo/Toru Hanai) Businessmen walk behind a Japanese national flag at a convention center in Tokyo May 21, 2015. (Reuters Photo/Toru Hanai)[/caption] Japan’s foreign investments and assets climbed to a record in 2014, keeping it in front of China and Germany as the world’s top creditor nation. The reading stretches Japan’s lead as No.1 creditor country to 24 years, with 71 percent more in net assets than China, even after its Asian neighbor surpassed it to become the world’s second-largest economy in 2010. Japan’s net overseas assets grew 13 percent to 366.9 trillion yen ($3 trillion) in 2014, with the exchange rate helping boost gross holdings by 19 percent to 945.3 trillion yen, according to finance ministry data released in Tokyo on Friday. Liabilities, mostly driven by higher inbound investment, rose 23 percent to 578.4 trillion yen. “It’s a combination of both stronger investment abroad and an FX effect,” said Izumi Devalier, HSBC’s Hong Kong-based Japan economist. Japan’s currency has weakened over the past two years as the central bank unleashed unprecedented bond buying in an effort to kick start an economy that has spent more than a decade battling deflation and the impact of a strong currency. The yen has tumbled about 28 percent against the greenback since the beginning of 2013. It was trading at 120.75 at 4:41 p.m. in Tokyo. US debt The US was the most indebted nation in the Group of Seven nations, according to the ministry’s data, with 834.3 trillion yen in net liabilities at the end of 2014. This is partly due to the desire of other nations to hold US debt, with Japan and China the two biggest foreign owners of treasuries. China’s net overseas assets were the equivalent of 214.3 trillion yen last year, while Germany’s totaled 154.7 trillion yen, the Japanese Finance Ministry data showed. While the yen has recently held its ground against the dollar as traders push back bets of a US interest rate increase, the Japanese currency could yet weaken further, according to Daisaku Ueno, chief currency strategist at MUFJ Morgan Stanley in Tokyo. The Bank of Japan refrained from unleashing fresh stimulus at its meeting Friday, though tepid economic growth and still subdued price rises mean new measures may be possible later in the year. “The economy is nowhere near full throttle, prices pressures will remain subdued so as a result the Bank of Japan will be pressured to ease one more time,” Devalier said on Bloomberg Television. Bloomberg]]> http://thejakartaglobe.beritasatu.com/?p=407365