Financing at the capital
market was getting more varied. Very soon PT KPEI would offer facilities to
harness fund through securities Financing. The clearing authorities would
invite clearing members to do security exchange transaction the bilateral way.
Of course there was
requirements and mechanism before enjoying this facility. In accordance with
the regulation of the authorities, this facility was available through clearing
member as borrower, or clearing member as lender, and custodian bank.
Investors, individuals or
institutions, could contact clearing member or custodian to borrow or lend
security. Long term investors, who so far only keep their security, had the
opportunity to make profit by lending security through clearing member for a
percentage of lending fee.
Meanwhile traders could
transact more actively by borrowing security for short selling transaction if
transaction if price of share was predicted to drop. Short selling transaction
by benefiting from PME facilities could only be done by agreement. Meanwhile
guarantee by underwriter could be used for preventing failure in stock
transaction. The same was with application of Alternate Cash Settlement [ACS]
or the process of exchange of share into money.
So far, shares which
permitted for transaction as PME facilities were only shares included in LQ45
group and shares which belonged to margin and short selling facility. The
shares must be listed in C-BEST [deposit and clearing system] which so far had
been managed by PT Kustodian Sentral Efek Indonesia [KSEI]. The shares included
in PME securities must be owned by at least 300 shareholders.
Shares which deserved to be
listed in PME facilities must fulfill minimum daily transaction of at least
500,000 shares in the past 6 months, with average daily transaction frequency
of at least 20 times over the same length of time. KPEI also set requirement
for clearing members who could obtain PME facilities i.e. clearing member must
be already listed 2014. In the end, there was deficit in trade balance
amounting to USD 1.96 billion.
The big deficit was on
account of deficit in oil gas trading amounting to USD 1.06 billion. Also non
oil-gas trading which had been normally surplus was now in deficit of USD 901.5
million. And yet last March non oil-gas trading posted surplus of USD 2.04
billion. Accumulatively trade balance from January to April posted deficit of
894 million.
For information, previously
BI predicted trade balance in April would post deficit. The main cause of
deficit was swelling import. Be informed that trade balance in the past 2
months, i.e. February-march posted surplus of USD 785.3 million and USD 673.2
billion respectively.
Pressures on trade balance
also came from export of raw mineral which shrunk significantly. As known, the
Government only permitted export of processed or according to Law No 4/2009 on
Mineral and Coal Mining [Minerba].
As Indonesia’s overseas
debt expanded while financial resources for repayment was suppressed, in the
future it was necessary to make sure that foreign debt was under control. GOOD
NIGHT. In Government’s policy there were some directions on how to manage overseas
debt among others the need to be gradually set free from dependency on overseas
debt. The objective was to reduce debt.
It was also necessary to
run an integrated system in managing overseas and local debt so it was possible
to run swap between overseas and domestic debt toward attaining minimum cost
and risk.
Considering its complexity,
foreign debt should be managed more intensively by a special body. The
objective was among other to develop primary and secondary market of
Government’s bond to lessen debt burden especially those originating from
abroad. Development of Government’s bond market was expected to promote private
bond market; while interest rate of Government’s debt [SPN] could serve as
benchmark for all monetary and fiscal policy.
Debt Management included
the following steps:
Firstly, to monitor and
analyze risk in the existing debt structure, and to recommend correction on
debt structure of the future. The debt and risk was expected to be synchronous
with cash flow, to avoid risk of failure in fulfilling obligations.
Secondly, maintain
transparence and public accountability. To ensure transparence and public
accountability, there must be openness in the debt management aspects as well
as information on Government’s financial condition, Government’s asset and
obligations and auditing of all debt management activities.
Thirdly, to underscore the
new paradigm that overseas debt was only complementary or second alternative in
state’s income in APBN State Budget so the Government still had to rely on main
income resources. i.e. tax and non-tax income [PNBP].
In the next period, policy
should be focused on efforts to step up efficiency in debt management by still
observing risk indicators the measurable way. Such could be scheming up
policies for debt management whether through SBN State Promissory Notes or
loan. In managing SBN policy was focused on increasing liquidity and absorption
of domestic SBN, whilst in relation to credit instrument, policy was focused on
various efforts supportive to promoting quality of management.
In view of the widening scope
of discussion of Government’s debt management in the future, various current
issue had been accommodated in the concept, among others asset and liability
management, contingtent liability, coordination and communication with
stakeholders of debt management.
The strategy was schemed up
as guideline for state’s debt, whether in the form of security or non security,
in cash loan related to Ministrial or BUMN activities/regional governments
through continued credit but not inclusive of policy on contingency obligation.
Debt management in the form
of loan for activity was not fully exercised by debt manager unit considering
there were various institutions which played the role some stages of debt
management. Debt in the form of security consisted of conventional bonds and
Syariah whether in the form of Rupiah and foreign currency, while non security
debt was in the form of loan which could originate from internal or external
resources.
Businessworld of the
private sector must have strategy related to their overseas debt so there would
be no serious problem in the future. It would be all right for national
corporation to borrow money from abroad provided they market their products
also abroad there would be natural hedging and producers would avoid currency mismatch.
(SS)
Business News - June 4, 2014
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