Indonesia suspends share trading for a third day: official

Indonesia suspended morning trading on the local stock exchange Friday as Asian markets plummeted, backing away from an earlier plan to reopen the bourse after a two-day halt, an official said. "We will suspend share trade in the morning session," Indonesia bourse president director Erry Firmansyah was quoted by AFP as telling Dow Jones Newswires.He said Indonesian authorities will continue monitoring the global market situation before deciding whether to lift the suspension in the afternoon session (starting 0630 GMT).Indonesian Finance Minister Sri Mulyani Indrawati had said Thursday night that trade would resume Friday after a two-day freeze.Trading on the Indonesia Stock Exchange was suspended after it plunged more than 10 percent to a two-year low Wednesday following huge losses on Wall Street, as global financial turmoil hit Southeast Asia's largest economy. Indrawati on Thursday announced a raft of new rules to restore market confidence, including a government pledge to spend four trillion rupiah (420 million dollars) to buy back shares in state companies. The minister also announced new rules allowing companies to buy back up to 20 percent of their paid-up capital in an effort to reduce selling pressure on the local bourse.

Micro-small-medium scale enterprises

The government issued a new regulation on the Micro-Small-Medium Scale Enterprise (“MSMSE”) (Law No.20 of 2008) replacing the old law (Law No.9 of 1995). One of the significant changes is the amount capital for the criteria of MSMSE. The criteria of micro scale enterprise is enterprise with net asset IDR 50.000.000,- excluding land and buildings. The criteria of small scale enterprise is the enterprise with net assets more than IDR 50.000.000,- up to IDR 500.000.000,- excluding land and buildings. Then, the criteria of medium scale enterprise in the enterprise with net asset is the amount of more than IDR 500.000.000,- up to IDR 10.000.000.000,- excluding land and buildings.

Rabobank wants to acquire more banks

Hollands’ Rabobank Group said it sees encouraging prospects in banking business in Indonesia and wants to buy more banks in the country, Asia Pulse reported.R abobank acquired two small banks - Haga Bank and Bank Hagakita - earlier this year. Hagabank, with assets of Rp4.76 trillion ($517 million) and Bank Hagakita valued at Rp1.7 trillion, were then merged into its Indonesian unit PT Rabobank International Indonesia to avoid problems with Bank Indonesia's Single Presence Policy. Rabobank will grab any opportunity to acquire more banks in the country, Antonio da Silva Costa, an official of PT Rabobank told the newspaper Investor Daily.

MRT construction to be delayed

Construction of the Mass Rapid Transportation (MRT) project in Jakarta will be most probably delayed for around two years as the second phase of the agreement with Japan Bank for International Cooperation (JBIC) has not been signed. Originally, it was planned to start construction by end of 2008 so that Jakarta residents would be able to use MRT by 2010. “We hope the second phase of the project will be started end of 2009 or 2010”, said Jakarta Governor Fauzi Bowo yesterday (22/9). The MRT route will run from Lebak Bulus to Dukuh Atas for a distance of 14.3 kilometers.

500,000 irrigation networks damaged

Public Works Minister Joko Kirmanto has said that while the government targeted to repair 1.5 million irrigation networks by 2009, 500,000 irrigation networks has just been discovered to be damaged. “We just have to keep working and upgrading¨, he said when sending off 15 staff from his ministry to the Netherlands on a scholarship program. Indonesia needs to have experts in the future to manage water, added Djoko. Irrigation is important to support rice development in the country.

Forestry Ministry to stop issuing new HTI licenses

The forestry ministry will not accept new applications for licenses to open industrial timber estates (HTI) after the end of October, 2008, a ministry official said, Asia Pulse reported.
The ministry has already issued licenses for 9 million hectares of HTI and new applications have been received for license to open 4 million more hectares, director of HTI development Bejo Santosa said. Santosa said the ministry wants license holders to immediately implement their projects, adding failure will result in revocation of their license. The license holders are given six months to prepare work and if there are no activities after six months their licenses will be given to other investors, Forestry Minister MS Kaban said earlier. Santosa said the ministry has set a target to open up to 15 million hectares of HTI by 2013, adding that therefore 6 million more hectares will be needed.HTI concessions have been grown mainly with acacia trees to feed pulp and paper factories.

Special Economic Zone will replace Free Trade Zone

The Special Economic Zone (KEK) concept is designed to replace the Free Trade Zone (FTZ). The design to attract foreign investors on the KEK is more comprehensive than the FTZ. Bambang Susantono from the Coordinating Ministry for economic affairs said that KEK will be automatically replacing the FTZ. One of advantage points of the KEK is the seven exclusive zones that could be built matched to its classification. They are techno park zone, export processing zone, logistics zone, industrial zone, and other economic zones. Each zone will have special facility in line with its classification, for example, industry that is located at the export processing zone will receive a higher reduction on the export duty compared to other zones.