BNPP Macro and Other News

Economics
§ Foreign investment in Indonesia up 49% in first half (Jakarta Globe) Indonesia experienced a surge in FDI in the first half of the year, creating expectations that the total for the year may exceed earlier forecasts, the Investment Coordinating Board (BKPM) announced on Wednesday. Investors from Singapore, Hong Kong and the US topped the list, with most of the capital coming from expansion of existing operations, according to Gita Wirjawan, chairman of the board. FDI totaled $7.8b during the 1H10, an increase of 48.7% over $5.3b recorded during the same period last year, the BKPM said. Gita said he expected the full-year FDI figure to reach $13.1b in 2010, an increase of 25% from last year’s realized investment of $10.5b.

Corporate-related
§ Bakrie firms admit mistakes, revise financial reports (Jakarta Post) Three Bakrie-affiliated firms and an oil and gas company have acknowledged they made accounting errors. Bakrie and Brothers revised the amount of deposits at Bank Capital to Rp424.3b in consolidated financial statements in the 1Q from previous Rp3.75t, leaving a huge Rp3.33t gap. Bakrie Sumatera Plantations revised the amount of deposits to Rp170b from previous Rp3.5t and Energi Mega Persada revised the size of deposits to Rp130b from Rp1.1t.

§ Inalum’s Japanese owners offering sweetheart deal (Jakarta Post) The Japanese majority shareholders of aluminum smelter PT Indonesia Asahan Aluminum have offered to invest $367m to boost capacity and as much as $500m for a power plant if their contract were extended for 30 more years, an official told lawmakers on Wednesday. However, NAA’s proposal did not include specifics about the size of the stake it would need to retain to make such investments, Effendi said. The government has consistently said it intends to take full ownership in Inalum, or at least a majority stake with NAA retaining a minority share. Inalum president director Kiyoshi Shiomi said shareholders were still discussing all options.