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#43794 - 07 Feb 07 23:02 GOI/Global Bill to Launch, Fitch and Moody’s Raise Rating
biznews Moderator Offline
Pujangga Besar

Registered: 24 Apr 08
Posts: 7508
Loc: Jakarta
From Government of Indonesia

Global Bill to Launch, Fitch and Moody’s Raise Rating

Indonesia began marketing an international bond on Friday (2/2/07), while Fitch and Moody’s ratings agencies revised its outlook for the country's foreign and local-currency rating to positive from stable.

Fitch cited the government's commitment to maintaining economic stability and fiscal discipline, as well as its top-down policy push for structural changes, The Wall Street Journal reported. Meanwhile in its release, Moody’s stated that the raise reflects the steady improvement of the government’s debt ratios and external debt position.

Roadshows began Friday, with events planned in Singapore, Hong Kong, London and the US, the Journal quoted a person familiar with the subject as saying.

Standard & Poor's Ratings Services said it had assigned a 'BB-' senior unsecured foreign currency debt rating to the issue. S&P said the issue of approximately $2 billion will have a number of tranches with maturities of 15 and 30 years.

The ratings agency said the issue amount is not expected to lead to a material worsening of the country's external position, XFN-ASIA reported.

“Small but persistent central government primary surpluses and a falling interest burden should lower central government debt to around 45% of GDP in 2007, down from over 100% in 2000,” a report added.

Analysts said there was strong interest in the Indonesian bond offer in the absence of other opportunities with reasonable spreads.

Bank Indonesia said the economy was estimated to have grown by 6.5% in the fourth quarter of 2006, putting full-year growth at 5.5%. The fourth quarter jump provided a good springboard for further growth this year, the bank said, according to The Jakarta Post.

Growth in the fourth quarter was due to the revival of spending following the easing of inflation and interest rates, and the country's robust export performance, the central bank said in a report. It pointed to possible growth this year of between 5.7-6.3%.

Looking ahead, BI sees growth in 2007 continuing to gather pace on higher spending -- both private and public -- with investment starting to kick in.

"In the first half of 2007, growth will still be driven by consumption, with investment yet to figure significantly," the report said. "Growth is expected to accelerate in the second half, as private investment and government spending increase."

The consumer price index rose in January less rapidly than in December while exports surged to a record high, boosting expectations of a 25-basis-point central bank rate cut this week.
The consumer price index increased 6.26% from a year earlier in January, slower than December's 6.60% rise, the Central Statistics Bureau (BPS) said Thursday. The rise was 1.04% on-month.

The trade surplus widened to $4.56 billion from $3.06 billion in November, as exports surged 6.5% on month to a record high $9.50 billion. Non-oil and non-gas exports rose 6.3% on month to $7.62 billion in December.

Full-year 2006 exports hit $100.69 billion, setting a new record, up 17.55% from 2005. In December, lower capital imports drove a reduction in total imports of 16% on month to $4.54 billion.

Indicators:
November 2006
December 2006
Growth on month
Full year 2006 growth
Total exports
$8.92 billion
$9.50 billion
6.5%
17.55%
Non-oil & gas exports
$7.17 billion
$7.62 billion
6.3%
N/A
December 2006
(m-o-m)
December 2006
(y-o-y)
January 2007
(m-o-m)
January 2007
(y-o-y)
Inflation
1.21%
6.60%
1.04%
6.26%
Full year 2005
2Q 2006
3Q 2006
4Q 2006
GDP growth
5.60%
5.2%
5.5%
6.5%*
Source: Central Agency of Statistics
* Bank Indonesia estimate
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#43806 - 07 Feb 07 23:13 Re: GOI/Global Bill to Launch, Fitch and Moody’s Raise Rating [Re: KuKuKaChu]
doremi Offline
Member+++

Registered: 17 Jan 07
Posts: 488
Loc: slouch couch
Those stats look good (gdp growth, single digit inflation rate, rise in export), however, the bondrating of BB medium--high risk rating? anyone knows who buy these bonds? mostly foreigners, Japanese, Singaporean? Auction on these bonds or tightly distributed (only offered to select people--the investment bankers)?

Kuku, interesting article.

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#43813 - 07 Feb 07 23:46 Re: GOI/Global Bill to Launch, Fitch and Moody’s Raise Rating [Re: doremi]
KuKuKaChu Moderator Offline
Pooh Bah

Registered: 09 Oct 05
Posts: 10790
Loc: Centre of the Universe
certainly the statistics are trending upwards across the board for the indonesian economy. of course, extrapolating future prospects for the economy from these figures is always problematic for a country like indonesia, where political stablity is tenuous and "natural" disasters endemic.

i really don't know who are taking up these bonds. certainly banks would be first in line.
_________________________
KuKuKaChu: dangerously too sophisticated

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#43855 - 08 Feb 07 03:12 Re: GOI/Global Bill to Launch, Fitch and Moody’s Raise Rating [Re: KuKuKaChu]
doremi Offline
Member+++

Registered: 17 Jan 07
Posts: 488
Loc: slouch couch
Kuku, that's the problem with these numbers. You have take it with a grain of salt. we need the numbers so we can make comparisons yet almost useless if the assumptions are baseless (not sure this is the right word)

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