Darwin Financial Investing

Beginning in January 2010, the world was shocked by the potential debt crisis in Europe. The average public debt in the 16 EU member states 84 percent of gross domestic product or GDP in 2010. That’s well above the maximum limit of public debt according to the Stability and Growth Pact, which is 60 per cent of GDP.

Germany, the famous disciplined fiscal stability, will suffer an increase in public debt from 78 per cent of GDP this year. While the French public debt reached 75.8 percent of GDP in the third quarter-2008. Greek public debt will reach 120 percent of GDP in 2010. (Kompas, January 4, 2010).

In the Asian zone. Japan reported debt would reach 53.5 trillion yen, equivalent to 597 billion U.S. dollars, for the fiscal year 1 April 2009-31 March 2010. This new record in the history of the country’s debt.

Japanese Finance Minister Hirohisa Fuji in Tokyo, December 8, 2009, has hinted the Japanese budget situation will face serious problems (Kompas, December 9, 2009).

Indonesia has had government debt ratios of 89 percent of GDP in 2000, while total liabilities reached USD 1234.28 trillion. In October 2009, the ratio of government debt fell to as low as 30 percent of GDP, but the nominal debt increased to $ 1602.19 billion.

Why do governments around the world tend to be indebted to finance budget country?

One of the basic platform that can explain this is the preposition that expressed two Nobel Economics Prize recipient, Franco Modigliani and Merton Miller. Both are popular with the formulation prepositions M & M I and II.

Modigliani and Miller mengasosiakan preposisinya in business institutions. We have shown a tendency directed the state’s financial management such as financial management firms. This is because the financial management of companies judged more efficient, transparent, and effective.

Preposition M & M I stated, the value of an institution does not depend on the structure of capital, whether debt or increase the capital injection from its shareholders. A company that decides to finance its business by 70 percent debt and 30 percent of the company’s capital injection is the same value, although the composition is reversed, 30 percent debt and 70 percent of shareholder capital.

In the realm of state finances, shareholders are the people. The contribution of the people as a shareholder done through tax payments. The greater the tax paid, the lower the dependence of these countries from debt.

European zone facing a difficult situation because of their debt burden increase, while the lower tax payments because people depressed global financial crisis that hit since the end of 2008.

Ironically, the debt is taken in large numbers in 2009 are used to restrain the impact of worsening of the crisis, in the form of fiscal stimulus. However, the fiscal stimulus was not able to sustain significant economic recovery.

Then, in which the position of Indonesia in 2010? Government bond issuance target Rp 175.6 trillion. This is much higher than the total government bonds issued in 2009, ie Rp 144 trillion.

Judging from the ratio of debt to GDP will be no decrease it. Nominal GDP in 2009, in the position of USD 5401.6 trillion, while GDP in 2010 to $ 5981.37 billion.

With the increasing debt value, debt to GDP ratio is expected to fall from 30 percent in 2009 to be lower in 2010. This means, of funds derived from debt will be less in sustaining economic growth and operations of government.

But, back to the prepositions M & M I, shareholders do like the choice of debt because it would raise income per share owned. However, they also must be ready with another situation, namely a secondary party.

This is because any profits received by the company must first be used to pay obligations to bondholders or creditors, just next to shareholder dividends.

Thus, the more debt the government would take greater state revenues used to pay interest and principal debt. The rest had other needs, including building infrastructure, social welfare, and so on.

Second preposition

On Preposition M & M II, Modigliani-Miller warned of the risk for companies that continually push new debt. The greater the debt is taken, the higher the cost will be paid if deemed defaulted.

Shareholders are not satisfied if some of its earnings eroded by the number of debt to be paid. This means, the government needs to take into account the cost of bond issuance and withdrawal of debt that will appear along with the withdrawal of new debt.

In 2009, the Ministry of Finance noted the cost savings bonds and the issuance of debt of about Rp 15 trillion.

However, the total cost of bond issuance and withdrawal of the debt was Rp 95.49 trillion. This is relatively high because almost equivalent to nine times the budget of commodity price stabilization programs that only Rp 10 trillion. Budget represents the cost of infrastructure in 2010, ie Rp 93.35 trillion.

Finance Minister Sri Mulyani Indrawati has said, every penny of the debt should be obtained for investment. With the investment, every penny can provide greater benefits from an initial capital.

However, it seems that the Indonesian people still need to be patient because the ratio of debt to GDP is still about 30 percent. It takes extra efforts to boost tax revenue to be the only source of replacement debt.

admin | Credit & Loan | 02 15th, 2010 | No Comments »

PT Benakat Petroleum Energy Tbk (BBP) offers a prime shares earlier this year with a target to raise at least USD 1 trillion. Revenue funds from the sale of shares and warrants will be used for investment and working capital.

PT Benakat Petroleum is an energy company in Indonesia with a focus on increasing value through upstream oil and gas development and mining of various commodities coupled with engineering services, procurement and construction (EPC).

Benakat management along with managing underwriters emission shares have agreed to offer as much as 11.5 billion of new shares to the public offering price range of USD 120-USD 140 per share, in which for all the issued shares of warrants attached to as many as 6.5 billion in warrants.

Thus, the target acquisition IPO funds will be obtained a minimum of Rp 1 trillion for the ownership share of 38.34 percent. PT Danatama Makmur acting as underwriters managing the stock of emissions with the full capability of the entire issued shares. If the excess demand, then the party examine the possibility of removing Benakat additional same again.

According to President Director Benakat Wiguna Arifin, in a press conference on Wednesday (27 / 1), the Jak arta, income from the sale of fund shares and warrants will be used for investment and working capital, among others for the construction of oil and gas production facilities, coal, and stone manganese. The fund is also for the purchase of supporting equipment pr oduksi, and maximize return on the invested value.

Due Dilligence Meeting (DDM) and the public exposure made with Danatama Benakat as part of the initial offering period in the process of IPO shares, which performed to explore the initial interest from prospective investors both retail and institutional want any prospective underwriter of shares. Initial bidding process lasted from January 19 until January 28, 2010, with a target stock listing on the Stock Exchange is planned for Indonesia February 11, 2010.

We are optimistic Benakat IPO will get a positive response from various groups of investors both domestic and international. This can be seen from the positive response we got during the roadshows in several countries including Singapore and Hong Kong we have done, said Steffen Fang, Vice President of Investment Banking of PT Danatama Makmur.

Steffen added that oil and gas sector is believed to still be a prima donna and the mainstay of investment and has a bright prospect in line with national economic growth is conducive. This will encourage companies to get a regular cash flow and be one of the attractions for potential investors.

One of the maximum potential energy sources affiliated companies owned by PT Western Petroleum Benakat who has been working with PT Pertamina EP through cooperation contract to manage operations ar ea Benakat oil field operations West, Prabumulih, South Sumatra Province, the oil production areas of oil field operations West Benakat current average of 2000 barrels per day which will be increased to be 4000 barrels per day by the end of 2010.

Vice President Director Benakat M Suluhuddin Noor, said, since the takeover of management of the operating area of the West Benakat by BBP, BBP has increased production from the 77 existing production wells, from about 1,500 barrels of oil per day to about 2,000 barrels of oil per day within 6 months. Based on its development plan, PT BBP estimates of oil production more than 25 million barrels for a period of 15 years.

admin | Portfolio | 02 15th, 2010 | No Comments »

Fleet Japan Airlines (JAL) looks at Haneda Airport, Tokyo, January 15, 2010. Thinning wallet government no longer able to support the airline’s financial hole that had become a symbol of economic revival that the Rising Sun Country.
Japan Airlines, or JAL, the airline with the largest revenues in Asia, could not resist the financial burden. Management is in shambles for years, operational costs continue to rise, and pension costs are strangling the income is not matched by an increasingly eroded. Tough competition and the slump in passengers suffered JAL adds.

JAL finally declare bankruptcy and ask for legal protection for creditors is not required to auction off assets cheaply to the risk of not having the opportunity to restructure.

JAL has 25 billion dollar debt the U.S. and is the largest bankruptcy in corporate history outside Japan’s financial companies.

Why? JAL did not properly handled. Under the auspices of the government and the service to the community, JAL also must serve the routes that are not profitable.

JAL also carried away with the support and status as the Japanese flag carrier. This makes so little attention JAL’s financial performance. His debts little by little into the hill. On the other hand, shrinking assets. Market value for a long time only a small airline equivalent of Croatia.

Of government support for JAL, especially financial aid, making the nearest competitor furious JAL, Nippon Airlines (ANA), which assess the aid to be unfair and JAL JAL should follow the market and face competition.

The Yomiuri Shimbun newspaper reported JAL 151 domestic routes only filled less than 50 percent of passengers. Only 11 of the 99 JAL flights were filled more than 70 percent of passengers. The high cost of treatment at the airport and also hit profits JAL, which was in a position greater than the pole peg.

Began the 1960s, the Japanese Government to concentrate on building a new airport. However, in 1964, even before the construction boom in the airport, fast train appeared. This helped a blow to JAL.

The local and national politicians continue to lobby the government to build airports everywhere. Almost every prefecture of Japan has the airport. Airport to be opened 98 years ago in Shizuoka, about 50 kilometers from Mount Fuji. All airports should be served JAL.

Apart from the burden imposed to JAL, as long as it can still fly JAL. JAL wings can not be separated from the history of Japanese development. Devastated countries in World War II had managed to rise as an Asian tiger. Finally, the economic power of Japan ranked second after the United States.

However, Japanese people are now driving the high productivity of the 1960s had aged. Population growth also fell.

Japanese creativity, to create nonmanufaktur economic base, as well as drag. Japan continued to rely on the economy with its manufacturing base even with high quality. However, China recently became the largest competitor in the manufacturing sector. It is estimated that China’s economic strength will take second place, displacing Japan in 2020.

For years, Japan suffered deflation that would not go over. When nearly recovered, changing the global crisis hit. Sluggish economic growth, also discourage Japanese passenger flow past a very intense pleasure.

Strong competition from the airlines, both Asia and the U.S., also continued to hit the JAL, which is known safe and expensive.

It is the pride when the Japanese working at JAL. Secure family life, complete, up to benefit a very large pension. However, these benefits also gave birth to the financial problems at JAL.

The hope was there for JAL to exist. Of 134 Japanese companies that declared bankruptcy in 2004 and 2009 period, approximately 50 percent can improve. Only 1.5 percent of bankrupt companies liquidated, according to data from Teikoku Databank.

The companies on average take 1.7 years to get out of the process of restructuring. Maybe after three years of running the restructuring, JAL will be back up victorious.

However, it must be only in the form of a smaller company and no longer able to serve 217 airports in 35 countries and regions. JAL may also not be able to carry 53 million passengers as last year, which as many as 41 million is for domestic routes.

JAL will no longer be the world’s largest airline, in terms of frequency of regular flights like the past.

Nomura Securities analyst, Makoto Murayama, said JAL is also wrong about the calculation of market potential. ANA is much more professional and take into account competitive market prospects.

JAL had not been financially feasible. Supporting economic giant with an injection of government funds many times. “Economic giant in the world number two is aging, and aging also the glory of JAL in the air,” the writing on the news agency Agence France Presse on January 19.

admin | Economy | 02 15th, 2010 | No Comments »

Some people outside of Google’s China headquarters in Beijing, Thursday (14 / 1). Search engine companies in this virtual world continue to promise not subject to government censorship efforts of China, which increasingly sophisticated conduct cyber attacks to a number of sites of human rights activists. This protest action does Google do with the risk of losing the lucrative market in China because there are 360 million Internet users.
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By Rene L Pattiradjawane

KOMPAS.com – There are two important issue that marked the development and growth of globalization that gives economic progress in East Asia. First, concerning the dispute that Google Inc. faced with the Government of China. Both are at odds about the screening and surveillance of the U.S. company.

Second, the PRC’s economic growth in 2009 reached 8.7 percent. China’s economic expansion puts most populous country in the world that Japan has the potential to shift the position as the second economic power in the world after the United States.

Of these two issues, there are two factors intersect each other with each other, namely, globalization and sovereignty over it embodies the transformation of the international system. Many observers expect to face globalization and the sovereignty of a new era. Sovereignty will be weakened, marginalized, and even experienced transmutation from globalization.

From these two factors we must understand that the authorities in Beijing did not wish to control the Internet, but it gives a clear line between the delivery of opinions and a threat to communist rule in China.

The same time there are other factors that must be understood. The rulers in Beijing to see the network should be fairly free internet. These include encouraging the growth of baidu.com and alibaba.com as a search portal and the largest market in China. Portal that aims to support and sustain economic growth while supporting the communist monopoly on power.

Feuds or business

Google Inc supported Hillary Clinton’s Secretary of State, which accused the authorities in Beijing to infiltration of Google. China denied the accusations. However, Google should understand that China’s economic power is supported tremendous human resources that have special skills, able to operate an extensive system, technologically sophisticated, with an unlimited range of conduct Internet filtering in mainland China.

As mentioned above, another factor must be understood in telescoped internet network problems, namely the sovereignty and globalization. These factors are clearly understood and firmly by the various U.S. companies. China could shift the center of information and communication technology is also well positioned as the main pillar of the world of innovation.

Changes in landscape and the global conflict is obviously going to put Google Inc. reassess its position in dealing with Beijing. Because, in the evolution of globalization presents new phenomenon, but comes to competition between countries, as well as factors inherent sovereignty, universal values, there are also factors of competition between companies of a country. For example, Google Inc. must compete with Yahoo! and Microsoft to capture the China market.

China’s internet network to realize an important part and are integral to maintaining economic growth. Google Inc. was aware of China has the potential lucrative market for advertising that motto, “Not Doing Evil”, should be able to justify feud with Beijing and the business benefits it contains.

admin | Company Info | 02 15th, 2010 | No Comments »