RHB Indonesia Morning Cuppa - 1 July 2016- (Money Supply) Unknown Jumat, 01 Juli 2016

Good morning, Money Supply and Loan Growth Finally Picked-Up ¨ Indonesia’s money supply (M2) growth edged up to 7.6% y-o-y in May, from +7.1% in April and +7.4% in March. The increase was due to a pick-up in domestic operation, as loan growth and government spending disbursement increase. These were partly offset by a decline in net foreign operation, mostly due to foreign loans repayment. ¨ At the same time, total loans growth increased, on account of faster growth in loans extended for working capital and consumption. In the same vein, deposit growth surged in April, as an increase in savings offset a decline in demand deposit. Going forward, we expect demand for private credit to stabilise, aided by easing monetary policy and a rebound in economic growth that could induce more household spending and borrowing. ¨ Meanwhile, Indonesia rupiah (IDR) appreciated of late, mostly due to capital flowed back in after an outflow in the peak of seasonal income and dividend repatriation period last month. However, the IDR is still susceptible to uncertain global financial markets even though the selling pressure will unlikely be as severe as last year. As a whole, we expect the IDR to trade toward IDR13,200 in 2016. (Rizki Fajar)

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Media Highlights:

Economics Bank Indonesia to issue more certificates in Foreign Currency Indonesia Tax revenue dropped by 3.92% Corporates Government offers partial construction permit to KCIC The Ministry of Transportation (MoT) just offered the Kereta Cepat Indonesia China (KCIC) a partial construction permit for its Jakarta-Bandung High Speed Railway project. The MoT stated that it has offered the consortium a construction permit by the kilometre that was countered by the KCIC. The consortium stated that it is looking for a full construction permit and finished land acquisition process from the MoT. However, the MoT further stated that KCIC has not yet submit the detail engineering design (DED) to the ministry. (Bisnis Indonesia) Comment: Based on our meeting with KCIC management, they expect to obtain construction permit for 40% of the Jakarta-Bandung high speed train project land area by next two weeks. Currently, around 50% of total land area are owned by the consortium, including land from Perkebunan Nusantara (PTPN VIII), Jasamarga, and Kereta Api Indonesia (KAI). Thus, Wika expects to record IDR17trn new contract from HSR project by the end of this year. (Dony Gunawan) Catur Sentosa Adiprana to inject IDR200bn to Catur Mitra Sejati Sentosa Matahari Putra Prima to acquire additional 5% stake in MatahariMall.com Semen Indonesia and Pelindo I to create a JV Medco Energi acquired Newmont for USD2.6bn Best regards, Helmy Kristanto Director Head of Indonesia Research PT. RHB Securities Indonesia

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