You can contact the author (Teguh Hidayat) by email, The author live in Jakarta, Indonesia.

See my pictures in Instagram, @teguhidx.

Net Interest Margin of Indonesian Banking is Too High?

Thursday, February 18, head commissioner of the Financial Services Authority (FSA), Muliaman Hadad, said that the average of net interest margin (NIM) of banks in Thailand was 3 – 4%, or higher than in Indonesia. To be more comparable with other countries in the ASEAN region, the NIM of Indonesian banks will be directed to be 3 – 4% as well, whereby the FSA will require banks to lower the interest rate for loan. A day later, Minister of State-Owned Enterprises, Rini Soemarno, also appealed to the state-owned banks to lower their NIM to around 4% by way of sharing the IT systems and ATM, thus lowering operating costs, and consequently the performance of the banks will be more efficient.

Indonesia Stock Exchange: (soon) The Largest in Southeast Asia

You may hear the news that Indonesian Bank Central Asia (BBCA) has taken over the position Development Bank of Singapore (DBS) as the largest lender in Southeast Asia, in terms of market cap. And based on the experience, when a company has obtained a ‘largest’ title either in terms of market cap, asset, or the value of the equity, it must mean something. Moreover, you may rarely hear that Indonesian company was able to ‘beat’ the Singapore company, and that’s because in terms of capital market development, like or not, we are still far behind our little annoying neighbor. And maybe the question, what is the position of Indonesian companies and its Stock Exchange in Southeast Asia?

What is LQ45?

In January 25, the Indonesia Stock Exchange (IDX) released the latest list of stocks that become constituents of LQ45 indices. In the list there are three new stocks, ie Aneka Tambang (ANTM), HM Sampoerna (HMSP), and Hanson International (MYRX), where they replaced XL Axiata (EXCL), Indo Tambangraya Megah (ITMG), and Wijaya Karya Beton (WTON). Soon I received many questions: As of third quarter of 2015, ANTM suffered a loss of Rp1 trillion (about US$ 90 million), or in other words it had poor fundamentals, right? Then how could it became constituent of LQ45?