Govt upbeat on bond issue

Govt upbeat on bond issue

JAKARTA : Finance Minister Boediono said on Monday that he's
optimistic the government bonds to be issued on Tuesday will be
oversubscribed.

"I'm optimistic we will get as much demand as we did in
December," he told reporters.

The government will issue up to Rp 2.7 trillion in eight-year
bonds on Tuesday. Analysts expect investors will bid for a coupon
of between 12.40 percent and 12.50 percent.

When the government issued Rp 2 trillion in bonds in December,
the issue was oversubscribed more than three times due to falling
interest rates.

The latest bond issue will partly refinance Rp 7 trillion of
bonds maturing in June and July, Boediono added.

The government has appointed 42 banks, securities companies
and brokerage houses to take part in the auction of the
government bonds in the primary market. The auction will be
conducted by the central bank.

Included are ABN-Amro Bank, PT Bank Buana Indonesia, PT Bank
Central Asia, Citibank, Deutsche Bank, and Standard Chartered
Bank

The bonds will carry a fixed-rate of interest, which will be
determined Tuesday based on bids from the participants.

The government said it will adopt a multiple price policy for
the issue.

The government plans to issue around Rp 7.7 trillion in bonds
this year of which Tuesday's auction is the first batch. It
remains unclear when the next offerings will be. --Dow Jones.

BI sees GDP to grow 3.2 percent in Q1

JAKARTA : Indonesia's economy likely grew 3.2 percent on year
in the first quarter of 2003, down from 3.8 percent on year in
the previous quarter, Bank Indonesia said over the weekend.

"The decline in growth was mainly because of a decline in the
growth of private consumption," the country's central bank said
in a statement.

Private consumption has been the main driver of Indonesia's
economic recovery over the last three years as new investment
remains depressed.

Exports and new investment, which started recovering in the
fourth quarter of last year, continued to record slight increases
in the January-March quarter, Bank Indonesia said.

Exports rose 1.7 percent on year in the first quarter, the
central bank said. It gave no details as to how new investment
fared in that period.

Last week, Finance Minister Boediono said the government is
expected to miss its 4 percent economic growth target this year
because of the outbreak of the severe acute respiratory syndrome
in Asia and the war in Iraq.

Economists say Indonesia needs growth of over 4 percent to
reduce the high unemployment in the country. --Dow Jones.

Myanmar to ease rice policy

YANGON : Myanmar's military government is to scrap a 40-year-old
paddy procurement policy and loosen up its hold on rice exports
to make way for more private sector involvement, agriculture
officials said on Monday.

The decision, taken at a high-level junta meeting last week
and yet to be formally announced, would signify a dramatic change
in policy in a country where agricultural production and trade
has been tightly controlled for decades.

"The new policy will be introduced starting from the next
harvest season" later this year, a high-ranking official at the
ministry of agriculture told AFP.

The procurement method currently practiced allows the
government to buy up 10 percent of overall production at
officially fixed and heavily deflated prices.

The grain is then redistributed to government employees,
military personnel and their families as a subsidy, while the
rest was kept as reserve stock for emergencies and for export.

Under the new scheme farmers will no longer have to shoulder
the burden of selling a portion of their produce to the
government at prices as low as one sixth the prevailing market
price, experts said.

"This is a major policy shift obviously aimed at making market
forces take over, and is certain to make a positive impact on
rice farmers, who will be the main benefactors," one local rice
expert said. --AFP

S. Korea wants chip tariffs suspended

SEOUL : South Korea said on Monday it would cut exports of
computer chips to the United States if Washington agrees to
suspend heavy tariffs imposed on Hynix Semiconductor memory
chips.

The offer followed a preliminary ruling by the U.S. Department
of Commerce last week that dynamic random access memory (DRAM)
chips from South Korea were unfairly subsidized by the
government.

The ruling called for countervailing duties of 57.37 percent
on chips shipped by South Korea's ailing Hynix Semiconductor Inc.

"The government will offer to cut Hynix U.S. shipments under
the (tariff) suspension agreement," the Commerce, Industry and
Energy Ministry said in a statement.

The ministry said the U.S. Department of Commerce would have
until April 15 to respond to the offer.

"This government proposal does not mean that we accept the
U.S. preliminary ruling. The offer does not affect the future
probes before the final ruling comes out," it added. --AFP

HK retail sales down over 50%

HONG KONG : Hong Kong retail sales have fallen more than 50
percent since the outbreak of a virus which has killed at least
22 people in the territory, a retailers' organization said on
Monday.

Hong Kong Retail Management Association chairman Yu Pang-chun
told a press briefing local retailers need help to weather the
slump caused by the outbreak of Severe Acute Respiratory Syndrome
(SARS).

In Hong Kong, where 842 cases of SARS have been reported, many
residents have been trying to avoid public places as much as
possible because of fears of catching the virus.

Yu said the association has urged landlords to give a 50
percent rental reduction for three months.

The government said separately February retail sales fell 12.4
percent by value. The figures covered a period before the virus
outbreak and in the lead up to the start of the U.S.-led war
against Iraq. --AFP

Japan to help Vietnam's fiscal reform

TOKYO : Japanese Finance Minister Masajuro Shiokawa met on Monday
with Vietnamese Prime Minister Phan Van Khai and promised to
study ways to help Vietnam with its fiscal and tax reforms.

"It is important that (Vietnam) increases the transparency of
its political policy making. We should study ways to do that
together," Shiokawa said in the meeting, according to finance
ministry officials.

The visiting prime minister told Shiokawa his nation wanted
Japan's help in conducting reforms.

Khai called on Tokyo to assist Vietnam, as Hanoi considers
Tokyo "the most important partner in terms of trade, investment
and economic development," the prime minister was quoted as
telling Shiokawa.

Khai was scheduled to meet with his Japanese counterpart
Junichiro Koizumi later Monday. --AFP

Japan's foreign reserves rise

TOKYO : Japan's foreign exchange reserves rose by US$10.9
billion at the end of March to a record $496.2 billion, mostly
due market intervention to weaken the yen, the finance ministry
said on Monday.

Intervention during the month to buy dollars and euros
contributed to about $10 billion worth of the increase, a
ministry official said.

The stronger euro against the dollar also contributed to the
rise, the official said.

The foreign reserves consist of securities and deposits
denominated in foreign currencies, International Monetary Fund
(IMF) reserve positions, IMF special drawing rights and gold.

Of the March total, Japan's foreign currencies accounted for
$477.8 billion, gold $8.2 billion, IMF reserves $7.6 billion and
special drawing rights $2.5 billion, the ministry said. --AFP