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