Professional Documents
Culture Documents
28 January 2011
Table of Contents
PT Bank Danamon Indonesia, tbk.
Danamon Economic & Market Research
Table of Contents
Table of Contents................................................................................................................................................................. 2 Highlights for 2011 ............................................................................................................................................................... 3 Global Economic Outlook: Go East...................................................................................................................................... 4 Indonesia In the Face of Capital Inflows .............................................................................................................................. 5 The Real Economy: Another Good Year?............................................................................................................................ 6 Box 1: Gauging Household Purchasing Power............................................................................................................ 8 Inflation and Monetary Policy: Interest Rates Becoming a Last Resort?.............................................................................. 9 Box 2: Fuel Subsidy Cuts: Will Inflation Blow Sky High?........................................................................................... 10 Fiscal Policy: An Improvement in Spending? ..................................................................................................................... 11 Banking System and Liquidity Outlook: Will Returns on Liquidity Remain Suppressed? ................................................... 12 Balance of Payments: Expecting a Growing Portion of FDI ............................................................................................... 13 Box 3: Recent Trends in Foreign Trade - Exports ..................................................................................................... 15 Box 4: Recent Trends in Foreign Trade - Imports ..................................................................................................... 16 Fiscal Financing and Bond Market: A Higher Volatility Premium........................................................................................ 16 Additional Risks: Inflation, Asset Price Vulnerability and Political Stalemate ..................................................................... 18
Despite recent turbulence in the financial markets, Indonesia enters 2011 with optimism intact. Although some sectors may see softer growth rates compared to the extraordinary rebound year of 2010, we still expect stronger economic growth overall in 2011 (6.4% vs. 6.0% in 2010), supported primarily by domestic demand. Headline inflation is expected to rise further towards 7.2%, with some risk to the upside. Food and administered energy prices will be at the forefront in driving up the CPI; however we may gradually start to see a pass-through into core inflation. And eventually this will require a (stronger) degree of monetary tightening. Yet in spite of this, we dont expect any policy rate increase to be very strong. We see BI increasing its policy rate by only 50bps to 7.00% in total this year, which will mainly be done for signaling purposes and dampening the rise in inflation expectations. Furthermore given apparent concerns over monetary policy costs, we wouldnt be surprised if any rate hike is accompanied by more liquidity absorption measures, such as further hikes in reserve requirements later in the year. Meanwhile despite prospects of gradual Yuan appreciation, the global environment is still shaky so risk appetite could go on and off leading to abrupt episodes of broad dollar strengthening. This situation is paired with a domestic background of shallow financial markets and rising inflation. Therefore in the IDR bond market, investors may start demanding a higher volatility premium, and bond-related capital inflows may tend to be more moderate compared to 2010. But in spite of that, portfolio inflows will remain a swing factor for Indonesias balance of payments (despite expected improvements in FDI inflows), especially as the current account surplus would likely narrow further this year to around 0.2% of GDP. And since a volatile exchange rate would not be helpful for easing inflation worries, we expect BI to continue its regular interventions in the FX market and allow more swings in foreign reserves instead. We foresee the spot exchange rate ending the year at a slightly weaker position of Rp9,150/US$.
Please see the important disclaimer and information on the back of this report.
Discrepancies in interest rates and growth outlook will still direct capital to emerging markets
IN US
5 4
EU JP
2 1 0
Nov-10
May-01
Sep-02
Feb-04
Jun-05
Nov-06
Mar-08
Aug-09
Dec-10
Source: CEIC
Meanwhile in recent months, the prices of soft and hard commodities have rallied due to a variety of factors. Precious metals such as gold, which have store of value properties, rose in price in the midst pump-priming and rising debt levels in developed economies. However for commodities such as vegetable oil, crude oil and coal prices have been driven up by extreme weather conditions. According to the International Energy Agency (IEA), oil demand from OECD countries surged in 3Q10, linked in part to a post-recession rebound and abnormal weather conditions. Chinese oil demand also soared in October 2010 amid increased usage of small-scale gas oil generators, following the Chinese governments policy to close down inefficient coal-fired power plants by 2010. Going forward, the ingredients for a further rally in gold prices will still be intact. However we are not yet convinced that a rerun of a 2008-style rally in oil prices is underway. In the longer run we should expect to see a continued decline of fossil-fuel dependence in the OECD. Furthermore the supply side seems to be still able to absorb increases in demand. Oil inventories in the OECD are still above the five year average and OPEC spare capacity still stands at around 5.6mb/dwhich is far higher compared to the low 1.5mb/d levels seen in mid2008. From an expected average oil price of $80/bl in 2010, we expect oil prices to average a moderately higher $90/bl in 2011.
about unusually high levels of volatility, not to mention an increased likeliness of asset price bubbles. Excessive liquidity will also be a problem The capital inflows also act to increase the money supply and raise the costs of sterilized intervention. As of mid-January, outstanding open market instruments issued by BI summed up close to a staggering Rp500tn (7% of GDP), which translates to an annual interest payment of around Rp33tn assuming an average interest rate of 6.5%. Over the past six months, BI has quite effectively dampened the potential for inflows into SBIs; e.g. by replacing SBIs with term deposits and levying a minimum 1M holding period. But the government still needs foreign investors to finance the budget, so bond market capital inflows are still expected to continue. Accordingly excess onshore liquidity and exorbitant interest payments on monetary instruments may still be a key issue for monetary policymakers this year, which could mean that BI will be rather restrained in raising interest rates. One way out of this predicament is for BI and the government to jump-start the long-stalled plan to use government bills (instead of BI-issued instruments) in their monetary operations. There should be renewed momentum on this as cooperation would benefit both parties. The government is also looking for ways to fine-tune its debt management strategy, which is marred every year by wasteful excess financing.
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Fixed capital investment is also expected to continue growing. Construction activities might be constrained to some extent by the wet weather. However under an environment of relatively low interest rates and easy access to financing, we expect machinery investment to still grow robustly. Government infrastructure projects will also see some progress, though still at a slow pace. Meanwhile given the softer growth outlook on the global economy, export growth will probably be lower than 2010; however we still expect it to be positive. Indonesia will continue to diversify its exports towards emerging markets, although this may mean a greater portion of natural resources to total exports. On the supply side, growth among manufacturing industries has been relatively narrow-based; but we are encouraged about the nascent signs of revitalization within a number of industries. Investments in new machinery has been on the rise, and from digging through the trade data, we can see significant increases in machinery going towards manufacturing sub-sectors such as paper & printing, rubber and plastics, food and beverages. Meanwhile for labor intensive industries such as textile, there has also been an increase in machinery imports vs. 2009, but the figures are generally still below 2008 figures except for some sub-sectors such as leather and footwear. Yet it is important to keep our expectations generally in check, as unfortunately some sunset industries have yet to see light at the end of the tunnel: Machinery imports for metal rolling mills continue to decline year on year. Overall the revitalization of the manufacturing sector wont come overnight, as many infrastructure bottlenecks are still prevalent, which will take time to address.
Speaking of which, we note there has been progress in terms of infrastructure development; but a vast amount of effort is still needed. In the latest Global Competitiveness Report (2010 2011), Indonesia moved up in rank to 44, from 54 in the previous year (out of 139 countries). However this was mainly driven by better perceptions about the macroeconomic environment. Indonesias ranking on infrastructure is still far behind and only moved up two notches from th th 84 to 82. Specifically, roads were ranked 84 , ports 96 and electricity supply th 97 .
GDP growth
10 8 6 4 2 0 -2
% y-o-y
Services
Manufacturing
0 -5 -10 Sep-10
Primary Commodities
Data uses 2000p base year from Mar-04 Dec-06 Dec-08 Dec-10
Dec-02
Dec-04
Real Expenditure / Capita / Day (IDR) < 6000 (eq. $1.25 PPP) 6000 - < 10000 ($1.25 - <2 PPP) 10000 - < 20000 ($2 <4 PPP) 20000 - < 30000 ($4 <6 PPP) 30000 - < 50000 ($6 <8 PPP) 50000 - < 100000 ($8 - <10 PPP) >= 100000 (>$10 PPP) All
Source: BPS (Susenas), Danamon calculations. Red : Lower segment ; Orange : Middle segment ; Yellow : Upper segment. PPP: 2009 Purchasing Power Parity dollars
On electricity there has also been rather slow progress. A number of electricity development targets for 2010 were not met. Reportedly only around 52% of the targeted 1150MW additional capacity aimed for in 2010 was achieved. Meanwhile the development of new transmission lines were only partly met (30%) amid complications in land acquisition. Separately the draft law on land acquisition, which was originally planned to be made into a law in 2010, remains stuck on the drawing board.
11 10 9 8 7 6 5
4 3 May-12
Dec-05
Food Clothing
Dec-06
Dec-07
Dec-08
Dec-09
Housing Education, Recr.
Dec-10
In 2010 we saw a slight shift in the central banks policy focus away from the policy rate, coupled with an increasing reliance on liquidity management and macro-prudential measures. Several apparent issues were behind this trend: BI has been trying to keep a lid on monetary policy (sterilized FX intervention) costs, including the interest payments paid on its monetary policy instruments. It was also worried that raising interest rates might encourage more capital inflows into short-term money market instruments (especially SBIs). Furthermore BI, under the leadership of Governor Darmin Nasution, looks determined to push banks to extend more credit. Yet when taken together with developments in the money market, BIs actual monetary policy stance is less conclusive. Although the BI rate has not been changed, onshore interbank rates have been allowed to drop to a low point of 90bps increments below the BI rate, which is not consistent with monetary tightening. Furthermore BIs policy to penalize banks that have a Loan to
But interest rate developments and LDR linked required reserves policies are consistent with monetary easing
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Deposit Ratio (LDR) of less than 78% starting March 2011, further gives a confusing signal on its true monetary policy stance. So the markets have started to price in the risk of BI being behind the curve on inflation, which has caused yields to move upward by 100 200 bps since the start of the year. Given the abrupt rise in yields seen over the past weeks, we acknowledge a chance that BI could move sooner than our baseline scenario in April. Policymakers may start to realize that if worries over inflation remain unaddressed; the governments cost of financing this years budget deficit could become more expensive. In the event BI does move, we expect it will be by 25bps increments, as the purpose of any rate hike would be for signaling only (rate hikes actually could do little to address the recent food price surges).
1.5 1.0
0 -20000 -40000
0.5
-60000 -80000
Budget Deficit
0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
-100000 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
11
Banking System and Liquidity Outlook: Will Returns on Liquidity Remain Suppressed?
Domestic liquidity still abundant
In 2010, overall onshore liquidity was flush. Indonesias hefty balance of payments surplus helped propel money growth so that the money supply (M2) still grew by around 14% y-o-y in Nov-10 despite a contraction in net claims to the government. The amount of bank liquid assets (SBIs and call money) placed at BI increased to 12% of total assets in Oct-10 vs. 10% a year earlier, before primary reserve requirements (IDR) was raised from 5% to 8% in Nov-10. In the money market however, although the BI policy rate officially remains at 6.50%, the interbank and other money market rates have come down much to the result of BIs policies. In 2010, BI re-widened the band between the BI rate and the FasBI and later on their fine tune operations (which usually involved opening multi-day deposit facilities at close to the BI rate) were stopped effectively engineering a rate cut without explicitly doing so. Going forward, perhaps we can expect that any policy rate hike would be accompanied by a flattening of the money market yield curve, as BI may try to hold down the interest rate on SBIs and Term Deposits. And perhaps reserve requirements could be hiked again to further absorb liquidity. Excess liquidity will likely remain on BIs sight. Domestic liquidity may still be abundant although bank lending may grow by another 21% this year (vs. 22.8% last year). Net foreign assets may continue growing amid an expected balance of payments surplus. And with the implementation of PP 54/2010, which is expected to expedite government spending and reduce its cyclicality, the impact of liquidity from government operations should also be more positive.
Money market rates have come down significantly despite stable BI rate
BI may want to suppress any increase in interest payments resulting from a BI rate hike
Mid-sized banks may continue to see strong competition in gathering third party funds
In spite of all this, however, it is important not to be too focused on the aggregate numbers, and be mindful of the imbalances of liquidity position between banks. If we take out the top 4 banks in the country, competition for gathering funding among mid-sized banks have been quite strong and will probably persist in 2011. This can result in further increasing deposit rates.
24-Nov-09
13-Apr-10
31-Aug-10
18-Jan-11
12
80 75
6M SBI/TD
24-Nov-09
13-Apr-10
31-Aug-10
18-Jan-11
Whats interesting from the current account deterioration is that it was not due to a shrinking of the merchandise trade balance, but rather a fast rise in freight costs and income repatriation. The trade balance has remained fairly robust, which we believe has a lot to do with the changing structure of exports towards natural resources. As the portion of natural resource exports grow, the positive correlation between imports and exports is reduced. This is because natural resource exports has lower import content compared to the higher value added manufacturing product. However there is also a negative side to this, just like a double-edged sword; the trade balance becomes more sensitive to global commodity prices. Going forward, the services and income deficits will continue to widen. But we also expect export volume growth to soften this year amid a slower global economic growth outlook, while import growth may stay relatively strong given the relatively robust domestic demand. For example if one expects an increase in FDI inflows, then this is usually accompanied by a rise in capital goods imports. Overall we expect the current account surplus to continue narrowing in 2011 towards 0.2% of GDP (from an expected 1% in 2010). On the capital account, we expect capital inflows to be also strong, though probably not as robust as in 2010. Whats important to watch is the size of foreign direct investment (FDI) inflows, and its comparison against portfolio inflows (which gives us a proxy of the ratio of long term to short term capital inflows). The ratio of FDI to portfolios inflows probably increased to around 45% in 2010 from 23% in 2009. Our baseline is for this ratio to increase further in 2011. The higher the ratio the better, especially as the current account may eventually
Strong growth in exports of natural resources, which has low import content
13
turn into deficit in 2012. Overall, we expect BIs foreign exchange reserve position to increase further towards $116bn by end 2011. Speaking of which, sharper foreign reserve fluctuations will also be a key feature for this year. BI may continue conducting two-way interventions in the foreign exchange markets. As for the de facto FX intervention band, theres a chance of BI eventually widening it (as a too tight one encourages carry trade by eliminating exchange rate risk); however we expect policymakers to generally have low tolerance towards excessive foreign exchange market volatility, as it could further complicate the inflation problem. Meanwhile judging from the available trade data, we havent seen any dramatic problem in terms of export competitiveness. The real effective exchange rate is also only mildly stronger (around 3%) than its pre-crisis high. However going forward, as long as portfolio inflows dominate the balance of payments, BI may continue to build up their reserves; and this will limit the potential for IDR appreciation. Overall we expect the exchange rate to slightly weaken by the end of the year towards $9,150/US$.
App(-)/Dep(+) in IDRUSD (rhs) Trade-Weighted Exch. Rate Trade-Weighted Exch. Rate (Infl. Adjusted) IDRUSD Index
13000 IDR/USD 12000 11000 10000 9000 8000 Nominal Exchange Rate (LHS) M2 / Foreign Reserves (Adj. RHS)
IDR/USD
24 20 16 12 8 4 0 -4 -8
Dec-02
Dec-04
Dec-06
Dec-08
24000 Dec-10
Portfolio Inv
FDI
May-08
Nov-08
May-09
Nov-09
May-10
-1000 Nov-10
14
Table B3. Indonesia: Commodity share of non oil and gas exports to selected trading partners
'08 0.1 14.1 9.0 9.9 4.5 12.2 2.6 0.9 3.2 4.9 38.6 100 JP '09 0.2 19.3 8.1 6.0 4.6 17.5 3.6 1.4 2.3 5.4 31.7 100 '10 0.2 17.4 7.4 7.3 3.0 18.1 2.9 1.1 2.3 4.6 35.8 100 '08 3.0 1.1 6.2 16.4 3.5 0.0 2.2 28.2 0.6 2.2 36.6 100 US '09 1.0 1.4 11.0 8.2 4.2 0.0 2.3 32.9 0.6 1.8 36.8 100 '10 0.3 1.0 9.2 15.6 3.6 0.0 1.8 30.1 0.5 2.0 36.0 100 '08 27.9 8.3 3.5 12.4 3.2 9.1 2.6 0.3 0.4 2.1 30.3 100 CN '09 24.7 15.3 3.0 11.4 3.1 7.6 1.8 0.3 0.1 1.5 31.2 100 '10 14.0 33.9 3.3 10.3 1.1 9.3 1.5 0.2 0.3 2.0 24.1 100 '08 2.0 27.6 4.4 6.5 0.9 13.1 1.4 0.4 0.0 3.9 39.9 100 KR '09 0.6 38.8 5.1 3.5 1.4 16.6 1.3 0.8 0.0 3.3 28.5 100 '10 0.7 41.1 5.1 4.3 1.2 14.3 1.6 0.7 0.0 2.3 28.6 100 '08 18.4 5.9 5.4 6.9 3.8 5.1 1.5 10.2 1.2 4.6 37.1 100 EU-15 '09 15.0 6.8 9.0 4.1 4.2 7.1 2.0 11.9 0.8 3.8 35.4 100 '10 14.4 5.0 8.2 7.5 3.1 7.6 1.2 9.5 1.7 3.7 38.2 100
Animal or vegt. fats and oils Mineral fuels Elect. machinery, rec., TV Rubber and articles thereof Mech. appliances, boilers, etc. Ores, slag and ash Paper and paperboard Apparel & Clothing Vehicles other than railwa Wood and articles of wood Others All
Source: BPS trade statistics (Jan Aug), Danamon calculations. Note: JP = Japan, US = USA, CN = China, KR = Korea, EU-15= Austria, Belgium, Denmark, Finland, France, Gernmany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK.
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Table B4. Indonesia: Commodity share of non oil and gas imports to selected trading partners
'08 22.7 22.0 6.9 2.1 3.4 2.2 5.8 2.2 0.5 0.0 32.2 100 CN '09 25.4 23.3 2.7 1.7 3.6 2.2 5.4 0.8 0.1 0.1 34.6 100 '10 24.3 25.3 3.7 1.8 3.5 2.5 4.6 0.8 0.0 0.0 33.6 100 '08 28.7 13.2 10.3 13.3 2.5 3.3 4.7 0.1 0.0 0.0 23.9 100 JP '09 28.3 12.9 9.6 8.5 3.2 4.3 5.8 0.0 0.0 0.0 27.4 100 '10 30.6 11.0 9.2 10.8 2.6 3.6 5.7 0.1 0.0 0.0 26.6 100 '08 22.4 26 4.77 2.92 8.7 7.42 5.02 0.13 0 0.77 21.9 100 SG '09 21.7 21.3 3.71 2.06 6.79 6.4 5.36 0.1 0.01 0.46 32.1 100 '10 18.0 25.3 3.8 2.2 9.2 8.3 5.3 0.1 0.0 0.8 27.0 100 '08 17.5 5.6 3.2 3.3 2.5 2.9 1.9 0.1 6.6 10.3 46.2 100 US '09 16.6 4.7 1.6 1.8 2.5 2.7 1.3 0.2 2.6 25.6 40.5 100 '10 13.1 3.8 1.7 1.6 2.4 2.7 1.6 0.0 1.6 32.5 39.1 100 '08 19.0 5.3 2.4 30.5 4.0 6.2 2.0 0.3 1.7 0.0 28.6 100 TH '09 19.7 6.1 1.6 22.4 4.6 6.6 2.5 0.3 2.8 0.0 33.3 100 '10 18.6 5.7 1.5 25.8 3.7 6.1 1.9 0.2 1.2 0.1 35.1 100
Mech. Appliances, boilers, etc. Elect. machinery, rec., TV Iron and steel Vehicles other than railway Organic chemicals Plastics and articles thereof Articles of iron and steel Fertilizers Cereals Aircraft, spacecraft and parts Others All
Source: BPS trade statistics; Danamon calculations; Data for 2008 and 2009 are full year; 2010 data are for Jan Aug; Note: CN = China, JP = Japan, SG=Singapore; US = USA, TH = Thailand
Based on the 2011 budget, the bond issuance target for this year amounts to around Rp126.7tn (net) or Rp210.6tn on a gross basis. As usual, the MOF is targeting to front-load Rp38.5tn of t-bills, fixed rate bonds and IDR sukuk in 1Q10, which sums up to around 35% of our estimated full year forecast for conventional IDR bond issuances. However given the massive overfinancing in
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2010, as well as the cumulative financing surplus in excess of Rp95tn, the government probably still has slack if market conditions become significantly unfavorable. The government budget balance in January is usually in surplus, and in April tax revenues come in.
Fundamental story still intact, but near term risks on the horizon
In regard to bond yields, Indonesias favorable fundamental story of low debt levels, potential credit rating upgrades and relatively high interest rate differentials will still be intact. However it will have to be balanced against the backdrop of rising inflation, and a central bank that is constrained in its use of interest rates as a policy tool. We have been highlighting the narrow-based bond demand as a key source of vulnerability for the bond market. The heavy correction seen in the first weeks of January has underlined the fact that a bond rally without local participation is unsustainable. Therefore going forward, we expect bond yields to become more realigned with the inflation fundamentals. As the market becomes more demanding on the volatility premium, investors will likely be more selective and bond-related capital inflows may tend to be more moderate. As for the IDR bond market, recent data suggests that onshore demand for bonds have been emerging after the correction. However we posit that it is still limited to certain parts of the curve. Demand from local buy-hold investors are probably concentrated on long-end issues (15-yr and above) which have yields close to or in double-digit territory. Meanwhile domestic banks are probably watching the front end of the curve (5yr and below). We should mind that given the markets heavy foreign penetration and relatively narrow investor base, there is still risk of further turbulence in case the inflation outlook deteriorates further; therefore we prefer to stay low on duration. Considering the long term average spread between the 5-year yield and core inflation of around 400bps, we think that a yield of around 8.50% for the 5-yr appears sufficient to price in core inflation rising to 5.0%, along with a slightly lower long-term risk premium going forward.
Source: Bloomberg
Source: Bloomberg
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On inflation, many things can happen that could cause the headline to deviate from our forecast. If weather anomalies last longer than expected (into 2H10), food prices can be pushed up further. Further rising oil prices (>$100/bl) will also affect the gap between subsidized and non-subsidized fuel, which could lead to arbitraging, scarcity and full-fledged increase in transportation tariffs. The relatively high penetration of foreign investors in the financial markets (especially bond market) is also a risk, which increases vulnerability of asset prices in the event of a sudden reversal. The government is coordinating efforts to use idle funds in State-Owned Enterprises (SOEs) for supporting the bond market in case there is a sudden reversal. However the effectiveness and credibility of this scheme remains to be seen, as there is no clear amount on the potential size of any intervention. Meanwhile Indonesias political situation has been relatively cool on the surface, but the effectiveness of President Yudhoyonos coalition remains under question. In this regard, there is a risk that Indonesia may continue to be handicapped in delivering long-needed reforms and regulations. For example, the bill on the Financial Services Authority (OJK) has stalled; and the country still has no law governing crisis protocolsafter the bill on the financial safety net was torpedoed in 2008. We can expect the window for cooperation between President Yudhoyono and many of his half-hearted political allies will become smaller going forward, as preparations start for the 2014 election year.
100
F F
2004 2005 2006 2007 2008 2009 2010 2011
Dec-00
Dec-02
Dec-04
Dec-06
Dec-08
-50 Dec-10
18
2010 Rev. budget 992.4 743.3 249.1 1126.1 781.5 105.7 144.0 344.6 -133.7 2.1 133.7 107.5 n.a.
2010 Realized 1014.0 744.1 267.5 1053.5 708.7 88.3 140.0 344.7 -39.5 0.6 86.6 91.2 47.1
Difference 21.6 0.8 18.4 -72.6 -72.8 -17.4 -4.0 0.1 94.2 -1.5 -47.1 n.a. n.a.
2011 1104.9 850.3 250.9 1229.6 836.6 115.2 136.6 393.0 124.7 -1.7 124.7 126.6 n.a.
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9,050 1.30 82
9,350 1.30 83
9,150 1.35 85
9,150 1.40 85
9,250 1.35 85
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ANALYST CERTIFICATION We hereby certify that all of the views expressed in this research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views in this report. DISCLAIMER The information contained in this report has been taken from sources which we deem reliable. However, none of P.T. Bank Danamon Indonesia Tbk. and/or its affiliated companies and/or their respective employees and/or agents makes any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or completeness of the information and opinions contained in this report or as to any information contained in this report or any other such information or opinions remaining unchanged after the issue thereof. We expressly disclaim any responsibility or liability (express or implied) of P.T. Bank Danamon Indonesia Tbk., its affiliated companies and their respective employees and agents whatsoever and howsoever arising (including, without limitation for any claims, proceedings, action , suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a result of acting in reliance upon the whole or any part of the contents of this report and neither P.T. Bank Danamon Indonesia Tbk., its affiliated companies or their respective employees or agents accepts liability for any errors, omissions or misstatements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission there from which might otherwise arise is hereby expressly disclaimed. The information contained in this report is not be taken as any recommendation made by P.T. Bank Danamon Indonesia Tbk. or any other person to enter into any agreement with regard to any investment mentioned in this document. This report is prepared for general circulation. It does not have regards to the specific person who may receive this report. In considering any investments you should make your own independent assessment and seek your own professional financial and legal advice.
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