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Kapital News Highlight - August 13

Monday, August 13, 2018

A weekly highlight for your updated and forward-thinking financial insight : 

1. Indonesia and Malaysia have teamed up on a joint venture to produce a local brand vehicle for domestic use. The representatives of the two countries signed a memorandum of understanding (MoU) in Jakarta on last August 10, 2018 to begin a cooperation in establishing a new brand. This movement is also as a follow-up after Malaysian Prime Minister Mahathir Mohamad visiting President Joko Widodo in June. According to the Malaysian Automotive Institute (MAI) CEO Mohamad Madani Sahari, Indonesia and Malaysia were already capable of producing vehicles with 90 percent of local-made components. In the MoU, the two countries also agreed on developing the human resource development especially the automotive workers. (StraitTimes

2. According to researchers at Industrial Bank Co, China has 2.8 trillion yuan (US$410 billion) saved to boost the economy growth in the midst of the US-China trade war. The money comes from the profit land sales, unspent revenues, profit from state firms, and other sources.  Moreover, the extra funding also comes from public-private partnerships. The hoards, however, exceeds the targeted national deficit of 2.38 trillion yuan for this year. Furthermore, the hoards also shows that the country has the shield to fight against the US-China trade war. (Bloomberg)

3. Google is targeting 10 million small and medium enterprises (SMEs) in Indonesia to use its business services by 2020. According to Google Indonesia Marketing Head Veronika Utami, the company had offered some training courses for SMEs in Indonesia since 2015 and now has served 1 million SME customers. She added, the annual growth of SMEs in Indonesia showed a significant increase when they utilize Google services. This is also the opportunity for the SMEs to expand their business with Google. (Jakarta Post)

4. Indonesia's economy shows an increase of 5.27 percent in the second quarter of 2018 which get beyond Reuter projection of 5.16 percent. The growth was helped by robust consumption during the month of Ramadhan and the celebration after. However, the number still far below President Joko Widodo's growth target of 7 percent. This is due to multiple factors such as higher US interest rates that have influenced the rupiah currency and the US-China trade war that can hit Indonesia's commodity exports. Moreover, Indonesia's effort to help current deficit from foreign tourists in Bali and Lombok seems to be hurt by powerful earthquakes that hit Bali and Lombok since the end of August. A survey by the statistics bureau shows that consumers already turned pessimistic due to weaker income projection that makes the government even harder to achieve 7 percent growth target. (Business Times)

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