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TGIF Monthly Wrap: May 2024


  • Microsoft's AI and Cloud Investment, PTBA's Coal Ambitions, FREN & EXCL Merger, Singapore Airlines' Profit Surge, Indonesia's Freeport Stake Push

By Falito Villienuve Tandra, Salma Farah Faiza, and Iman Satyo Adi

May 31, 2024 at 16:30 GMT+7



Microsoft Sign | Source: Reuters



Microsoft's historic US$17 billion investment in Indonesia aims to boost the nation's digital infrastructure and develop a thriving ecosystem of cloud computing and AI. Over four years, this initiative will create advanced data centers, enhance connectivity, and promote efficiency and innovation.


Microsoft's commitment includes training 840,000 individuals in AI skills, aligning with Indonesia's vision for inclusive growth by 2045. Collaboration with local developers and industries, such as banking, aquaculture, telecommunications, and education, highlights AI's transformative potential.


This investment positions Indonesia for technological superiority and economic growth, emphasizing Microsoft's dedication to digital empowerment and human capital development.

 

PTBA Mining | Source: Antara



PT Bukit Asam Tbk (PTBA) has received approval from the Ministry of Energy and Mineral Resources to produce over 60 million tonnes of coal by 2026, addressing rising domestic and international demand. 


This ambitious goal aligns with Indonesia's energy strategy and economic growth objectives. PTBA is investing Rp2.9 trillion in 2024 to enhance operational efficiency and infrastructure, allocating 25% of its previous year's net profit to these efforts. 


While aiming to strengthen its competitive edge and ensure sustainable development, PTBA faces scrutiny over its coal-centric approach amid market volatility and environmental concerns. These factors highlight the need for a balanced and sustainable strategy.

 

President Director of XL Axiata, Dian Siswarini (Right) | Source: Emiten



Indonesian telecommunication giants, PT XL Axiata (EXCL) and PT Smartfren (FREN), signed a non-binding agreement to explore a merger. This creates the possibility of a major industry player by combining their strengths. 


The goal is to improve customer experience through better services, wider network reach, and increased efficiency. However, this is in the early stages. Both companies need to complete due diligence, get regulatory approval, and finalize agreements before anything is official. 


Transparency is paramount, and updates will be provided throughout the process. If successful, this merger could establish a more formidable competitor, delivering an enhanced overall experience for Indonesian mobile phone users.

 

Singapore Airlines A350-900 | Source: KITTIKUN YOKSAP/Shutterstock



Singapore Airlines (SIA) achieved a record annual profit of S$2.68 billion for the fiscal year ending March 2024, driven by strategic capacity management and strong travel demand in North Asia. The airline increased its final dividend from 28 to 38 Singapore cents per share, underscoring its robust financial performance.


High load factors and talent growth were crucial to SIA's success. Despite challenges like supply chain issues and rising costs, the airline's performance has set a benchmark for the Asia-Pacific region.


SIA capitalized on its competitive edge by rapidly increasing capacity in reopening markets, leading to record net profits. This proactive strategy ensures SIA remains ahead in a complex global market.

 

Grasberg Mine | Source: Sika Indonesia


Indonesia Intensifies Push for 61% Freeport Stake


Indonesian President Joko Widodo said that the government wants to boost its stake in PT Freeport Indonesia to 61% from the newly raised 51%. At the inauguration of the GP Ansor board in Jakarta on Monday (5/27), President Jokowi revealed this strategic move. He said the gradual purchase, which began three-and-a-half years ago, was done discreetly.


With the revenue expected to rise significantly, Jokowi said the government would get 70-80% of it, he underlined the shift in ownership, describing Freeport as an Indonesian asset.


The acquisition, primarily funded through business channels rather than state power, is on track for full payment this year. Jokowi credited the swift repayment to surging global copper prices, expressing gratitude for the timely acquisition.


 

Sources:

Bloomberg

CNN

Reuters

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