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Indonesia Eyes $11 Billion in Capital Market Fundraising This Year By Reuters

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© Reuters. FILE PHOTO: A teller counts Indonesian rupiah banknotes at a teller in Jakarta, Indonesia, October 14, 2022. REUTERS/Willi Kurniawan

JAKARTA (Reuters) – Indonesia aims to raise capital market funds of 170 trillion rupiah ($10.92 billion) for this year, including from initial public offerings and debt instruments, far less than the amount sought, the country’s financial watchdog said on Monday. Collected in 2022.

About 260 trillion rupees were raised through the capital market last year, including the initial public offering of big tech company PT GoTo Gojek Tokopedia, which raised $1.1 billion in April.

Inarno Djagadi, head of capital market supervision at the Financial Services Authority, said 84 offers are in the pipeline with an estimated total value of 81.41 trillion rupees ($5.23 billion).

About 54.5 trillion rupees of that will be from 58 potential IPOs.

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Among the companies expected to go public in 2023 are two units of the state energy company Pertamina, Pertamina Geothermal Energy and Pertamina Hulu Energi.

People familiar with the matter told Reuters in December that Pertamina Hollow Energy could raise as much as $2 billion.

State-Owned Enterprises Minister Eric Thuhir said at a separate event on Monday that Palm Oil Palm Growers, a unit of state plantation company PTPN III, may launch an IPO as early as this year.

($1 = 15,570,0000 rupees)

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Economic

Kenya Will Not Default – President Ruto By Reuters

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© Reuters. From file: Kenyan President William Ruto accompanied by Robert Kibuchi, Commander of the Kenya Defense Forces, after inspecting a guard of honor by the Kenya Defense Forces during the 59th Republic Day or Independence Day celebrations at Nyayo Nat.

NAIROBI (Reuters) – Kenyan President William Ruto said on Wednesday that his country will not default on its debt and plans to increase tax collection in the next two years.

The Ruto government, which took over in September, has pledged to rein in prohibitive commercial borrowing in favor of cheaper sources such as the World Bank to reduce debt service pressures.

The east African country’s public debt rose during an infrastructure-building drive under Ruto’s predecessor Uhuru Kenyatta, prompting warnings from rating agencies.

“This is our country that will not default. I want to give you my assurances. Our country will not default. We have put the brakes on any further borrowing,” Ruto said in an extensive interview with Kenyan media. outlets.

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He added that the government aims to collect an additional Sh1 trillion ($8.11 billion) in taxes over the next 24 months, and reiterated plans to cut borrowing by Sh300 billion in the current fiscal year that runs until the end of June.

Like other frontier economies, Kenya has found it nearly impossible to raise money from the international bond markets in 2022 due to high yields.

In June, it had to cancel a planned Eurobond issue and is seeking alternative sources of financing.

In February last year, Fitch Ratings said rising levels of government debt and global interest rates were raising downgrade risks in as many as 10 African countries, with Kenya, Ghana, Lesotho, Namibia, Rwanda and Uganda threatening.

($1 = 123.3000 Kenyan shillings)

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When wage inflation works for you

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This article is an on-site version of Martin Sandbo’s Free Lunch Handout. Participation here Get our newsletter sent straight to your inbox every Thursday

Happy 2023 and welcome back to Free Lunch. I hope all readers had a comfortable break.

in a last column Before the break, central banks cautioned against seeing rapid wage growth as necessarily an inflationary risk that warrants tighter monetary policy to curb jobs and income growth. It could instead reflect a more competitive labor market – more competitive for workers, ie. If more workers are shifting from worse-paying to better-paying jobs, wage acceleration is an equally welcome indicator of labor redistribution toward more productive activities. (After all, the employers to whom workers move can only pay these higher wages if productivity justifies it.)

I can refer to it just by scrolling in the column, so here I’d like to give more credence to the recent excellent research indicating that this is exactly what is happening, at least in the United States. Last month David Autor of the Massachusetts Institute of Technology presented his findings with Arindrajit Dube and Annie McGrew from US population survey data — you can watch his presentation for yourself. here. I want to highlight four of the most telling graphs from ship surface.

First, wage growth has been much stronger for the lowest paid since the start of the pandemic, sharply reversing decades of rising wage inequality:

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This latest wage pressure is broad-based: it has occurred between professions, between young and old, among those with less and more education, and in favor of minorities.

Second, even though inflation has risen, low-income earners still see real wage growth:

(This is true even for a period shorter than just the last 12 months.)

Third, people are moving between jobs much faster than they did before the pandemic:

Job mobility has increased particularly among young workers with little formal education; For example, these people are more likely to have previously been stuck in bad, poorly paid jobs.

Fourth, by far the largest acceleration in wage growth is among those who change jobs rather than those who stay:

Note that the graph shows two separate things: that wage growth is always higher for job changers, and that this advantage over remainders has nearly doubled in size in today’s strong labor market.

This should make us rethink the standard story we’re told about a seriously “narrow” job market. For example, common indicators of a high temperature may not be what we think. In particular, higher vacancy rates may not be a sign that excessive demand is putting upward pressure on prices, but rather reflect a larger number of lower-paid workers (particularly lower-paid workers). After all, the more workers move, the more you can expect employers to look for new employees. We should therefore expect a higher vacancy rate for any given case than the total demand. (In fact, alternative measures of job vacancies indicates that the US labor market is less “tight” than it appears by a conventional measure.)

More importantly, if increased job mobility leads to higher productivity–as Autor and his colleagues say in theory–then the current labor dynamics should expand the economy’s productive capacity. That would be a force for minimumNot higher rates – thus a reason for central banks to relax rather than tighten monetary policy.

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However, this speculation is underscored by the fact that, as of now, it is difficult to quantify the productivity increase in numbers (contrary to what happened early in the pandemic). As the latest New York Times a story Turns out, many companies find that overstaffing temporarily lowers productivity because more time needs to be devoted to training.

But the key word here is “temporary”. Look at output per hour worked in the United States in the chart below: It fell in the first two quarters of 2022. But that drop came after a spike in the early pandemic that lasted for more than a year. (Productivity rose again in the third quarter of 2022 on an entire private-sector basis, but fell further for non-financial firms.)

Line chart of US production per hour worked, 2012 = 100 showing US productivity holding up well during the pandemic

So, examine how productivity has behaved over the entirety of the pandemic, including lockdown and recovery. Taking into account available data for the past three years, from the third quarter of 2019 to the third quarter of 2022, non-farm business output per hour worked grew by 1.6 percent annually (1.3 for the non-financial corporate sector). This was about the same rate of productivity growth as in the previous three years, and faster than the average rate in the previous 12 years (a period that included the previous big crisis). So productivity remains at or above the pre-pandemic trend. Considering all the turmoil over the past three years, this is a solid record.

I met Dube, one of the researchers, to hear more. (The Free Lunch Show previously worked on minimum wage And supplements of the epidemic era in the United States unemployment payments.) He said their interpretation of the data was in fact that workers were moving from lower-productivity jobs to higher ones, but wondered if we should expect it to show up in the overall productivity data amid “all the background noise” of closings and reopenings. There may also be “growing pains” related to hiring and training, he noted: “In the meantime, new workers may not be as productive in the short term.”

So we must watch how the productivity data evolves. But there is at least reason for optimism. and – in my own view at least – similar room for caution on central bank tightening. “The usual story about how a wage-price spiral can take hold is that inflation expectations change and workers negotiate wage increases,” Dobie noted. But the rest of the work, he says, “didn’t [had] Unusually high wage growth. It’s all driven by job switching.” This “limits the scope for inflationary pressures” from the wage increases that have already been observed, says Dube.

To reiterate, these results are for the US economy only. While most of Europe also shows historically high job vacancy rates, I didn’t find timely data on job-to-job moves to see if that rate had risen as well (Free Lunch readers, send me any pointers). So even if this benign view of wage growth holds true for the US, it’s not so clear-cut for Europe. Doby points out that stronger minimum wage laws mean Europe has fewer low-paying jobs driving his team’s results in the US. “Another reason this happened more often in the US is that we pursued what seemed paradoxical at the time to be a worse way to help” — letting people lose their jobs and pay unemployment benefits rather than protect labor relationships with vacation payments.

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Other readings

  • Over the Christmas holidays, I noticed a number of sometimes surprising pieces that in various ways reflected the biggest economic and political issues of the year that just ended. Start with the wonderfully weird way he is Cinderella reflects protectionist industrial policy: Charles Perrault, who wrote The Fairy Tale of the Girl with the Glass Slipper, was also responsible for equipping the Palace of Versailles – including the Hall of Mirrors – and setting up a national glass factory, ensuring that at a time of economic nationalism (we would say today “resettlement”) it was furnished Sun King’s most exquisite ballroom with locally sourced products.

  • Meanwhile, the global automakers Calmly cut ties with china.

  • My colleague Jemima Kelly, who has always seen the crypto bubble for what it is, writes about it What the Sunnah taught us in coding.

  • Tales from Coal, or rather Factory Earth: How European Manufacturers adapt With energy prices rising, how a The chocolate maker uses robots To manage labor shortage.

  • China’s shift in Covid-19 policy may have an unexpected reason: how is the zero Covid approach exacerbating inequality.

  • Vladimir Putin, a history lover, somehow never mentions Nicholas I, the dead tsar is the most similar.

news figures

  • International Monetary Fund to caution A third of the global economy will suffer from recession this year.

  • The ‘moderate premium’ that drove up UK borrowing costs after September’s ‘mini’ budget has largely disappeared from gold yields – but not from mortgage rates, Chris Giles Find.

  • GermanAnd the French And the Spanish Inflation is slowing more than expected. From He thought?

Line chart of fixed rate mortgage rates (all loan-to-value) and OIS rates (%) showing that mortgage costs are decoupled from the underlying money market rates

Lex Newsletter – Follow a message from Lex hubs around the world every Wednesday, and review the best comment of the week every Friday. Participation here

not surrounded Robert Armstrong explains the most important market trends and discusses how the best minds on Wall Street respond to them. Participation here


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Big Pharma Pushes European Stocks Down; Inflation data in focus, by Reuters

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© Reuters. FILE PHOTO: A chart of the German stock price index DAX is pictured at the Frankfurt Stock Exchange, Germany, December 30, 2022. REUTERS/Staff

By Bansari Mayur Kamdar

(Reuters) – European stocks fell on Thursday, led by pharmaceutical companies lower ahead of euro zone inflation data, while minutes from the US Federal Reserve’s December meeting showed the central bank is committed to curbing inflation.

The European index was down 0.2% by 0920 GMT, after rising more than 3% in the first three sessions of 2023.

Wednesday’s minutes from the Fed’s December monetary policy meeting showed that officials were concerned about a “misperception” in financial markets that their commitment to fighting inflation was waning, even though they agreed the central bank should slow the pace of its monetary tightening.

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Danny Hewson, an analyst at AJ Bell, said the market had hoped the minutes would be “the blueprint for a pivot.” “What we got from the Fed minutes was a reality check.”

Healthcare stocks fell, with pharmaceutical giants such as Novartis AG and Sanofi (NASDAQ: lost more than 1% each.

“The update from the World Health Organization that there was no new variant coming out of China made investors think there wouldn’t be the payday they expected,” Hewson added.

“The other thing that will weigh on investors’ minds is inflation and the cost of living crisis because governments and consumers are having to think about where they are spending their money.”

Luxury stocks with exposure to China such as LVMH and Hermes International (OTC:) fell more than 1% each, as rising COVID cases in the world’s second-largest economy fueled concerns about demand.

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After roughly 2022, European stocks had a strong start to the year, buoyed by economic data showing a milder-than-expected recession and easing price pressures in some countries, along with hopes for a post-COVID recovery in China.

Investors await producer price data, due at 1000 GMT, for clues about the impact of the European Central Bank’s aggressive tightening to curb inflation.

British clothing retailer Next jumped 7.8% after it reported better-than-expected fourth-quarter sales and raised its 2022-23 profit forecast.

The retail sector led the sectoral gains in early trade, rising 2%. Retail stocks took a hit last year, posting their worst annual performance since 2008, as rising interest rates and high inflation squeezed household balance sheets.

German exports unexpectedly fell in November as high inflation and market uncertainty continue to weigh on Europe’s largest economy despite fading supply chain problems.

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Ryanair gained 5.9% after raising its forecast for after-tax earnings, citing recently pent-up travel demand while warning that COVID and the war in Ukraine were still weighing on its results.

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