Category

Multi Strategy

Brief Multi-Strategy: Eagle Hospitality Trust IPO Trading Update – Even Though the Yield Looks Enticing Concerns Remain and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Eagle Hospitality Trust IPO Trading Update – Even Though the Yield Looks Enticing Concerns Remain
  2. WHO Officially Decides Gaming Addiction Disorder as A “Disease” – Impact on the Nexon Sale?
  3. May Departs Unlamented: The Trouble Starts Now, with Real Brexiteers Likely in Charge
  4. UK: Consumers Keep Outspending Peers
  5. China Housing: Highlights From the ‘Baywatch’ Report On The Greater Bay Area (GBA)

1. Eagle Hospitality Trust IPO Trading Update – Even Though the Yield Looks Enticing Concerns Remain

Share%20price%20with%20volume

Eagle Hospitality Trust (EHT SP) (EHT) raised around US$565m via its IPO on SGX. The initial portfolio will comprise of 18 hotels in the US with an overall valuation of US$1.27bn. 

I covered the company’s background and other fundamental aspects in my earlier insights:

In this insight, I will re-visit some of the deal dynamics and provide a table with implied valuations at different share prices.

2. WHO Officially Decides Gaming Addiction Disorder as A “Disease” – Impact on the Nexon Sale?

The World Health Organization (WHO) finally made its long-awaited decision on officially classifying game addiction disorder as a disease on May 25th. In June 2018, the WHO already included gaming disorder on the “11th revision of its international classification of diseases.” The WHO has been reviewing this issue for nearly 11 months and it finally made its decision on classifying it as an official disease. 

Will this issue become a “deal breaker” for the Nexon sale? No, we do not believe that WHO finally deciding that gaming disorder is a disease will serve as a deal breaker. Nonetheless, we believe that it will have a negative impact on the game industry as a whole and will be an important factor that could bring down the potential purchase price. 

Three Key Issues of WHO’s decision to Classify Gaming Addiction as Disease to the Nexon Sale:

  • How much has the market already taken this into account? 
  • Gaming taxes? 
  • Greater negative perception of gaming

3. May Departs Unlamented: The Trouble Starts Now, with Real Brexiteers Likely in Charge

Theresa May’s prime ministership has come to an ignominious end, with her last throw of the dice — a revised version of her Withdrawal Agreement that she wanted to present to the Commons with many elements favoured by Labour — drawing a complete blank. Her revised draft had included the possibility of a Second Referendum (a no-no to Brexiteers) but mainly entailed elements of a permanent Customs Union. The hedged plan was quickly rejected by almost all those to whom it was aimed at appealing. Apart from ceremonial roles, May’s prime ministership is over: she will resign as Conservative Party leader on 7th June (a fortnight hence), following which the party will choose a new leader through a potentially lengthy process.   

Boris Johnson is the favourite to become the UK’s next Prime Minister, with other Brexiteers (Dominic Raab and Michael Gove) seen as his most credible rivals. With the time-table requiring the negotiations with the EU to be completed well before the next Leave date of 31st October 2019, the probability of a No-Deal Brexit is high. The main problem arising from that will be the need for a new border between Northern Ireland and the Republic — something that is very unpopular in Northern Ireland, and will likely trigger demands for a referendum on Irish Re-unification (given that Northern Ireland voted to Remain in the EU, by a 56-44 margin).  Scotland (another Remain region) too is likely to trigger moves to leave the UK if it is leaving the EU without a deal. 

This is extremely negative news for Sterling and UK equities. The only slight hope for Sterling (GBP) is that no front-runner has won the Tory party leadership in the past 30 years. The downside is that, even if Boris fails again, most of the other alternatives are Brexiteers too. Remainers in the Conservative Party are too singed by Theresa May’s experience over the past 3 years to want to take up the poisoned chalice she is bequeathing. But amid the extreme uncertainty — and high probability of a No-Deal Brexit, with all the chaos that will engender — the GBP is a clear Sell. 

4. UK: Consumers Keep Outspending Peers

2019 05 24%20ret1

  • UK retail sales remained elevated in Apr-19 after surging in recent months. Annual growth was several tenths above expectations again. Payback towards the brisk underlying trend is still likely, though, not least because real wages have stalled.
  • British consumers have matched their bullish expenditures abroad while visitors to the UK have maintained sterling spending levels, despite devaluation. Brexit uncertainty has not stopped UK households from outspending their global peers.

5. China Housing: Highlights From the ‘Baywatch’ Report On The Greater Bay Area (GBA)

Screen%20shot%202019 05 23%20at%2019.06.38

Following on from our original note on the Guangdong – Hong Kong – Macau Greater Bay Area (GBA) from the day of the blueprint announcement on February 18, we are presenting the highlights from our inaugural ‘Baywatch’ report focused on the housing markets on the mainland of the GBA. For the essentials on the GBA, see Bondcritic’s China’s Greater Bay Area: The Essential

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: All’s Well That Ends Riotously / Paid Hoods Discredit Prabowo / Risks Subside / 11% Official Margin and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. All’s Well That Ends Riotously / Paid Hoods Discredit Prabowo / Risks Subside / 11% Official Margin
  2. The Global Recovery Narrative Crumbles
  3. Bitcoin, Revisited
  4. Brexit: Restacking Negotiation Teams
  5. Nexon Sale: Market Talkings Update, Incl. Bid Schedule Extension

1. All’s Well That Ends Riotously / Paid Hoods Discredit Prabowo / Risks Subside / 11% Official Margin

Trade%2019 05 24

Long-awaited demonstrations on behalf of Prabowo proved far smaller than the Gerindra chair needed — meanwhile, police exposed how some 2,000 paid thugs rioted on his behalf, which discredits his cause.   Tensions are likely to subside as the denouement of a court appeal unfolds through 28 June.  Despite some 8 deaths in the rioting, Widodo has maintained the all-important moral high ground.  Official election results show Widodo having won by an 11.0% margin.  A breakdown by province suggests that identity politics was indeed at the fore. 

Politics: As many as eight fatalities occurred in two nights of rioting on 21-23 May – but the bulk of those actively rioting were clearly professional thugs hired to attack police.  A different group consisted of peaceful and orderly demonstrators complaining of supposed election fraud – but these numbered no more than 10,000, which pales in comparison to the one million that Islamic groups mobilized in Jakarta last December.  Police claim that several pro‑Isis militants carried handguns.  Police used assertive public communications to expose the sordid characteristics of rioters, which has discredited Gerindra Chair Prabowo Subianto.  There were over 700 casualties and 257 arrests.  Events portray the Prabowo camp as having stooped to paying goons to run amok, tarnishing Indonesia’s democracy.  Consequently, motivating genuine supporters to publicly protest far‑fetched claims of fraud will be even more difficult for Prabowo.  But much still depends on explanations for the deaths of rioters: at least one reportedly died of a bullet wound, but police are adamant that none in their ranks used live rounds (Page 2).  Authorities arrested a pro‑Prabowo former Special Forces (Kopassus) commander, Maj Gen (ret) Soenarko, for having allegedly smuggled M4 carbines into Indonesia (p. 7).

Election Results: The General Election Commission (KPU) disclosed the official final vote count for both contests.  Widodo’s margin was 11.0 percent (p. 9).  Prabowo finally decided to lodge an electoral appeal with the Constitutional Court, which aims to issue a verdict on 28 June.  Justices are highly unlikely to overturn Widodo’s win (p. 14). 

Justice: The president formed a Selection Committee (Pansel) for nominees for the Anti-Corruption Commission (KPK).  The roster is strong overall and concern from critics may be overdone (p. 15).  State Sports Minister Imam Nahrowi faced court testimony from witnesses who say they made kickback payments to him totaling Rp11.5 billion (p. 15).

Produced since 2003, the Reformasi Weekly Review provides timely, relevant and independent analysis on Indonesian political and policy news.  The writer is Kevin O’Rourke, author of the book Reformasi.  For subscription info please contact: <[email protected]>.

Economics: The rupiah has been sliding amid international uncertainties and the  persis­tent current account deficit, but pressure from domestic political tensions may lift (p. 16). 

Outlook: Despite deaths of eight rioters, Prabowo suffered disgrace from demonstra­tions in Jakarta.  Peaceful ralliers were few in number, while police produced compelling evidence that the Prabowo camp hired hoodlums to wreak havoc.  When Prabowo finally called on protesters to retire and rest, he was – in effect – finally acknowledging his election defeat.  Any additional demonstrations seem unlikely to be significant and Prabowo’s court appeal may be an uneventful dénouement (p. 18).

2. The Global Recovery Narrative Crumbles

4

The US equity market was running with an optimistic assessment that there is a Trump and Fed put, that a trade deal and Chinese policy stimulus would generate a recovery in the global economy and the US economy was largely immune to a slowdown in activity abroad. However, the tariffs have been increased, trade talks have stalled, and the US has rolled out bans on Chinese tech companies.  The evidence grows that there is a structural rift in US-China trade relations. The rebound in Chinese economic activity in March was not backed up by data in other Asian exporter nations or Europe through April.  Chinese activity data slumped again in April, and the latest PMI data in the Eurozone, Japan and the USA for May are weak. Oil and copper prices have turned lower, suggesting that industrial activity remains weak.  We continue to see downside risk for still elevated US equities.  The strength in the USD to date is contributing to downward pressure on US equities.  The gains in the USD may have become over-extended.  China may pursue a more stable CNY for a period and lower US yields should support safe haven currencies, JPY, CHF and gold.

3. Bitcoin, Revisited

Screenshot%202019 05 23%20at%2020.26.51

Bitcoin and the block chain were created just over ten years ago, as a means to create peer to peer transactions without the need to use financial institutions to process the payments. 

However, frequent hacks of Bitcoin exchanges, in addition to the significant past fluctuations of Bitcoin prices, have put mainstream usage off and slowed the adoption of the cryptocurrency.

Is this about to change now?

4. Brexit: Restacking Negotiation Teams

  • Failure to agree on a compromise deal with the Labour leadership has left the Conservatives with a Withdrawal Bill bleeding more support than it is gaining, and the Prime Minister seems set to resign soon.
  • A Eurosceptic replacement Leader, like Boris Johnson, still seems most likely, but they will have to agree on withdrawal and future trading arrangements. I now see the probability of a deal, no deal and no Brexit at 50:30:20 (55:25:20 before).
  • New European leadership is unlikely to upend the current deal but could bring some flexibility following the political breaks. A compromise and more time to consider it or leave with no deal looks like the way forward, in my view.

5. Nexon Sale: Market Talkings Update, Incl. Bid Schedule Extension

This is the latest update on Nexon. We had two Nexon related news reports, put out by Seoul Economic Daily and Invest Chosun, in the past two days, especially in relation to the bid schedule. We also had some market speculations. This post is my summary of these report and market speculations.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: Smartkarma’s Week That Was in JP/​​​​​​​​​KR: -0.3% GDP Growth, Intel’s Warnings, & The Next Joker? and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Smartkarma’s Week That Was in JP/​​​​​​​​​KR: -0.3% GDP Growth, Intel’s Warnings, & The Next Joker?

1. Smartkarma’s Week That Was in JP/​​​​​​​​​KR: -0.3% GDP Growth, Intel’s Warnings, & The Next Joker?

Pos

  • KOSPI is up 7% YTD and Nikkei is up 11% YTD. 
  • South Korea reported horrible GDP data in 1Q19. It was reported in the past week that South Korea’s GDP declined 0.3% QoQ in 1Q19, which was the worst figure in nearly 11 years since 2008. What’s so bad about this is the fact that back in 2008, all the major economies were in the midst of the Great Recession whereas today, that is not the case with the US economy that is in much better shape as compared to other emerging countries such as South Korea.
  • Intel Corp (INTC US) and Texas Instruments (TXN US) made warnings on the semiconductor sector this week. Intel now expects revenue of $69 billion in 2019, down 3% YoY. This revenue guidance is 3.5% lower than its previous guidance given in January 2019.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: Japan Banks – Unloved for Many Reasons and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Japan Banks – Unloved for Many Reasons

1. Japan Banks – Unloved for Many Reasons

1

The Bank of Japan (BOJ) offers negative interest rates on monies deposited. Japan’s banks are largely wholesale, with lumpy corporate loans and in many cases, where they look after corporate interests more than shareholders. Some consider the largest banks in Japan like closed-end mutual funds – but with credit risk -due to their gigantic equity holdings. These all remain valid reasons to shun Japan’s banks in favor of others in the region.  Credit costs are another concern. With BOJ’s new announcement of continuing low rates there remains even less hope that loan volume will support profit and that NIM pressure will remain. A negative delta in credit costs is not easily absorbed by anaemic ROA. 

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: Japan Banks – Unloved for Many Reasons and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Japan Banks – Unloved for Many Reasons
  2. LG Electronics’ Decision to Halt Smartphone Production in Korea – No Mas!

1. Japan Banks – Unloved for Many Reasons

1

The Bank of Japan (BOJ) offers negative interest rates on monies deposited. Japan’s banks are largely wholesale, with lumpy corporate loans and in many cases, where they look after corporate interests more than shareholders. Some consider the largest banks in Japan like closed-end mutual funds – but with credit risk -due to their gigantic equity holdings. These all remain valid reasons to shun Japan’s banks in favor of others in the region.  Credit costs are another concern. With BOJ’s new announcement of continuing low rates there remains even less hope that loan volume will support profit and that NIM pressure will remain. A negative delta in credit costs is not easily absorbed by anaemic ROA. 

2. LG Electronics’ Decision to Halt Smartphone Production in Korea – No Mas!

Lg%20mobile

Chairmain Koo wants to make some big changes to improve profitability of LG Electronics – The company’s decision to stop production of smartphones in Pyeongtaek, Korea by end of this year and move this operation to Hai Phong, Vietnam has been received with mixed reactions by the shareholders so far and its share price is up 2% after this announcement.

  • Workers’ pay in Vietnam is nearly 1/8 of the levels in Korea.
  • LG is now likely to focus on the low-to-mid end of the global smartphone segment.
  • Moon Jae-In administration’s socialist policies are not business friendly.
  • We think that the annual potential savings of shifting the manufacturing to Vietnam could be about 50 billion won or 2% of the company’s annual operating profit. 

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: Japan Banks – Unloved for Many Reasons and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Japan Banks – Unloved for Many Reasons
  2. LG Electronics’ Decision to Halt Smartphone Production in Korea – No Mas!
  3. ZOZO: No More Thank Yous and Less Profit Too

1. Japan Banks – Unloved for Many Reasons

1

The Bank of Japan (BOJ) offers negative interest rates on monies deposited. Japan’s banks are largely wholesale, with lumpy corporate loans and in many cases, where they look after corporate interests more than shareholders. Some consider the largest banks in Japan like closed-end mutual funds – but with credit risk -due to their gigantic equity holdings. These all remain valid reasons to shun Japan’s banks in favor of others in the region.  Credit costs are another concern. With BOJ’s new announcement of continuing low rates there remains even less hope that loan volume will support profit and that NIM pressure will remain. A negative delta in credit costs is not easily absorbed by anaemic ROA. 

2. LG Electronics’ Decision to Halt Smartphone Production in Korea – No Mas!

Lg%20mobile

Chairmain Koo wants to make some big changes to improve profitability of LG Electronics – The company’s decision to stop production of smartphones in Pyeongtaek, Korea by end of this year and move this operation to Hai Phong, Vietnam has been received with mixed reactions by the shareholders so far and its share price is up 2% after this announcement.

  • Workers’ pay in Vietnam is nearly 1/8 of the levels in Korea.
  • LG is now likely to focus on the low-to-mid end of the global smartphone segment.
  • Moon Jae-In administration’s socialist policies are not business friendly.
  • We think that the annual potential savings of shifting the manufacturing to Vietnam could be about 50 billion won or 2% of the company’s annual operating profit. 

3. ZOZO: No More Thank Yous and Less Profit Too

Zozoresults

ZOZO’s (3092 JP) announced its FY18 results today, with operating profit down 21% despite sales increasing by 20.3%.

What was more surprising was a clear sign of retreat and even some humility as the online fashion mall announced it would end its disastrous Zozoarigato campaign.

Merchants are delighted but the damage has already been done and it will take time to repair merchant trust at a time when headwinds are building for Zozotown and the private brand is no longer expected to deliver growth as forecast.

The company is much less optimistic about growth for the current year; it forecasts a 24.7% increase in OP to ¥32 billion but much slower GMV growth of just 13.6% to ¥367 billion. The private brand will shrink by 38.5% to just ¥1.7 billion.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: Iron Ore and the Inventory Mystery and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Iron Ore and the Inventory Mystery

1. Iron Ore and the Inventory Mystery

Slide1

Just days after China makes a big push to keep supporting the economy, iron ore prices ticked upward. Even though GDP beat expectations, the fact that China is still pushing the support the domestic economy feels a little bit like the Wizard of Oz, as in don’t look behind the curtain. Today we are looking at iron ore from a few different angles in order to give a good look at what Beijing is looking to support and ultimately maintain.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: Iron Ore and the Inventory Mystery and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Iron Ore and the Inventory Mystery
  2. Lawson Offers Customer Returns Service to Online Vendors Cementing CVS Role in E-Commerce

1. Iron Ore and the Inventory Mystery

Slide1

Just days after China makes a big push to keep supporting the economy, iron ore prices ticked upward. Even though GDP beat expectations, the fact that China is still pushing the support the domestic economy feels a little bit like the Wizard of Oz, as in don’t look behind the curtain. Today we are looking at iron ore from a few different angles in order to give a good look at what Beijing is looking to support and ultimately maintain.

2. Lawson Offers Customer Returns Service to Online Vendors Cementing CVS Role in E-Commerce

Lawson is opening up its store and logistics network to provide a customer returns service to third-party vendors, affirming its role as a hub for e-commerce transactions. The move follows the expansion of Lawson’s online food service, Loppick.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: WHO Officially Decides Gaming Addiction Disorder as A “Disease” – Impact on the Nexon Sale? and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. WHO Officially Decides Gaming Addiction Disorder as A “Disease” – Impact on the Nexon Sale?
  2. May Departs Unlamented: The Trouble Starts Now, with Real Brexiteers Likely in Charge
  3. UK: Consumers Keep Outspending Peers
  4. China Housing: Highlights From the ‘Baywatch’ Report On The Greater Bay Area (GBA)
  5. All’s Well That Ends Riotously / Paid Hoods Discredit Prabowo / Risks Subside / 11% Official Margin

1. WHO Officially Decides Gaming Addiction Disorder as A “Disease” – Impact on the Nexon Sale?

The World Health Organization (WHO) finally made its long-awaited decision on officially classifying game addiction disorder as a disease on May 25th. In June 2018, the WHO already included gaming disorder on the “11th revision of its international classification of diseases.” The WHO has been reviewing this issue for nearly 11 months and it finally made its decision on classifying it as an official disease. 

Will this issue become a “deal breaker” for the Nexon sale? No, we do not believe that WHO finally deciding that gaming disorder is a disease will serve as a deal breaker. Nonetheless, we believe that it will have a negative impact on the game industry as a whole and will be an important factor that could bring down the potential purchase price. 

Three Key Issues of WHO’s decision to Classify Gaming Addiction as Disease to the Nexon Sale:

  • How much has the market already taken this into account? 
  • Gaming taxes? 
  • Greater negative perception of gaming

2. May Departs Unlamented: The Trouble Starts Now, with Real Brexiteers Likely in Charge

Theresa May’s prime ministership has come to an ignominious end, with her last throw of the dice — a revised version of her Withdrawal Agreement that she wanted to present to the Commons with many elements favoured by Labour — drawing a complete blank. Her revised draft had included the possibility of a Second Referendum (a no-no to Brexiteers) but mainly entailed elements of a permanent Customs Union. The hedged plan was quickly rejected by almost all those to whom it was aimed at appealing. Apart from ceremonial roles, May’s prime ministership is over: she will resign as Conservative Party leader on 7th June (a fortnight hence), following which the party will choose a new leader through a potentially lengthy process.   

Boris Johnson is the favourite to become the UK’s next Prime Minister, with other Brexiteers (Dominic Raab and Michael Gove) seen as his most credible rivals. With the time-table requiring the negotiations with the EU to be completed well before the next Leave date of 31st October 2019, the probability of a No-Deal Brexit is high. The main problem arising from that will be the need for a new border between Northern Ireland and the Republic — something that is very unpopular in Northern Ireland, and will likely trigger demands for a referendum on Irish Re-unification (given that Northern Ireland voted to Remain in the EU, by a 56-44 margin).  Scotland (another Remain region) too is likely to trigger moves to leave the UK if it is leaving the EU without a deal. 

This is extremely negative news for Sterling and UK equities. The only slight hope for Sterling (GBP) is that no front-runner has won the Tory party leadership in the past 30 years. The downside is that, even if Boris fails again, most of the other alternatives are Brexiteers too. Remainers in the Conservative Party are too singed by Theresa May’s experience over the past 3 years to want to take up the poisoned chalice she is bequeathing. But amid the extreme uncertainty — and high probability of a No-Deal Brexit, with all the chaos that will engender — the GBP is a clear Sell. 

3. UK: Consumers Keep Outspending Peers

2019 05 24%20ret2

  • UK retail sales remained elevated in Apr-19 after surging in recent months. Annual growth was several tenths above expectations again. Payback towards the brisk underlying trend is still likely, though, not least because real wages have stalled.
  • British consumers have matched their bullish expenditures abroad while visitors to the UK have maintained sterling spending levels, despite devaluation. Brexit uncertainty has not stopped UK households from outspending their global peers.

4. China Housing: Highlights From the ‘Baywatch’ Report On The Greater Bay Area (GBA)

Screen%20shot%202019 05 23%20at%2019.14.39

Following on from our original note on the Guangdong – Hong Kong – Macau Greater Bay Area (GBA) from the day of the blueprint announcement on February 18, we are presenting the highlights from our inaugural ‘Baywatch’ report focused on the housing markets on the mainland of the GBA. For the essentials on the GBA, see Bondcritic’s China’s Greater Bay Area: The Essential

5. All’s Well That Ends Riotously / Paid Hoods Discredit Prabowo / Risks Subside / 11% Official Margin

Trade%2019 05 24

Long-awaited demonstrations on behalf of Prabowo proved far smaller than the Gerindra chair needed — meanwhile, police exposed how some 2,000 paid thugs rioted on his behalf, which discredits his cause.   Tensions are likely to subside as the denouement of a court appeal unfolds through 28 June.  Despite some 8 deaths in the rioting, Widodo has maintained the all-important moral high ground.  Official election results show Widodo having won by an 11.0% margin.  A breakdown by province suggests that identity politics was indeed at the fore. 

Politics: As many as eight fatalities occurred in two nights of rioting on 21-23 May – but the bulk of those actively rioting were clearly professional thugs hired to attack police.  A different group consisted of peaceful and orderly demonstrators complaining of supposed election fraud – but these numbered no more than 10,000, which pales in comparison to the one million that Islamic groups mobilized in Jakarta last December.  Police claim that several pro‑Isis militants carried handguns.  Police used assertive public communications to expose the sordid characteristics of rioters, which has discredited Gerindra Chair Prabowo Subianto.  There were over 700 casualties and 257 arrests.  Events portray the Prabowo camp as having stooped to paying goons to run amok, tarnishing Indonesia’s democracy.  Consequently, motivating genuine supporters to publicly protest far‑fetched claims of fraud will be even more difficult for Prabowo.  But much still depends on explanations for the deaths of rioters: at least one reportedly died of a bullet wound, but police are adamant that none in their ranks used live rounds (Page 2).  Authorities arrested a pro‑Prabowo former Special Forces (Kopassus) commander, Maj Gen (ret) Soenarko, for having allegedly smuggled M4 carbines into Indonesia (p. 7).

Election Results: The General Election Commission (KPU) disclosed the official final vote count for both contests.  Widodo’s margin was 11.0 percent (p. 9).  Prabowo finally decided to lodge an electoral appeal with the Constitutional Court, which aims to issue a verdict on 28 June.  Justices are highly unlikely to overturn Widodo’s win (p. 14). 

Justice: The president formed a Selection Committee (Pansel) for nominees for the Anti-Corruption Commission (KPK).  The roster is strong overall and concern from critics may be overdone (p. 15).  State Sports Minister Imam Nahrowi faced court testimony from witnesses who say they made kickback payments to him totaling Rp11.5 billion (p. 15).

Produced since 2003, the Reformasi Weekly Review provides timely, relevant and independent analysis on Indonesian political and policy news.  The writer is Kevin O’Rourke, author of the book Reformasi.  For subscription info please contact: <[email protected]>.

Economics: The rupiah has been sliding amid international uncertainties and the  persis­tent current account deficit, but pressure from domestic political tensions may lift (p. 16). 

Outlook: Despite deaths of eight rioters, Prabowo suffered disgrace from demonstra­tions in Jakarta.  Peaceful ralliers were few in number, while police produced compelling evidence that the Prabowo camp hired hoodlums to wreak havoc.  When Prabowo finally called on protesters to retire and rest, he was – in effect – finally acknowledging his election defeat.  Any additional demonstrations seem unlikely to be significant and Prabowo’s court appeal may be an uneventful dénouement (p. 18).

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Multi-Strategy: Lawson Offers Customer Returns Service to Online Vendors Cementing CVS Role in E-Commerce and more

By | Daily Briefs, Multi Strategy

In this briefing:

  1. Lawson Offers Customer Returns Service to Online Vendors Cementing CVS Role in E-Commerce
  2. Aeon: Where’s the Digital Strategy?

1. Lawson Offers Customer Returns Service to Online Vendors Cementing CVS Role in E-Commerce

Lawson is opening up its store and logistics network to provide a customer returns service to third-party vendors, affirming its role as a hub for e-commerce transactions. The move follows the expansion of Lawson’s online food service, Loppick.

2. Aeon: Where’s the Digital Strategy?

Aeon

In 2017, Aeon (8267 JP) said it would spend ¥500 billion on logistics and digital infrastructure to grow online sales to ¥1 trillion by 2020.

Two years on and the only public developments are a series of investments in tech companies and reassurances that it has teams working on new systems.

The ¥1 trillion goal looks increasingly out of reach without a major new initiative very soon.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.