My Jakarta: Barlef, Stockbroker

Last year’s economic crisis saw fear and panic spread all the way from Wall Street to the halls of the Indonesia Stock Exchange in Jakarta. 

Barlef, a stockbroker with Panin Sekuritas, witnessed the event firsthand. He walks us through a day in the life of a stockbroker, gives us some picks for 2010 and tells us why Indonesia’s economy is paving the way for Asia’s recovery.

Can you describe your day as a stockbroker?

The routine would probably bore most people. I wake up at 5 a.m. and I’m usually in the office by 6:45 a.m., even though things officially start at 8:30 a.m. I review the news, hold a briefing with my team and start calling clients before the market opens. At noon, I have an hourlong lunch break, and then return to my computer to do research, buying and selling until the end of trading hours. Then, after work, I get together with my associates to discuss the day until 6 p.m. I’ve been doing the same thing for years; maybe it’s going to change once I have a child [laughs].

What kind of clients do you have? 

Individuals and pension funds. I hold six pension funds from institutions, two non-institutions, and the rest is made up of individuals. I have around 90 accounts altogether. I have to call the active traders and big clients daily to report. Those who doesn’t trade much have to call me, unless a warning signal appears on their portfolio investments, then I will notify them.

Where does most of the investment money come from? 

You’d be surprised because individuals can be the biggest players, unless you hold pension funds from big players like Jamsostek, Jasa Marga or Telkom. Some individuals in Jakarta can “enter” [buy] at Rp 20 to 30 billion [$2.1 million to $3.2 million] a trade, while institutions may only invest Rp 500 million or Rp 1 billion.

What sort of profit can you make for your clients?

That’s up to them; it depends how much they want. If a client wants to sell at 5 percent, it’s their decision. Sometimes, when the market is not stable, after a gain of 1.5 percent in four days, they’ll sell. Pension funds usually target a 16 percent gain annually. If the market is bullish, 10 percent a week is possible, but you have to understand that this should be looked at as a long-term investment, because it’s volatile. I can guarantee that if you invest for more than two years, you will see an increase.

So what stocks do you recommend? 

In 2010, I would choose consumer goods, such as Indofood, and real estate stocks like Ciputra Group.

How bad was last year’s crisis? 

We felt the crisis, definitely. The Jakarta Composite Index dropped from 2,800 to 1,100. In percentage terms it fell almost as much as the Dow Jones. But today the Dow is still around 10,000, and we’re already at 2,600. I think we recovered quickly because our economy doesn’t export much compared to others. Countries that export heavily, such as Japan, got hit the hardest.

Let’s go back to the crisis in 1997-98. How does that compare to 2009? 

That time the crisis only hit Asia, last year it was the world. Back then we got backing from the Europeans and Americans. I watched last year’s crisis from a front-row seat. It was scary. I saw Bumi fall from Rp 8,000 to Rp 400; many investors lost a lot of money. But overall, last year many other countries got it worse. Back in ’98, we got hit hard.

Is this the best time to buy? 

Yes, of course, but many people are still scared to invest. I have a client who bought Bumi at Rp 800, now it’s Rp 2,700 per share. It’s like discovering treasure [laughs]. But you have to be patient, that’s the key. Buy when the market is down and don’t sell immediately when it rallies, sell after a few days.

How much commission do you make on each trade? 

That depends on the client. A big client may use a couple of different brokers, so, obviously, they would compare and negotiate. The Jakarta Stock Exchange sets maximum and minimum commissions. The standard is 0.6 percent or 0.7 percent, buying or selling. But for a big investor it will be around 0.2 percent to 0.5 percent. If you are playing with Rp 100 million, you can really see the difference, that’s why it’s negotiable. But if you only trade Rp 10 million, 0.7 percent doesn’t matter.

Are there any scams that we should be aware of?

Beware of stock tidur . This is an inactive stock, and there are lots of them in Indonesia. There’s one, which I can’t name, but it’s listed and it’s fake. My friend investigated a company like that. He went to the office outside Jakarta and only found a typewriter and two employees. Basically these stocks only move up for three days, then go down again and stay at that price for six months or a year. If you are a day trader, buying or selling any stock that moves that day, you might get caught buying this stock high and stuck with it as it goes down. The bandar [person on the other side] will patiently wait until you sell, so he can collect his stock again and make a profit.

Is being a stockbroker a good job? 

It’s hard to say. Last year even the top brokers had a painful year because there were no transactions. I’m “in-house” so I still earn a salary, but there were some commission-based guys who were only getting paid $30 a month. But then, after the recovery, they could go out and buy a new car [laughs].

Barlef was talking to Iwan Putuhena

Original interview was published in The Jakarta Globe

My Jakarta: Barlef, Stockbroker

Picture by Iwan Putuhena

for more information visit www.paninsekuritas.co.id

My Jakarta: Dog Breeder Musashi

If you’re a dog lover, it’s likely that a golden retriever is at the top of your list of pooches to own. It seems unfair to other breeds, but how can you beat the beauty and smarts of a golden? Musashi is not only the proud owner of a champion golden, he also manages Freezco kennel in Jakarta. He talks about dog breeding and breaks down what it takes for man’s best friend to be called a champion.

How’s the pet business doing?

I don’t consider what I’m doing a business. I look at it more as a hobby. If it’s a business, it would all be just producing dogs and selling them, and I wouldn’t care about who was buying the dogs. But that’s not what happens here. I keep the ones I really like. I feed them premium food, maintain and groom them, and hire assistants to take care of them. It’s not cheap. It’s an investment.

So how long have you been doing this? 

Since 2007. I started breeding Rottweilers, but now I’m focused on golden retrievers.

Have you always been a dog lover? What was your first dog? 

I’ve always loved dogs. I think I was in high school when I saw the movie “Air Bud” and I fell in love with goldens. Since then, I’ve always wanted a golden retriever, and that was my first anjing ras [purebred dog].

For how much do you sell the puppies? 

For between Rp 4 million and Rp 5 million ($430 to $540). At pet shops around Jakarta, they sell for around Rp 7 million.

Do you also sell puppies to pet stores? 

No, I don’t. I have nothing against them, it’s just that I like to know who’s buying my puppies so I can see them grow or I can visit them. Who knows, maybe the same dog that I sell could be a potential mate with one of my dogs in the future. When someone is interested in buying one of my puppies but he is from outside Jakarta, I think twice before selling to them. The bottom line is I still want to see my dogs even after I sell them, to be sure they’re being cared for.

Is it hard to breed dogs? 

Yes, it is. Especially when I was just starting out, it was hard to get it right. Before, I thought if you owned a dog, it would be easy to breed, but I was wrong. I failed many times trying to breed Rottweilers. In the beginning, most of the puppies died. But I finally got it right in 2008, when I started to breed the dogs within my own kennel instead of having to mate them with dogs from other places.

So why did you stop breeding Rottweilers? 

Believe it or not, I’m not allowed to own a black dog. The puppies always die. The dogs fall sick when they’re with me, but after I give them away, they become champions again. Then someone told me that my family was not allowed to own a black dog, or at least that’s the myth. I really don’t have a logical explanation.

Can you trace the blood line of your dogs?

My dogs have American blood, but some people say they’re European. European breeds have lighter hair, while American golden retrievers have brown hair. But there’s a bit of confusion because the American breed has been mixed with other breeds many times over the generations, that’s why it looks different. My dogs’ breed is rare. You can track the history of my dogs to the early 1900s. They have the blood of a champion.

When do they call dogs champions? 

They’re called that when they win a tournament. Around the world, including in Indonesia, dog clubs have these events and that’s when dogs compete. There are many types of certifications — both minor and major — based on breed, age range and gender. There are also different titles like “best in show,” “best of breed” and many others. But to be able to be called a champion, a dog has to achieve two minor titles and one major title certified by Perkin [the All Indonesian Kennel Club].

I saw this puppy at a pet store, and the guy there told me it was a champion. How do I know if he’s telling the truth? 

That’s not possible. They have to be over a year old to be able to compete and be named a champion. What he probably meant was one of the dog’s parents was a champion.

How come there are so many champion dogs in Jakarta? 

Because there are so many events, especially in the city. What people don’t know, however, is that it’s actually difficult to win titles in Indonesia compared to other countries.

How do they judge the dogs? 

They look at their teeth, their body, posture, temperament and the way they walk.

How many times have your dogs won a certificate or a title? 

One of my champion dogs, Amous, has nine titles.

What are your plans for the future? 

My goal really is to maintain a strong bloodline for generations. So when people see a purebred, they will say that it came from my kennel.

Musashi was talking to Iwan Putuhena

Original Interview was published in The Jakarta Globe

My Jakarta: Dog Breeder Musashi

Picture by Iwan Putuhena

My Jakarta: Willy, Bag and Shoe Repairman

aba-Laba is one of the few remaining mom-and-pop stores in Jakarta that repairs bags and shoes. The business is family-owned and has been passed from one generation to the next since it opened in 1898.

Willy is next in line to run the business, and judging by how fast he’s learned the tricks of the trade, his family can rest assured that it will be in good hands.

How is the shoe and bag repair business these days? 

In general, it has been slowing down. If the customers have really expensive stuff, they bring it in and have it fixed. Otherwise, because everything is so cheap nowadays, they just go out and buy something new instead.

So does it feel like there’s a recession? 

I don’t know. People who pay a lot of money to buy new shoes or new bags are willing to pay to have the same stuff repaired. But, like I said, in some cases, they just go back to the mall and buy new items.

Can you tell us how your shop started out? 

It’s been with the family for generations. My great-great-grandfather started in the business in 1898 after he got the store from the Dutch.

How many Laba-Laba branches are there? 

We have five and all of them are owned by the family.

And are you next in line to open store No. 6? 

If I could, I would open a restaurant instead [laughs], but I’m not sure what kind of food I would serve. I never really took the time to think about it.

How many people work here? 

There are about 20 people here right now. Some guys are at the back of the store doing repairs, while my dad, the girls and I are here at the counter.

How long have you been working here in your store? 

I graduated from college in 2005, and I’ve been here ever since.

Do you know how much you’re going to charge a customer just by looking at the damaged item? 

I base my estimates on how difficult repairing an item would be and what kinds of materials we would have to use to fix it.

Yes, but you did that like 12 times in the last three minutes. How do you do it? 

My dad taught me how to do everything and he’s always here in case I have a question. He makes sure I don’t make any mistakes.

You also repair some high-end bags. Don’t you think those should be taken to service centers? Why do you think Jakartans come to you instead?

If you have the warranty, you can take merchandise to a boutique or a shop and get it repaired there. But sometimes, those boutiques have to send your Louis Vuitton bag or shoes to Hong Kong or Singapore, and the whole process can take weeks. If you bring your stuff here, we fix it perfectly in just a few days.

So do you think you can spot a fake? 

It’s difficult unless you take out the inside layers, which could mean damaging the item.

Have you heard of ‘super copies’? What are those? 

That’s high-end merchandise that’s 99 percent just like the real thing. A super copy uses the exact same materials and no synthetics. You even get a serial number together with the box that comes with it. They’re just as detailed as the fake watches you can buy nowadays.

What’s the weirdest thing that anyone has ever brought to your shop to be repaired? 

The ones that I can remember are a prosthetic leg and a parachute.

Prosthetic leg? 

Yeah. This guy just walked in the store and took off his fake leg. He was like, ‘Here, fix the straps on this for me. They’re falling off.’

Did the person have to wait long for his leg? 

We got it done for him in half a day. He just waited, because he couldn’t go anywhere. Let’s just say we can call it an express order [laughs].

Has anyone famous ever brought you some shoes or a bag to be repaired? 

Yes, but I can’t tell you who they are. Let’s just say they were stars.

Does it give you a certain feeling of satisfaction knowing that you can fix almost anything? 

Yes, but I do it so many times, day in and day out, that I’ve just become numb about it.

What’s the difference between Laba-Laba and those repair shops in the mall? 

We’re experienced, and we have history. The guys at the malls have no experience. The guys working with us all have at least five years of experience doing repairs. My father always talks about quality, which has been a trademark of his work. He believes everything needs to be done properly.

Willy was talking to Iwan Putuhena

Original interview was published in The Jakarta Globe

My Jakarta: Willy, Bag and Shoe Repairman

Picture by Iwan Putuhena

My Jakarta: Harris, Gold Dealer

Anyone who thinks the gold business is an easy route to riches needs to sit down with Harris, who will happily explain why the path to easy street is not necessarily paved with gold.

The longtime owner of Toko Mas Orient talks about the details involved in being a gold salesman, offers some pointers on negotiating a reasonable price and explains why he calls his line of work ‘an intellectual business.’The price of gold has skyrocketed recently.

What’s the price for a gram nowadays? 

Right now, it’s about Rp 360,000 ($39) a gram.

How heavy is that bar you’re holding? 

It’s 100 grams. Gold bars are commonly bought and sold at this weight.

Is getting in the gold business something you’d recommend to people right now? 

No, because it’s expensive to buy gold and the profit is low. Most people come to my shop to sell. Given the economic situation in Indonesia right now, everyone seems to be selling gold.

Who brings their gold to you? 

Anyone. We rely on repeat customers. Actually, we deal more with families. We’ve bought and sold gold and jewelry with some families for generations. We even accept house calls.

You mean like a gold delivery service? 

Yes. I have one scheduled with one of my oldest customers. I just bring my scale and what I think she is looking to buy. But usually she purchases custom-made items. Then I just jump in my car and head off to her house.

When you have a lot of gold in stock, what do you do with it? 

We sell it to the big companies. Normally, as the price goes up, we hold on to it. When it starts to go down, we are more likely to sell. However, selling gold to big companies is a gamble. Yesterday, gold cost Rp 375,000, but today it’s at Rp 360,000.

When do you think was the golden era of the gold business? 

I would say in the ’80s. At that time, the Indonesian economy was booming and the dollar was less than Rp 2,000. During the Suharto era, business was good for everyone. Then the 1997-98 Asian financial crisis hit. The riots closed all businesses for at least six months. Luckily, I didn’t lose anything, but a lot of my friends lost everything. Since then, business has never really gone back to the way it used to be.

Were you scared becauseyou are ethnic Chinese? 

Yes. I was just confused throughout the whole period. I took some time off before I started again. I had a place in Pasar Cikini for 37 years, then I had to move to the Menteng Prada building.

During the riots, what did you do with all your gold and jewelry? 

I locked them up in a big vault, and then just waited until everything was somewhat back to normal.

Are you worried that we could seen another outbreak of violence like that? 

Of course. We pray that it will never happen again, but deep down inside, we worry about it.

Where does the gold that you sell come from?

A lot of places, like Nusa Tenggara and Bogor. All the gold that we sell has a certificate and a serial number.

Is this a family business? 

Yes. My son and I, we have two stores. Other members of my family are involved in construction, but I’m happy here in the jewelry business. I don’t want to get my hands dirty, and I like that I’m in a more intellectual business.

Could you teach us a little something about bargaining?

I have to be clear and open to my customers. It’s about trust. Plus, everybody knows the price of gold. I’m an open book.

But there’s always an element of bargaining. 

Basically, we are in a traditional market. People who come to Cikini are looking for the best price. At the malls, a piece of jewelry has a price tag, which means you can’t negotiate. Even if the item comes at a discount, the store owner still takes in a lot of profit and you can’t sell it back. Things are different here.

How are you able to give such good deals?

Each piece comes with a tag with an equation on it. For instance, this wedding ring set has two diamonds at 0.08 karats for Rp 600,000. The bands are white gold, so they’re nine grams together at Rp 270,000. Then there’s the labor cost, which is anywhere from Rp 750,000 to Rp 1 million. That’s where we can negotiate. We break it down for you, so you can see how we come up with the price.

And all of that is written on those tiny tags? 

The weight and size are on the tags. The price of diamonds and gold always changes, so we adjust to that rate. And you know the price. It’s out in the open.

Harris was talking to Iwan Putuhena

Original interview was published in The Jakarta Globe

My Jakarta: Harris, Gold Dealer

Picture By Iwan Putuhena