I

t is that time of year again when banks and retailers in the world'€™s most Muslim-populated country start gearing up for the fasting month of Ramadhan and the subsequent Idul Fitri festivity, which provide great business opportunities.

Diannisa Natanegara is planning to continue a family tradition for Ramadhan this year. The 28-year-old said that her family always handed out sarongs to people at mosques and orphanages during the fasting month, a tradition initiated by her grandmother.

'€œWe usually buy around fivescore sarongs every year. We buy cakes, cookies and other basic foodstuffs to be distributed to those in need,'€ she said, adding that she used her credit card to make all such purchases.

Diannisa is one of millions of Indonesians whose holiday preparations spell positive business for banks and retailers.

Private lender Bank Central Asia (BCA), one of the country'€™s major banks, began to see an uptick in its credit card usage as early as April.

BCA senior credit card general manager Santoso said that credit card transactions were up by an average of 10 to 15 percent in April compared to the previous month.

'€œThe same thing happened in May. Many of the credit cards were used to book airplane or train tickets and hotels. Our records show that some of them were also used for wholesale shopping at supermarkets,'€ he said.

As the fasting month, which will begin between June 27 and 28, approaches, BCA estimates that more transactions will occur, including those related to home furniture or equipment.

'€œWe predict that there will be higher sales of refrigerators, sofas and the like as part of home makeovers that typically happen before the holidays,'€ Santoso added.

BCA managing director Henry Koenaifi said that aside from the credit card segment, the Idul Fitri holiday normally triggered more transactions in the bank'€™s automotive loan segment, with an average increase of between 15 and 20 percent from the preceding month.

Similar to BCA, state-owned Bank Negara Indonesia (BNI) has also seen increases in its credit card and automotive lending segments, driven by the holiday preparations.

According to BNI consumer product and retail division head Dodit Wiweko Probojakti, the bank generally posts a 20 percent rise in those segments compared to the previous month.

'€œIn the credit card segment, the average transaction volume stands at Rp 1.8 trillion [US$152.79 million] per month, while in the
automotive segment, the figure reaches between Rp 400 billion and Rp 500 billion per month,'€ he said, adding that the bank expected its LotteMart and Garuda Indonesia co-branded cards would spur even higher purchases.

Meanwhile, analysts at Mandiri Sekuritas and Bahana Securities said that the fasting month and Idul Fitri period would be crucial for retailers and consumer goods manufacturers, especially those dealing in low-end purchases.

Mandiri Sekuritas equity research head John Daniel Rachmat said that retailers such as the publicly listed Ramayana Lestari Sentosa (RALS) could even book a 30 percent growth on a quarterly basis, supported by the festivities.

'€œIdul Fitri has always driven Ramayana to perform brightly. I think Ramayana [...] achieves the most extreme improvement during the period,'€ he said.

On a yearly basis, he predicted that the retail segment'€™s growth would be close to 10 percent.

Harry Su, the head of equities and research at Bahana, said that most retailers were looking forward to the period as it usually accounted for 30 to 35 percent of their total sales throughout the year. '€œThe positive performance may then boost their share prices,'€ he said.

'€”JP/Tassia Sipahutar