Investors express 'bullish' tone on Indonesia: IBRA<\/p>\n
JAKARTA (JP): Some 18 strategic and portfolio investors plan
\nto bid for 12 companies now in the hands of the Indonesian Bank
\nRestructuring Agency (IBRA) despite the uncertainty caused by the
\nupcoming June general election, according to agency chairman
\nGlenn S. Yusuf.<\/p>\n
Speaking from New York on Tuesday, Glenn said IBRA expected to
\nraise between Rp 4 trillion and Rp 5 trillion (around US$625
\nmillion) in four to six months time from the sale of the fixed
\nassets pledged by bankers to repay their debts to the government.<\/p>\n
He said the assets came from six sectors, including banking,
\nautomotive, chemical and property.<\/p>\n
He said some of the investors were planning to come to Jakarta
\nin the next few weeks for further discussions.<\/p>\n
\"They're very bullish on Indonesia. They say the economy has
\nreached the bottom and is now turning around,\" he said.<\/p>\n
Glenn said one investor had specifically showed interest in
\none local company and had thoroughly checked the company's
\nnumbers.<\/p>\n
Glenn said investors were encouraged by the positive
\ndevelopments in the country's macroeconomic indicators.<\/p>\n
\"What surprised me was that interest in the property sector
\nwas strong,\" he said, pointing out that many though this sector
\nwould be the last to recover.<\/p>\n
He said investors are not jittery over the upcoming June
\ngeneral election.<\/p>\n
\"They know the Indonesian Military is well-organized and can
\nhandle the situation. They also see that the economic platforms
\nof the major political parties are probusiness,\" Glenn said.<\/p>\n
Indonesia is to hold a landmark general election on June 7. It
\nwill be the country's first free and fair elections after more
\nthan 32 years under the authoritarian rule of former president
\nSoeharto.<\/p>\n
IBRA officials are in New York as part of the agency's road
\nshow. They have visited Singapore, Hong Kong and London, and will
\ntravel to Boston and Tokyo after leaving New York.<\/p>\n
The primary goal of the trip is to explore foreign interest in
\nthe various assets controlled by IBRA and to explain to investors
\nthe country's key economic reform programs, Glenn said.<\/p>\n
IBRA has taken over some $10.4 billion in corporate assets in
\n215 companies from the owners of the nine banks the government
\nclosed and the two banks it took over last year.<\/p>\n
The bankers surrendered the assets to repay over Rp 145
\ntrillion in liquidity support injected by Bank Indonesia last
\nyear to bail out the ailing banks.<\/p>\n
The agency also has taken over at least Rp 220 trillion in
\nnonperforming loans from the 11 private banks and seven state
\nbanks to be recapitalized by the government this year and the 38
\nbanks closed by the government in March.<\/p>\n
IBRA is expected to raise Rp 17 trillion from the sale of the
\nassets in the current 1999\/2000 fiscal year ending in March. The
\nmoney will help finance the bank recapitalization program.<\/p>\n
Glenn said interest in buying the nine private banks to be
\nrecapitalized by the government was particularly strong due to
\nthe recent landmark deal reached by United Kingdom-based Standard
\nChartered Bank and PT Bank Bali.<\/p>\n
\"You know how bankers are; if one makes a move others will
\nfollow suit,\" he said.<\/p>\n
The government plans to issue bonds to finance the
\nrecapitalization program, which will cost up to Rp 500 trillion
\naccording to estimates.<\/p>\n
Glenn said investors also were showing interest in buying the
\nbonds.<\/p>\n
\"Investors like the idea that the bonds will be tradable
\nbecause they would provide a yield curve which would become a
\nbenchmark (for fixed investment in the country),\" he said.<\/p>\n
Fund managers in New York gave a positive response on Monday
\nto IBRA's road show, Dow Jones reported.<\/p>\n
Organizers said they were encouraged by the attendance of some
\n60 investors following a turnout of around 40 investors at a
\npresentation last week in London.<\/p>\n
IBRA secretary Christovita Wiloto said the agency expected a
\nbigger reception in Asia and that the New York and European
\npresentations were aimed at a smaller group of fund managers who
\ndid not have Asian branches. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/investors-express-bullish-tone-on-indonesia-ibra-1447893297",
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