Dubai road show runs well, says Minister of Finance Boediono
The Jakarta Post, Jakarta
The government claims that its road show in Dubai last week -- aimed at testing investor interest on a planned international bond issue next year -- has been a success, with the government presentation having drawn the interest of some 30 global investors.
Minister of Finance Boediono told reporters on Tuesday that the investors included fund managers, investment bankers and people from other financial institutions -- with "all showing high-level enthusiasm for the plan."
Boediono refused to name the investors.
Dubai is currently hosting the annual meeting of the World Bank and International Monetary Fund (IMF). While attending the forum, the government used it also to see what the international community had to say about the country's bond issue plan.
After Dubai, the government and central bank officials will continue the road show to other major financial centers in the world, including London, Singapore and New York.
The bond issue plan is stated in the 2004 state budget draft, which totals Rp 3.48 trillion (about US$400 million), as part of foreign financing sources to help plug the estimated Rp 24.9 trillion in budget deficit.
The government is in dire need of extra financing sources after it decided not to extend the current IMF economic bailout program, a move which deprives the country of access to foreign debt rescheduling facilities from the Paris Club of creditor nations.
This scheme will come along with other options, including optimizing potential revenues from both domestic and other foreign sources, mostly loans.
However, under the draft -- which has already been submitted to the House of Representatives -- domestic sources still make up the lion's share in the deficit financing, totaling Rp 39.8 trillion.
The plans will be the country's first international bonds issue since the financial crisis crippled the economy in 1997- 1998. Some $400 million worth of Yankee bonds were issued in 1996.
Elsewhere, Boediono also said there was at least four foreign securities companies that had shown an interest in becoming the advisors of the bond issue.