PUMA launch home loan business in Indonesia

PUMA launch home loan business in Indonesia

SYDNEY (Reuters): PUMA Management Ltd, Australia's largest
provider of non-bank home loans, said yesterday it would expand
its operations in Asia and offer home loans in Indonesia.

Tony Gill, Managing Director of PUMA, the securitization arm
of Macquarie Bank, said he believed Indonesia's economic
fundamentals were good, and changes to the local financial
markets, through IMF reforms, would deliver considerable benefits
to local capital markets.

"Despite the last few months, we believe that Indonesia's
fundamental economics are good," said Gill, speaking at
Securitization Indonesia '97, an industry conference in Jakarta.

"Naturally, like most commentators, we anticipate considerable
benefits from the micro-economic reform that seems likely to
result from this year's shock to Indonesia's capital markets,"
Gill said.

PUMA, which has written more than 19,000 loans in Australia
this year alone, has formed a joint venture with commercial and
merchant bank PDFCI, to offer home loans to Indonesians.

The home loans would be securitized, substantially increasing
the depth and liquidity of Indonesia's capital markets.

"We believe that the dynamic growth in the region will, over
the medium term, be positively affected by the events of the last
few months, but we will continue to monitor the situation
closely," Gill said.

Gill said there were several factors in the decision to start
a home loan and mortgage securitization business in Indonesia
including the country's large population and growing middle
class.

Indonesia's BBB sovereign debt rating also makes
securitization viable, as does having key regulators such as Bank
Indonesia and Bapepam, and PUMA feels there would be an easy
adoption of its technology in the Indonesia market.

"Indonesia's home loan market is small at 16 trillion rupiah,
but it is growing and with lower interest rates, it will recover
within 12 to 18 months and will build into a sustainable,
substantial market," Gill said.

Some of Indonesia's financial institutions were short of
capital, which was a strategic benefit to mortgage securitizers,
while domestic and offshore swap markets were developing, making
bond structuring an achievable goal, Gill said.

"In Australia, we have been instrumental in the development of
secondary mortgage market technology and the delivery of lower
home loan rates to Australians," Gill said.

"We hope to emulate this success in Indonesia and, over time,
other selected Asian countries where both economic success and
social benefits will be substantial," he added.