Vickers Ballas boosts stake in RI brokerage

Vickers Ballas boosts stake in RI brokerage

SINGAPORE (Bloomberg): Vickers Ballas Holdings Ltd, a
Singapore stock brokerage, is increasing its stake in Indonesia,
a market that much of the international brokerage industry has
turned its back on.

One of Singapore's largest locally owned brokerages, Vickers
Ballas is paying 6.6 billion rupiah (US$554,000) to boost its
stake in PT Vickers Ballas Tamara to 75 percent from 50 percent.

The transaction is also the latest link in a chain of
expansion moves by Vickers Ballas in Southeast Asia.

While Indonesia has not yet solved its economic problems --
Jakarta's benchmark index fell 8.9 percent Tuesday on concern
about possible foreign exchange controls -- Vickers Ballas
executives reckon the purchase makes sense beyond the daily
turmoil of Indonesia's financial markets.

"We want to be a significant player in the countries we are
active in, and this is part of that long-term strategy," said
Damien Lim, a senior vice president at Vickers Ballas Holdings.

The Singapore brokerage bought the additional 25 percent of
Vickers Ballas Tamara from PT Sukandamulia Prakasa, a privately
held Indonesian group.

PT Tamara Bank continues to own the remaining 25 percent of
the brokerage. Vickers Ballas said it would pay for the increased
stake from dividends from its existing shares in the brokerage.

Since the middle of 1997, East Asia's economic crisis has
caused the rupiah to plunge 73 percent against the U.S. dollar,
interest rates to soar, and the Indonesian economy to fall into
recession. The government expects the economy to contract by at
least 15 percent this year.

During the past year, foreign stock brokers have either cut
their staffs in Indonesia or left the country entirely as
investors have shied away from its volatile financial markets.

"Operationally, we are profitable in Indonesia," Lim said.
"We have gained business from brokerages that have left the
country."