Banks for all buyers: Indonesia opens up important stock sector

Article Abstract:

Indonesian government's proposal to allow foreigners to purchase up to 49% of the nine state-controlled banks' shares has resulted in a sudden advance of the Jakarta Stock Exchange turnover. The Jakarta Composite Index climbed 6.6 points to 301.65 and average daily profits reached a staggering $25 million. However, all nine listed banks under the banking law may not attract foreign buyers due to very low profits. Only Bank Bali with a turnover of Rupees 3,525 and Bank International Indonesia with profits worth Rupees 3,375 are likely to prove viable for foreign investment.

Statistics, Securities, Jakarta Stock Exchange Inc.

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Back to the real world

Article Abstract:

Banks in Indonesia have slowed down their frenetic pace after the 1989-90 period which saw an unbridled demand for their loan services as a result of an overaggressive economy. Recent developments reflect an industry that is more stabilised and is capable of maintaining a steady and manageable growth. A new legislation establishes the same set of rules for both state-owned and private banks. The law aims to enable state banks to be more efficient and to pursue more ambitious growth strategies unhampered by legal and bureaucratic impediments.

Commercial Banks, Industry Overview, Economic aspects, Indonesia, Banking law

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