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Jakarta Post

New Mandiri Sekuritas chief eyes regional presence

In the market: Bank Mandiri retail banking director Tardi (left to right), finance and treasury director Pahala N

Grace D. Amianti (The Jakarta Post)
Jakarta
Thu, August 25, 2016

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New Mandiri Sekuritas chief eyes regional presence

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In the market: Bank Mandiri retail banking director Tardi (left to right), finance and treasury director Pahala N. Mansury, president director Kartika Wirjoatmodjo and Bahana Securities investment banking director Novita Lubis chat on the sidelines of Mandiri’s press conference in Jakarta on Wednesday. Mandiri is looking to issue Rp 5 trillion (US$377.3 million)-worth of bonds to repay maturing debt and finance expansion. (JP/Donny Fernando)

securities house

Securities firm Mandiri Sekuritas, part of state-owned lending giant Bank Mandiri, expects to heighten its presence overseas and increase its domestic retail investor base through online approaches under the helm of its new leader.

The company’s shareholders recently appointed Silvano Rumantir — who has served executive posts at foreign banks Deutsche Bank, HSBC and ANZ — as president director, replacing Abiprayadi Riyanto, with fresh programs expected to maintain Mandiri Sekuritas’ position as among the country’s top securities houses.

Silvano said the company would first strengthen its internal infrastructure, such as IT and risk management, before expanding regionally and growing its business to become the “top of mind” in the market.

After developing a solid infrastructure, he said the company was hoping to enter regional competition by upgrading its branch license in one of Asia’s financial hubs, Singapore, into a subsidiary, so that it could be Indonesia’s first securities firm with a full capital market license in the neighboring country.

A strong presence in Singapore, where many global investors have regional offices, is believed to serve as an advantage for the company when its clients wish to seek funds from international investors during corporate action, such as initial public offerings (IPOs) and bonds issuance.

“We want to upgrade the license to widen our business scope, so that we can help Indonesian companies wishing to access regional markets and be prepared to compete with the international players,” the 38-year-old executive told The Jakarta Post in a recent interview.

Silvano said an upgrade would entitle the company’s Singapore branch with a capital market services (CMS) license from the Monetary Authority of Singapore (MAS), so that it could conduct activities in fixed income, equity and advisory areas.

With such a license, he said the company would be able to pitch deals to the Finance Ministry as a book-runner for government’s global bonds, in which Indonesian securities houses often only act as junior co-managers for their foreign counterparts.

As of July, Mandiri Sekuritas completed 27 capital market transactions, four of them which were equities and the remainder were bond issuances. For the rest of the year, the company had 25 underwriting mandates for bond and equities in its pipeline from various sectors, such as multifinance, construction and energy.

It booked Rp 9.6 trillion (US$724.5 million) in bond issuance underwriting as of July, a 52 percent increase from the same period last year, and equal to 20 percent market share. Its equity underwriting value reached Rp 3.8 trillion as of last month, more than double from Rp 1.1 trillion booked in the same period last year.

In the brokerage business, the company booked Rp 65.6 trillion in transaction value from institutional and retail investors as of July, or equal to an average of Rp 500 billion transactions per day.

“We are also involved in rights issue plans of state-owned companies, such as Krakatau Steel and Jasa Marga,” he said.

In retail business, Mandiri Sekuritas plans to increase its number of retail customers — 53,000 customers as of July — a number showing that it currently stands on top of the list of securities firms in Indonesia, where only 420,000, or 0.2 percent, of its population has access to the stock market.

As a securities firm owned by the country’s largest financial group by assets, Mandiri Sekuritas expects to tap into its parent company’s big customer base, which stands at 9 million retail customers, as well as the wider population with disposable income, yet to have entered the domestic capital market owing to various reasons.

To promote the capital market, the company is among securities firms involved in the Financial Services Authority’s (OJK) program centering on financial literacy and education for junior high and high school students, corporate secretary Budiyono said.

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