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Govt feels deceived by JPMorgan
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Finance Minister Sri Mulyani Indrawati speaks to the media at the State Palace. (AP Photo/Tatan Syuflana)
A
research note published by the local unit of global financial services giant JPMorgan Chase that downgrades Indonesia's sovereign bonds, is deemed improper given the firm's position as a primary dealer.
"That's a conflict of interest. A primary dealer should've been to seek for the bonds' buyers instead of giving a sell recommendation," Scenaider Siahaan, director for the strategy and financing portfolio at the Finance Ministry's financing and risk management office, wrote in a text message on Wednesday.
"We suffer losses because secretively it (JPMorgan) buys the bonds at lower prices and sells them back."
He, however, said that the ministry could not project what the total losses were.
(Read also: JPMorgan undeterred by Finance Ministry's partnership termination)
The government terminated all of its deals with the JPMorgan Chase Bank, NA, a subsidiary of New York-based JPMorgan Chase, after it published a research note that downgraded the country two notches from the “overweight” to “underweight” position, following the victory of Republican Party candidate Donald Trump in the US presidential election.
JPMorgan stated on Tuesday that its business in Indonesia would continue to operate as usual despite the termination.
“The impact on our clients is minimal and we continue to work with the Finance Ministry to resolve the matter,” JPMorgan head of communications for Southeast Asia Li Anne Wong said.
Scenaider asserted that his office was ready to work again with JPMorgan if it "could change" its attitude. (bbn)
