The Jakarta Post
The Investment Coordinating Board (BKPM) has encouraged Chinese companies operating in Indonesia to conduct an initial public offering (IPO) and list their shares on the Indonesia Stock Exchange (IDX).
"I encourage Chinese companies that operate and invest in Indonesia to list their shares [on the IDX]," Investment Coordinating Board (BKPM) head Bahlil Lahadalia said on Wednesday to more than 100 companies attending the China Business Forum.
Bahlil said the row between China and Indonesia over the exclusive economic zone (EEZ) in the Natuna Islands had not affected economic cooperation between the two countries.
Over the past week, Jakarta and Beijing have been embroiled in a diplomatic tug-of-war over the latter’s claim to parts of Indonesia’s EEZ, after the Maritime Security Agency (Bakamla) reported multiple counts of Chinese coast guard and fishing vessels operating there illegally.
He said the listing of companies on the IDX could help improve economic relations between the two countries. Between the end of 2014 and the third quarter of 2019, China was the third largest foreign investor in Indonesia, after Japan and Singapore, the second and first largest foreign investors, respectively.
In the January to September period last year, Chinese direct investment in Indonesia totaled US$3.3 billion in 1,619 projects.
China Chamber of Commerce in Indonesia chairman Zhang Chao Yang agreed with Bahlil, noting that the IDX’s capitalization of $520 billion made it one of largest stock markets in the region.
"The capital market is undoubtedly an effective alternative for financing [for Chinese companies]," he said at the same forum. "Listing on the IDX not only brings about diversified funding, but also enhances cooperation [between the two] governments."
Chinese companies in Indonesia currently rely on loans from banks to fund projects, according to Zhang.
Chinese ambassador to Indonesia Xiao Qian also echoed Bahlil's statement. "No Chinese companies have entered the Indonesian stock market. It is a bit of a pity," he said. With the rapid growth in China’s foreign direct investment in Indonesia, there is potential in the future for Chinese companies to tap into the local capital market to raise funds, he added.
As diplomatic relations between Indonesia and China enter their 70th year, Xiao expressed hope that cooperation between the two countries in the capital market would "open up a new space for China–Indonesia business relations." (dfr)