Citigroup has been allocated a seat on the Indonesian stock exchange (IDX), and expects to start trading directly in domestic equities in August. The exchange has given the go-ahead for Citicorp Securities Indonesia to act as an equities broker, so it will soon be able to offer local and international clients direct access to the Indonesian stock market.
The US bank has had to wait for about a year for approval, because the bourse has a restricted number of seats available. A domestic broker gave up its membership, which meant that Citi could move ahead with its plans.
"We are already a leading player in the Indonesia capital markets, but this new seat will give us the ability to offer our clients better access to the Indonesia stock market. It will also help raise the profile and accessibility of the Indonesian market to global investors," said Shariq Mukhtar, Citi's Indonesia country officer, in a statement yesterday.
The bank has an existing onshore equity research group, which it has been expanding since the beginning of this year in anticipation of its seat approval. But, it has had to transact trades for its clients via local brokers, which adds extra layers of cost and increases dealing time.
"The addition of the equity business completes the range of our global markets product platform for our clients," said Manish Bhai, markets head at Citi Indonesia. He plans to add up to five people to his equities team.
Citi's current market share of a quite fragmented equity market is around 1%. As a dealer and trader on the stock exchange, it hopes to raise that share to between 4% and 5% over the next two-to-three years, which would place the bank among the market leaders.
Also within its markets business, Citi has sales and trading operations in the country covering foreign exchange, fixed income, credit and commodities.
In Asia-Pacific, Citi has equity operations serving clients in Bangladesh, China, India, Sri Lanka, Korea, Taiwan, Japan, Hong Kong, Philippines, Thailand, Australia, Vietnam, Singapore and Malaysia.
"Establishing a seat in Indonesia is a natural extension of our footprint and underlines our focus on building out further in the Asean markets. It will also make it easier for our clients to invest in the Indonesian market," said Adrian Faure, Citi's Asia-Pacific head of equities.
And in Vietnam...
Separately, Citi announced yesterday that it has signed a memorandum of understanding with the Vietnam Development Bank (VDB), the government's development arm, to cement a long-term partnership in areas of funds raising, international banking and treasury services, cash management, and training.
This will provide VDB access to Citi's international funding and capital markets channels, its global platform of technology, and its spectrum of products and services. One of the projects that Citi and VDB are collaborating on is an agency-backed long-term finance facility to support the Hanoi-Hai Phong Expressway Project.
And finally, Citi said yesterday that it has appointed Javed Kureishi as head of the global subsidiaries group (GSG) for Asia-Pacific (ex-Japan). The 25-year Citi veteran will move from his current role as chief operating officer for the bank's businesses in the Middle East and start his new job on September 1.
Kureishi, who will also join the Asia-Pacific corporate banking committee, will be based in Singapore and report to Robert Snell, global head of GSG and to Farhan Faruqui, head of global banking, Asia Pacific.
GSG Asia-Pacific functions across 16 countries in the region, and supports more than 85% of the Fortune 500 companies which operate in Asia-Pacific, according to Citi. The bank said that it is one of its fastest growing business units.