LURING RICH INDONESIANS WITH ETFS, DOLLAR PRODUCTS
Bank Mandiri targeting investors seeking to shield fortunes from currency rout
PT Bank Mandiri plans to chase wealthy Indonesians with more dollardenominated products and exchange-traded funds (ETFs) as investors seek to shield their fortunes from a currency rout.
The largest Indonesian bank by assets was seeking central bank approval to offer some products through its Singapore branch and was working with Lombard Odier to extend offshore ETFs to local investors, said Mandiri president director Kartika Wirjoatmodjo. Investors are scouting for safehaven assets after a global emerging-market sell-off triggered a rout in Indonesia’s currency, stocks and bonds. Mandiri is seeking to manage a share of the wealth held by Indonesians overseas and locally because such services offer high fee income compared with conventional banking, where competition is intensifying.
“With the US dollar movement, people want to bal- ance between rupiah and dollar assets, and the dollar asset choice in Indonesia is very limited,” said Kartika. “People are looking for dollar assets with certain features like higher yields, higher risks or stable growth. We have a very limited product range.” Foreign investors had pulled a net US$2.8 billion (RM11.42 billion) from Indonesian bonds and stocks this year as the rupiah weakened six per cent against the US dollar, among the worst performers in Asia, according to data compiled by Bloomberg.
Mandiri turned to Lombard Odier in April to develop products for wealthy clients in Indonesia and Singapore. The banks also planned to jointly offer investment advisory and secondgeneration succession planning services starting with Indonesia, according to Mandiri.
Wealthy Indonesians hold about 37 per cent of their assets outside their country, with Singapore accounting for 43 per cent of the wealth and Hong Kong 22 per cent, according to Capgemini SA’s Asia-Pacific wealth report.