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Morgan Stanley to Establish Indonesian Brokerage
Francezka Nangoy | November 17, 2011

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Morgan Stanley, one of the largest US investment banks, says it plans to set up a brokerage business in Indonesia in the middle of next year to capitalize on its accelerating economy.

“We’ve been excited about Indonesia for the past few years,” James Gorman, Morgan Stanley’s CEO, said in a statement distributed in Jakarta on Thursday. “After careful review, we decided to enter the equity brokerage business here.”

Gorman said Indonesia was the focus of foreign investors and had become comparable to other big emerging nations such as Brazil, Russia, India and China.

Indonesia’s demographic profile, strong corporations and booming commodity sector are compelling enough to make Morgan Stanley want to establish itself further within the country, he added.

Andy Purwohardono, president director of Morgan Stanley Asia Indonesia, said the company was trying to become a member of the Indonesia Stock Exchange (IDX).

“We are currently negotiating with a bourse member for its seat,” Andy said. He declined to identify the member but said a deal was expected to be settled within the month.

He said setting up a business unit and acquiring a seat was much faster and simpler than acquiring a brokerage company.

Gorman said the brokerage unit would encourage foreign investment in Indonesia, especially in its key sectors.

“Indonesia has strength in the commodities sector and the consumer sector, it has an evolving domestic market and the banking sector is in a very good shape,” he said.

Morgan Stanley has done investment business in Indonesia since 2008.