Investment banks' Indonesia hope/peril
The departure of Sri Mulyani Indrawati as Indonesia's finance minister nearly two years ago seemed to sum up much that is both right and wrong in one of Asia's fastest growing economies.
Her reformist modernising zeal was lauded by international banks and investors, and she won plaudits at home for overhauling corrupt tax and customs departments. But she made too enemies along the way, particularly among the powerful tycoons and politicians who run the world's fourth-most populous nation.
The reformer may well be gone, but the business opportunities remain ripe for plucking.
Ratings agencies have upgraded Indonesia's debt, the stock market is up by a fifth since October, the IPO pipeline is well stocked, and investment banking fees are growing far faster than elsewhere in Asia.
Little wonder that Morgan Stanley is beating a path to the country, elbowing out rival Goldman Sachs in a race to buy a brokerage seat in one of the world's hottest emerging markets.
Southeast Asia's largest economy is a big draw for global investment banks chasing fee revenue on deals and fund raisings, but which are well aware of the dangers - from corruption and a lack of transparency to market volatility.
I've read the Indonesian takeover rules and they're brilliant. They're better than nearly every other country in Asia, better than a lot of countries in Europe, and definitely better than the U.S. in terms of minority protection, said the manager of a large, Asia-based hedge fund, who did not want to be named because he trades in Indonesia.
But
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