The Indonesia Stock Exchange has proposed to set up an agreement on dual listings with the Hong Kong bourse in a bid to provide its startups and even state-owned enterprises a venue to tap Chinese capital.
(Bloomberg) — The Indonesia Stock Exchange has proposed to set up an agreement on dual listings with the Hong Kong bourse in a bid to provide its startups and even state-owned enterprises a venue to tap Chinese capital.
IDX has proposed to bring its domestic startups to also list on the bourse operated by Hong Kong Exchanges & Clearing Ltd., said IDX Business Development Director Jeffrey Hendrik in an interview Friday. Initial targets include technology startups, and possibly the country’s state-owned enterprises, he said.
President Joko Widodo’s national strategy includes helping domestic companies become more active globally, according to IDX President Commissioner John A. Prasetio. The national strategy is unlikely to change even after the upcoming presidential election next year, he said.
Indonesian companies should be encouraged to be international actors, said Prasetio. “If you can make it in Hong Kong, you can make it anywhere.”
Indonesia is third in initial public offering fund raising so far this year in Asia-Pacific, including the world’s third-largest debut of PT Pertamina Geothermal Energy on Friday. Last year saw blockbusters IPO such as e-commerce platforms GoTo and Blibli.
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“At HKEX, we maintain an active dialog with fellow exchange organizations around the world sharing best practice and insight for the benefit of our markets as a whole,” a spokesperson said in an emailed statement, confirming the bourse “recently” met with IDX as part of this outreach program. “We look forward to continuing to promote Hong Kong as both an international listing and investor market, as we build the Marketplace of the Future.”
Encouraging local firms to list elsewhere doesn’t mean a loss for the exchange since it expects the foreign-listed companies to grow and benefit the domestic economy with local hiring and spending, according to Hendrik.
“What is good for our economy is, of course, good for our exchange,” he said.
Apart from dual-listing proposal, IDX also proposed to list flagship index exchange-traded funds on HKEX to cover the Indonesian market, Hendrik said. A delegation from IDX visited HKEX Thursday with two startups — grab-and-go coffee shop Kopi Kenangan and online car seller Carsome, and the interaction was constructive, he said.
While IDX is “good friends” with the Singapore exchange, the capital market depth and liquidity in Hong Kong makes it more attractive for dual listings, Hendrik said.
(Updated with HKEX comments in sixth paragraph.)
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