JP Morgan mulls increasing investments in Indonesia: minister

16:22, April 14, 2010      

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U.S. investment bank JP Morgan considers raising its stakes in Indonesia by investing in mining company PT Newmont Nusa Tenggara (NTT) and several banks, a paper said here Wednesday.

Indonesian State-Owned-Enterprises Minister Mustafa Abubakar quoted by the Jakarta globe as saying that JP Morgan representatives has visited him this week to discuss possible investments.

But, the bank did not, however, reveal how much it was looking to spend, he said.

"JP Morgan wants to increase its investment in Indonesia. The bank has declared its interest in acquiring Newmont shares, as well as in acquiring shares in Indonesian banks through credit partnership," Abubakar said.

Foreign capital inflow has accelerated recently in Indonesia, along with the trend that the global investors tend to invest in emerging market, including Indonesia, which may give higher return, following the recover of economy in the countries.

The success of Indonesia's reform has led Fitch and Moody rating investors to raise the country's investment grade recently to one nocth under investment grade. U.S.-based Newmont Mining must complete a government-mandated divestment of some of its NNT shares this year. Last year, the miner sold a 24 percent stake to Bakrie Group-backed consortium PT Multi Daerah Bersaing.

Newmont has priced the final 7 percent stake at 444 million U.S. dollars, 80 percent more than an initial value of around 246 million U.S. dollars last year, as rising commodity prices have driven up NNT's assets.

Multi Daerah Dersaing has already announced plans to acquire the final piece of NNT on offer. Meanwhile, the nation's largest lender, PT Bank Mandiri, said it would welcome any move by JP Morgan to buy shares in Indonesian banks. "We're open to foreign capital influx through the rights issue, but the government will maintain its 60 percent stake," said Agus Martowardoyo, the bank's president director.



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