Exclusive: M.Stanley trumps Goldman in Indonesia brokerage deal

Wed Feb 1, 2012 8:15am EST
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By Janeman Latul, Andjarsari Paramaditha and Saeed Azhar

JAKARTA/SINGAPORE (Reuters) - Investment bank Morgan Stanley (MS.N: Quote) has stolen a march on archrival Goldman Sachs (GS.N: Quote) by landing a brokerage seat in Indonesia, Southeast Asia's biggest economy.

A broking license will allow Morgan Stanley to trade securities and provide research in Indonesia, which is expected to draw extra fund flows after an upgrade to investment grade by credit ratings agencies Moody's last month and Fitch in December.

A senior official at Indonesia's stock exchange said it had suspended trading by local securities firm PT Tiga Pilar Sekuritas on Wednesday pending approval of its plan to transfer its seat to Morgan Stanley.

Goldman appeared to show insufficient enthusiasm after completing due diligence last year, said a Jakarta-based source, one of several in Jakarta and Singapore who have direct knowledge of the matter and spoke to Reuters.

With no Goldman deal forthcoming, Tiga Pilar's owners initiated discussions with Morgan Stanley, said the sources, who declined to comment on the financial value of the deal.

Tiga Pilar, Morgan Stanley and Goldman declined to comment.

"We have suspended the trading activities of Tiga Pilar today as we will process their transfer to a third party, which is Morgan Stanley," Uriep Budi Prasetyo, director of compliance and supervision at the exchange, told Reuters.

Morgan's move to expand in Indonesia follows Nomura Holdings (8604.T: Quote) and Citigroup (C.N: Quote), which last year ramped up equity teams in Jakarta to challenge leaders Credit Suisse CSGN.VX and Deutsche Bank (DBKGn.DE: Quote).   Continued...

<p>The outside of the Morgan Stanley offices is seen in New York January 18, 2012. REUTERS/Shannon Stapleton</p>