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Jakarta jilts JP
Shooting the messenger a common tactic here seems to be going viral as Indonesia miffed by underwriter J P Morgans analysis of their prospects.
In what may be one of the most dramatic retaliations to a downgrade report, Indonesia’s government said it has terminated all business partnerships with JPMorgan Chase after the U.S. bank downgraded its outlook on stocks in Southeast Asia’s largest economy. The finance ministry announced it would stop using JPMorgan as a primary dealer and as an underwriter of its sovereign bonds, Robert Pakpahan, the ministry’s director-general for budget financing and risk management told reporters in Jakarta on Tuesday. The reason: Pakpahan said a November research report issued by the bank was not "accurate or credible."
JPMorgan downgraded Indonesia’s equity market by two notches to underweight from overweight in a Nov. 13 report as a “tactical response” to the Trump election win. The bank also downgraded Brazil, while noting that both countries may provide a "better buying opportunity” later, Bloomberg reported.
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Are you going to provide a Link?
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The major investment banks do not only compete- they also collaborate. JP Morgan speaks to Goldman Sachs speaks to Merrill speaks to Deutsche Bank, etc. Take it from me- I was there. Typically, a major Sovereign debt underwriting will include several, if not most of these players.
So all Indonesia will achieve through this short sighted, typically Asian, affront at a perceived loss of face is to increase the cost of it's debt and underwriting.
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Me too agree entirely they're shooting themselves in the foot, for all the talk of Islamic banking they still need foreign loans and the sensitivity to forex reflects how critical imports are.A failed move from a failed state.
Such action is sure to be counter productive and wasting reserves trying rate manipulation may be practical for US but not Rupiah.
Such announcements will deter the very investment needed
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Thank God the oil price is down.
Or else they would have leveled the rain forest already and said it was
"The will of the most gracious and merciful A....merica". :rolleyes:
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The tragedy for many tropical lands with hand to mouth peasants multi nationals and corrupt regimes can end trad small scale sustainable agro for quick fix logging instant return or plants like palm oil or eucalyptus which are unsustainable , unregulated mining which has scant respect for wildlife inddigenous cultures and traditions plus pollution.
Despite being near the exit I am an optimist and social media will empower resistance and better information and cheaper transaction costs will make trade and price discovery better.
However, I'm not sure if the democratic model will survive and all of Asia Pacific will become a Chinese Economic sphere just like prior hegemonists US UK and The Dutch in Indo
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Agreed. China'll run the show across to India's borders, in the south east.
