The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
The tie-up is aimed at providing clients greater custody access to global markets. Under the new partnership, BII can enter into and settle its custodial transactions in European and US markets, via the bank's direct access to Euroclear and Clearstream global central securities depositories.
BII will also gain access to CitiÆs web-based platform for securities settlement that offers analytic tools, transaction banking and online services.
The growth in the Indonesian economy and the recent commodities boom have generated a substantial increase in foreign institutional investment in the country's capital markets. Local funds under management have increased from $2 billion in 2005 to about $10 billion, according to Citi.
Investors are becoming more sophisticated as the government allows the launch of new products including the first capital protected fund and the first exchange-traded fund (ETF) in the country. Citi has also recently won a private equity infrastructure mandate from PT Bahana TCW Investment Management, due to be launched in the next few months.
"Foreign investors own 40% of stocks whereas 20% of government bonds in the fixed-income markets are now held by foreign investors. The domestic players have also been extremely active," says Anand Pande, managing director and head of global transaction services for Citi in Indonesia.
"Citi's transaction volumes have doubled in the last 12 months. This is not just on the back of the current market boom but is also to do with increasing market share, as we offer clients a direct method to tap into the eurobond market, via access to Euroclear and Clearstream, without which they would have to go through third parties which could lead to inefficiencies in processing, funding and transaction delays," Pande adds.
BIIÆs custody business will also be able to benefit from shorter turnaround time for instructions, expanded cash and corporate action services, faster responses to queries and a more cost-effective transaction process, Citi says.
BII is one of the largest banks in Indonesia with an international network of over 230 branches and 700 ATMs across the country. It also has a banking presence in Mauritius, Mumbai and the Cayman Islands and provides a range of financial services through its branch and ATM network, phone banking and internet banking channels.
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