Published at 02:43 (GMT) 22 Jul
Indonesian lawmakers are considering a bill that will force foreign banks to sell down majority stakes in local lenders, which, if approved, would drive away the foreign capital needed to further develop the country's financial services sector. According to the bill foreign banks will have to sell down holdings in banks to a maximum of 40% within a decade. Foreign banks that own controlling stakes in lenders include Malaysia's Malayan Banking Bhd, CIMB Group Holdings Bhd, and HSBC Holdings PLC. The proposed bill also calls for investments by foreign banks to be evaluated according to "reciprocity" or whether Indonesian banks can have similar market access to these banks' home countries.It also calls for foreign banks to be locally incorporated, which will force them to ring-fence a pool of capital in Indonesia to protect customers from losses if the lender runs into trouble overseas (Rtrs).
On FX, in line with lower USD/Asians, USD/IDR retreated lower to below 11550 through to 11500, touching over 1- w lows; prices edged higher and were last seen trading near 11550 lvls. Focus on the official presidential election results to be announced today and the post election uncertainty as General Prabowo demanded the Election Commission to investigate into vote cheating before he accepted the election results; political uncertainty could drive the pair back up to +11600 lvls. JKSE touched 5,155.03, 2-w highs, before the index declined towards 5120.0 lvls. 10Y yields eased towards 8.00%, near 2-m lows. BB
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