Goldman is eyeing other Indonesian brokerages after being elbowed out by rival Morgan Stanley in a race to buy a brokerage seat in Indonesia.
Nonetheless, Goldman Sachs is not expected to sign a deal anytime soon, said a source familiar with the matter, who was not authorised to speak publicly on the issue.
The fee pool in the domestic equities market is growing, explaining why Morgan Stanley pushed so hard to buy the brokerage seat from Jakarta securities firm PT Tiga Pilar Sekuritas, allowing the U.S. bank to cover the secondary side of sales and trading, as well as research in a country where the stock index is nearing its record levels of last August.
Morgan Stanley needs regulatory approval before it can buy and sell stocks directly with the Jakarta exchange.
The investment climate has been boosted by both Fitch and Moody's approving Indonesia's debt as investment grade, allowing its bonds to be added to benchmark global indexes.
Announcing plans in November to set up an onshore brokerage business, Morgan Stanley CEO James Gorman said Indonesia was a "strategic priority" and cited "favourable ...demographics, low debt levels, stable government and abundance of natural resources" as reasons to be optimistic about the country.
Ratings agencies have upgraded Indonesia's debt, the stock market is up by a fifth since October, the IPO pipeline is well stocked, and investment banking fees are growing far faster than elsewhere in Asia.
Southeast Asia's largest economy is a big draw for global investment banks chasing fee revenue on deals and fund raisings, but which are well aware of the dangers - from corruption and a lack of transparency to market volatility.
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