Paul Chan says Hong Kong is ‘advantageous’ for IPOs in overture to Indonesian companies

Hong Kong can play a strategic role in supporting Indonesia’s economic growth and encourages the country’s businesses to look to Hong Kong to raise capital and set up treasury centres, Financial Secretary Paul Chan Mo-po said. Companies in Southeast Asia’s most populous nation should find Hong Kong’s capital market an “attractive and advantageous” place for raising funds, due to its unique geographic position near mainland China and the depth of the city’s stock market, Chan said during the “Think Business: Think Hong Kong” symposium in Jakarta, organised by the Hong Kong Trade and Development Council (HKTDC). “Indonesian companies listed on the Hong Kong exchange will be able to tap into both international and mainland capital,” Chan said, adding that the fundraising potential would suit infrastructure projects under the 2045 vision of the nation’s president to double per capita GDP. “We encourage your infrastructure projects to seek funding in Hong Kong.” Amid rising geopolitical tensions in the region, many enterprises simply diversified industry and supply chains across different countries, particularly in the Global South, said Chan. As this trend continues, Hong Kong can offer effective management and corporate treasury services, logistics professional consultants, as well as extensive international connections, he added. The full-day symposium was organised to highlight Hong Kong’s status as a global hub for business, innovation, logistics and offshore renminbi. Hong Kong is currently the second largest foreign investor in Indonesia, up from fourth in 2018, according to HKTDC. While Indonesia was Hong Kong’s sixth largest trading partner among members of the Association of Southeast Asian Nations (Asean). Business heads travelling with Chan include Asia Financial Holdings chairman and CEO Bernard Chan and Swire Pacific chairman Guy Bradley, as well as more than 40 members from the city’s tech sector, including representatives from 21 start-ups. Hong Kong’s world-class universities, stock exchange and business infrastructure make it a prime destination for global businesses to set up regional or global headquarters, Swire’s Bradley said during a panel discussion. “Everybody stands to benefit when we strengthen economic ties between Hong Kong and Indonesia,” Bradley said. “The positive effects are simple. Hong Kong businesses can also find growth by investing in Indonesia,” Bradley said. Swire Properties unveiled a 10-year, HK$100 billion investment plan for Hong Kong, the Greater Bay Area (GBA) and Southeast Asia in 2022, underscoring its commitment to the region. The company also set up its first strategic partnership with the Indonesian Investment Authority for healthcare in 2023. Hong Kong can support the many companies and family businesses in Indonesia that will need access to new technology and financing to grow and go global, according to Shinta Widjaja Kamdani, the CEO of Sintesa Group and chairwoman of the Indonesian Employer’s Association. “Indonesia is huge, with a new upper class,” Widjaja said on a panel. “Identify these companies and the sectors and go beyond looking at Jakarta.” Hong Kong is also stepping up its efforts to enhance its capital markets and facilitate new innovations. Chan cited the example of the Tadawul ETF that tracks Saudi Arabia’s economy that was launched in 2023. “These fundraising options are there for you to explore and Hong Kong to service your needs,” said Chan. Hong Kong is a resilient business and “superconnector” to the GBA and the rest of China, making it the ideal springboard for Indonesia businesses to access new opportunities. Indonesia is the most heavily populated of the 10 Asean members, with nearly 280 million people. It is Asean’s largest economy and its second-largest recipient of foreign direct investment (FDI), after only Singapore. In 2022, the country attracted over US$43 billion in FDI inflows. Of this amount, Hong Kong contributed US$5.5 billion, making it the third-largest source of FDI in Indonesia, behind only Singapore at US$13.3 billion and mainland China with US$8.2 billion. The Indonesia Stock Exchange ranked 29th globally last year in terms of fundraising, as the number of initial public offerings (IPOs) fell 42 per cent to 41, while the proceeds raised shrank by three-quarters to US$876.1 million, according to the LSEG’s data. Hong Kong was ranked fifth globally during the same period.