ASEAN KEY DESTINATIONS
Korean firm eyes Indo retailer
The South Korean retail giant said it had submitted a bid for Matahari, but spokesman Park Sang Sub declined to give details on the size of the offer.
Matahari shares were up 4.8 percent to Rp 1,500 on Tuesday on the news of the potential sale, which was first reported by Reuters.
The Carlyle private equity firm was also in the race for Matahari, Reuters reported.
A Matahari director told the Jakarta Globe that the management was unaware of the news coming out of Singapore and was therefore unable to comment.
"We have however instructed Merrill Lynch to explore investment opportunities outside of Indonesia and to advise on what is best for the shareholders, but so far nothing concrete has emerged," they added.
Economists and market analysts say it is clear Indonesian consumers are proving highly attractive, with per-capita income inching close to $3,000.
With a young and productive population, Indonesia's demographics are also more attractive than China's, even though China has a population more than five times as large.
Indonesia's rising middle class, estimated at 30 million currently and expected to double in the next 10 years, is also proving to be a magnet for foreign and domestic retailers.
Growth in consumption has further been underpinned by macroeconomic stability and large inflows of foreign investment.
"We have a fiscal posture that other nations are dying for," Gita Wirjawan, chairman of the Investment Coordinating Board (BKPM), told the Jakarta Globe.
"Our debt to GDP ratio has diminished from a high of 80 percent five years ago to 26 percent, and will fall to 23 percent by 2014."
He added that foreign direct investment could hit $20 billion this year, with South Korean firms among the most bullish on Indonesia.
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