Indonesia is a key emerging market for Bloomberg LP, as multi-bank foreign exchange trading using the Bloomberg system has grown strongly across the Southeast Asian region.Paul Tivnann, global head of foreign exchange and commodities electronic trading at Bloomberg, said that year-to-date the volume of foreign exchange globally on the Bloomberg platform has increased 50 percent.
Bloomberg — a global leader in providing financial news, data and services — offers a foreign exchange trading platform for corporate treasurers and for exchange traders through its service Bloomberg FXGO. That allows corporate executives to get prices from preferred banks, execute trades and integrate with their order management, risk management and back office systems — all on one platform.
More than 6,800 market participants in more than 100 countries use Bloomberg’s FXGO.
“In terms of actual numbers of FXGO users, Bloomberg multi-bank FX trading platform, we have seen 25 percent growth globally. In Asia, we have seen 60 percent growth in average daily volume, and nearly 35 percent growth in users,” Tivnann said.
He acknowledged that investors’ concerns on the United States, the largest economy in the world, tapering its massive stimulus spending program — known as quantitative easing — and on how the US managed its debt ceiling have caused currencies in emerging markets, including Indonesia’s, to weaken.
The rupiah has fallen 15 percent against the US dollar this year. On Friday it was quoted at 11,142 per dollar, according to data from the central bank.
“The big question mark is confidence in the global economy and when the US will begin to taper QE. If money continues to flow in the system, it is going to be positive for emerging markets,” Tivnann said.
“In the short term, another question revolves around the US debt ceiling and how the US politicians handle that process because any technical default by the US will have significant impact on global confidence and economic growth.”
Nitin Jaiswal, Bloomberg’s head of sales for the Association of Southeast Asian Nations region and South Asia, said the company’s business is, to a certain extent, tied to global growth.
“When there is more global trade, that increased flow of money has positive spillover effects for our business. And that’s what’s happened for us in Asean and certainly Indonesia in the last few years,” he said.
Tivnann, from London, and Jaiswal, from Singapore, were in Jakarta for the Bloomberg FX Summit on Wednesday. Bloomberg partnered with ACI Indonesia, a local foreign exchange association, to host the panel discussion that was attended by industry leaders on key topics related to currency issues. Each year, Bloomberg hosts FX summits in several markets globally.
Still, “Indonesia is a key emerging market and we are committed to supporting the development of its financial sector through product innovation and key partnerships with government agencies and regulatory bodies,” Jaiswal said.
“Together with industry associations and market participants, we’ve conducted many specialized workshops and hosted forums on the bond market, futures, swaps, hedging and risk management to better educate the market contribute to the growing talent pool of financial professionals here in Indonesia,” he said.
When asked about his outlook for Indonesia and investors’ confidence in holding portfolio assets from the country, Jaiswal said: “We’re seeing very divergent views in speaking with clients residing in Indonesia and outside of the country. Domestically people are still very optimistic and we see that reflected in our business momentum in Indonesia.”
He did not provide data on Bloomberg’s revenue from Indonesia, but said that Asean was the key focus for investors globally in the past two or three years and “Asean is one of the best performing regions in the world from Bloomberg’s business perspective.”
Its Asean business makes up about 10 percent of the company’s global business. Bloomberg’s revenue jumped 4.5 percent to $7.9 billion last year.
Bloomberg has sought to diversify its markets in recent years, by targeting the client base more to emerging markets, including from Asia, where the economy is growing faster than developed markets.
Attendees at the panel discussion included Benedict Bingham, senior resident representative of Indonesia at the International Monetary Fund; Fauzi Ichsan, managing director and senior economist at Standard Chartered Bank Indonesia; and Bimo Notowidigdo, head of treasury at Bank Negara Indonesia.
They also discussed the outlook for the Indonesian economy.
The Jakarta Globe is a subscriber to the Bloomberg Professional. Financial data, news and services giant Bloomberg LP offers a foreign exchange trading platform for corporate treasurers and for exchange traders through its service called Bloomberg FXGO. JG Photo/Afriadi Hikmal