The Stampede To Finance Indonesia Inc.

Privatizations have thrown Wall Street firms into close combat

It was one of the biggest splashes in Jakarta's financial circles in some time. This January, Merrill Lynch & Co. opened a 9,000-square-foot office in the glitzy, 32-story tower that houses the new Jakarta Stock Exchange. Curiously, though, the expensive office space had remained empty for a year while Merrill's bankers worked out of the Grand Hyatt Jakarta. Merrill says its staff was too busy with two big privatization deals to move earlier. But sources say Merrill had another motivation for delaying. The firm was initially unsure whether to make a big commitment to Indonesia and wanted to keep its options open. Yet it wanted to appear more committed than competitors, especially archrival Morgan Stanley & Co., which didn't have an office in town. Thus, in a country where perception is almost as important as reality, Merrill signed up for the high-visibility space with great fanfare but really waited a year before it took the plunge and actually opened its office.

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