The COVID-19 outbreak and a new round of technological and industrial revolution are profoundly reshaping the global economic structure, leading to a new wave of globalization and democratization of ideas and opportunities. As the tide rises and falls in these turbulent times, seasoned enterprises and institutions are striving and thriving to live with crises.
Here in the BRI (Belt and Road Initiative) Finance EMBA Program at Tsinghua PBCSF, students are actively seeking new opportunities under the Belt and Road Initiative. They are explorers of the new economy, aiming at emerging markets, boldly scouting for market and technological innovations, and leading enterprises to brave the storm in the post-epidemic era. They are also trendsetting in the new globalization. For this special issue, we invite Pandu Sjahrir, Student of the BRI EMBA Program Inaugural Cohort, and Specialist at the Indonesian Stock Exchange (IDX) to share his experience and insights on Indonesia market.
Guest in this Edition:
Pandu Sjahrir, Student of the BRI EMBA Program Inaugural Cohort, and Commissioner at the Indonesian Stock Exchange (IDX).
Pandu Sjahrir, a student of the inaugural cohort of Tsinghua PBCSF’s BRI EMBA Program, is working to help tech enterprises list on the IDX – this was his mission when he became IDX Commissioner.
His mission is backed by his wealth of experience and decades of achievements and the unrivalled network he has built as an investor. His current executive positions range from Vice President Director of TBS Energi, an energy company, Chairman of the Indonesian Coal Mining Association, Chairman of the Indonesian Fintech Association, Partner at Indies Capital, an alternative asset management firm, as well as Partner at AC Ventures, a venture capital firm.
His influence is felt in three of Southeast Asia's biggest Internet companies. He is the Indonesian Chairman of Sea Group, a Singapore-based tech giant with a market capitalization of $130bn. He sits on the board of GoTo, Indonesia's largest tech company. He also serves as an independent commissioner of EMTEK, an Indonesian technology and media conglomerate with digital businesses such as Bukalapak, an e-commerce platform, and Dana, an e-wallet provider. Bukalapak went public on the IDX in August, becoming the country's largest-ever IPO by raising $1.5bn and the first tech unicorn to tap the country's stock market.
A spirit to serve the nation and a passion to empower young people to understand and access capital markets are evident through Pandu's talk. We spoke with him about the present and future of the Indonesian stock market.
1. When you became the commissioner of IDX, you mentioned that your mission is to help local tech companies go public. What progress has been made recently?
At the IDX, my job now is to help more companies go public, particularly high-growth tech companies and to make the stock market a good place for young people to invest.
Before I joined IDX last year, we had about two million active users. Now we have seven million. The average age is 26, so they're still young.
At the same time, it has been the best year ever for new listings on exchanges. Bukalapak, one of Indonesia's largest e-commerce companies, just raised $1.5 billion through its IPO, which became the country's largest IPO to date. We've had two IPOs over $1 billion this year and three more over Rp1 trillion.
This shows strong interest in the Indonesian market from both local and foreign investors. At the same time, there is strong demand from young domestic investors who want to participate in the growth of our capital markets.
In addition, we just announced new listing rules that allow for multiple share structures, similar to other markets, which means company founders can retain more say in how companies are run after listing. That could push Indonesia's biggest tech companies, like GoTo, to go public as early as next year.
Our stock market has improved a lot and is steadily becoming more attractive. I now want not only to help companies go public, but also to empower young people who have never had access to capital markets before, so that they will see the value of investing in capital markets and build their own wealth over time.
2. What are the opportunities and challenges for tech companies to go public in Indonesia?
In my opinion, the opportunity is immense right now, because you can see the demand is surging. However, educating Indonesian investors on how to value tech companies is another matter. That's our challenge, and I see it as our job is to give our young investors the skills they need to do so.
3. Based on your investment experience, how do you decide whether a company is worth investing in? Which aspects do you consider?
The first is the people, the founders and the team. I take the time to get to know the team and the founders, look at their characteristics, see if they are good in their roles, and if they have leadership potential.
The second is industry. What are the trends in the industry itself? Does the industry matter? Is the market big enough? Can it have large impact on customers?
The third is how they use technology. I look at whether the founders are trying to use new technology to help customers solve critical problems or improve efficiency.
4. According to your prediction, which industry will Indonesia's next unicorn emerge from? What will be its characteristics?
I am very excited for e-commerce. It is still very new and will continue to grow. Especially e-commerce related logistics, because logistics is a key part of the entire e-commerce ecosystem, especially considering this year's rise in demand for e-commerce, logistics has ushered in a great development.
The next one is Fintech. There are a lot of companies in the Fintech sector in Indonesia that are worth hundreds of millions of dollars. They are maybe one or two steps away from becoming a billion-dollar company. If there is further segmentation, unicorns are likely to emerge between payment firms and lending firms.
The third is agricultural infrastructure, because agriculture is the biggest pillar of Indonesia's economy.
5. How do you see the Belt and Road Initiative and the economic development and investment opportunities in Indonesia amidst the current international environment?
I think the Belt and Road Initiative has played a powerful role in promoting the relationship between Indonesia and China. First of all, Indonesia and China have excellent relations. Over the past five years, Indonesia has benefited not only from Chinese capital, but also from Chinese technology and knowhow. I think the relationship, economic development and investment cooperation between the two countries have never been closer. In the future, Indonesia and China will need to develop even stronger ties so we can advance our shared common economic goals and promote our rich cultures while fostering prosperous and resilient societies.
6. What changes have the two years of study in the BRI EMBA Program brought to you personally as well as career wise? Do you have any memorable experiences or memories?
I came to Tsinghua PBCSF already holding an MBA from Stanford. But coming here has really exceeded all my expectations. I opened my eyes and learned a lot about culture and business practices that I wasn’t able to learn when I was just doing business in Indonesia. I think Tsinghua PBCSF’s BRI EMBA Program has a fine balance between academics and culture.
Students of this unique BRI program are leaders from all walks of life around the globe. We are all very close and can actively communicate and learn from each other to better serve our countries.
7. What are your personal and business development plans for the next?
On the one hand, I hope to lead the companies I lead to sustainable development. As TBS Energi shifted from coal to green energy, and we are in the process of a mega energy transition and building a renewable energy platform. We just announced a partnership with Gojek a few weeks ago to sell two-wheeled electric vehicles.
On the other hand, we have been investing more in tech over the past two years. So far, we have invested more than $500mn into tech businesses, totaling more than 30 companies, making us one of the most dedicated tech venture capital firms in Indonesia. We hope to continue strengthening the financial ecosystem in Indonesia, so that it becomes more professional and mature.
