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Straits Times
02-08-2025
- Straits Times
Fast train, slow profit: Indonesia's Whoosh hits a money bump
Sign up now: Get ST's newsletters delivered to your inbox The trains servicing the route can reach 350kmh, though their speed varies along the journey – with the passengers hearing only a whisper-soft hum. JAKARTA – Hardly making any noise, the bullet train hurls past West Java's rice fields as it races from the nation's capital towards Bandung, Indonesia's third-largest city. This is Whoosh, the country's – and South-east Asia's – first high-speed rail service, with the trains able to cover the 142km separating the two cities in just 45 minutes. The trains servicing the route can reach 350kmh, though their speed varies along the journey – with the passengers hearing only a whisper-soft hum. Twelve trainsets, including one for inspection, operate on the line. All were designed and built in China but customised for Indonesia's tropical climate and seismic risks. Whoosh has largely lived up to its name since it was launched in October 2023. The sleek red-and-silver trains glide in and out of stations with clockwork precision. Inside, plush reclining seats, carpeted floors, digital displays and attendants in crisp uniforms create an air of calm efficiency as they guide passengers and help with luggage. 'I'm so proud of Indonesia's progress; the ride is so smooth, quiet and fast,' says Ms Eka Rani, a 36-year-old marketing officer, as she settles into her seat on the train from Jakarta. 'The ride is too short to spend time working on my laptop, so I shall just relax and enjoy the scenery.' The journey begins at Halim station in Jakarta and ends at Tegalluar Summarecon station on the outskirts of Bandung, with brief stops at Karawang and Padalarang along the way. By June, Whoosh had ferried more than 10 million passengers on some 30,000 trips. And in a country long plagued by congested roads and ageing railways, it became a symbol of Indonesia's infrastructure ambitions. A flagship initiative under former president Joko Widodo and part of China's Belt and Road Initiative, Whoosh slashed travel time between Jakarta and Bandung, a journey that would otherwise take around three hours by car or regular train. But the speed and sleekness belie a sobering fact: Whoosh is bleeding money. Losing steam Whoosh is an acronym for Waktu Hemat, Operasi Optimal, Sistem Handal – meaning Time-Saving, Optimal Operation, Reliable System. Built at a cost of US$7.3 billion (S$9.4 billion), the Jakarta-Bandung high-speed rail was funded largely through loans from the China Development Bank. Operated by Kereta Cepat Indonesia China (KCIC), the project was a joint venture between Indonesian and Chinese state firms. The Indonesian stake was held by Pilar Sinergi BUMN Indonesia (PSBI), a consortium led by state rail operator Kereta Api Indonesia (KAI). Commuters taking a 20-min feeder train to the Bandung city centre after their Jakarta-Bandung journey on Whoosh train on July 30. ST PHOTO: ARLINA ARSHAD In 2024, PSBI posted losses of 4.19 trillion rupiah (S$330 million), according to KAI's financial report. KAI, as PSBI's majority shareholder, accounted for 2.23 trillion rupiah of that amount. The Chinese side has not released its figures, though analysts believe their books are similarly in the red. Whoosh is bleeding money due to a combination of massive construction debt, low passenger numbers and high operating costs. Its remote station locations and weak feeder links have also made it less attractive to daily commuters. Indonesia's newly established sovereign wealth fund, Danantara, has stepped in to help address the mounting debt. 'We are currently reviewing operational matters and considering long-term solutions to address the consortium's substantial debt,' Danantara chief operating officer Dony Oskaria told lawmakers during a parliamentary hearing on July 24. He added that several proposals would be submitted to the government. Bank Permata chief economist Josua Pardede said Whoosh's losses stemmed largely from underwhelming ridership. Between October 2023 and December 2024, the train averaged just over 16,000 passengers daily – barely half its 31,000 target. Cost overruns also inflated financial projections. 'The resolution plan through Danantara, which involves restructuring debt, is indeed necessary, given the large financial burden caused by cost overruns and not meeting the revenue target,' he told ST. Between October 2023 and December 2024, the train averaged just over 16,000 passengers daily – barely half its 31,000 target. ST PHOTO: ARLINA ARSHAD But some observers remained sceptical that Danantara could pull the project out of debt. 'From the start, the construction expenditure was too big,' said Mr Ki Darmaningtyas, a transport analyst from the Strategic Transportation Initiative (Instran), a non-profit focused on transportation development. He added that ticket revenue was not enough to cover all the operational costs of the service. 'Perhaps ticket revenue only covers electricity and basic maintenance – maybe not even that. Let alone staff salaries and other expenses.' Like it or not, he said, the state ultimately has to shoulder the burden. He explained that Danantara's funds come from the national budget, as well as from loans and bond issuances used to finance projects and manage debts. 'Where will the money come from? Debt again. It is just digging a hole to fill another – 'gali lubang, tutup lubang',' he told The Straits Times, using an Indonesian proverb. Not cheap, not seamless Whoosh fares range from 200,000 to 600,000 rupiah (S$16 to S$47) depending on class and time – a stretch for daily commuters, students and lower-income workers. While the onboard experience is polished, first- and last-mile connectivity remain a work in progress. From Padalarang station, the third of four stations, passengers bound for Bandung's city centre have to transfer to a slower feeder train that takes another 20 minutes. Others scramble for directions or try to book a taxi or Grab ride. The seamlessness ends there. While Jakarta's Halim station offers food outlets from Starbucks and Texas Chicken to Subway, the selection at Padalarang can be counted on one hand. While the onboard experience is polished, first- and last-mile connectivity remain a work in progress. ST PHOTO: ARLINA ARSHAD Dr Muhammad Zulfikar Rakhmat, a researcher at the Centre of Economic and Law Studies, said weak feeder links and high fares limit Whoosh's appeal. 'High fares after the promotional period and weak feeder transport links, especially at Karawang and Padalarang stations, make it less attractive for daily commuters,' he told ST. Still, he believed Danantara's restructuring could ease pressure on KAI and its partners 'if implemented effectively', with sustainable strategies such as boosting ridership, improving feeder links, and diversifying revenue through advertising, retail leases and park-and-ride facilities. Eyeing future Surabaya extension Despite the deep losses, the government has pressed on with plans to extend Whoosh to Surabaya in East Java. On July 1, Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono called the Jakarta-Surabaya high-speed rail 'a game changer' and one of President Prabowo Subianto's key priorities. 'If the Jakarta-Surabaya HSR can be realised... it will not only improve intra-regional connectivity, but also boost the local economy,' he was quoted as saying by The Jakarta Post. The Jakarta-Surabaya high-speed rail extension has been included in Indonesia's National Railway Master Plan, but progress has stalled due to incomplete regulations, and chiefly the absence of a supporting presidential regulation. Once the regulation is issued, joint feasibility studies with China are expected to begin. A pre-feasibility study is currently being prepared, exploring three possible routes: southern, central and northern Java. The government aims to cut travel time from Jakarta to Surabaya from 10 hours to just 3½ hours, with fares expected to be more affordable than for the existing Jakarta-Bandung high-speed line. Mr Pardede acknowledged that the route would connect Indonesia's two largest cities and could see stronger demand. But he cautioned: 'The extension of the line to Surabaya must certainly begin with a detailed feasibility study that comprehensively considers costs and benefits.' And he added: 'The government should not use the state budget to build this high-speed rail so as not to increase the fiscal burden.' Dr Zulfikar also warned that expanding the line could bring further costs, rising debt, and underutilised infrastructure. Mr Darmaningtyas was more blunt. 'The extension will be a burden on the state for life,' he said. 'Please do not go ahead with the plan. If the government does not want to be burdened forever, it must cancel the expansion.' Political legacy Mr Darmaningtyas said the high-speed rail was more of a political trophy than a transport necessity. He noted that regular trains between Jakarta and Surabaya were rarely full outside weekends and holidays. 'So, who would take the high-speed train?' he said. He added that existing toll roads and train lines connecting Bandung to Surabaya already met travel needs, questioning the urgency of a new link. Mr Darmaningtyas also flagged conflicting policies. 'The government built two new toll roads between Jakarta and Bandung even as it promoted rail travel. That just encourages people to drive instead,' he said. To him, Whoosh was less about serving commuters and more about cementing a political legacy for Indonesia's leaders. 'They just want to prove something. They never think about sustainability,' he said. 'When Jokowi was president, what mattered was that he built a high-speed train. Whether it burdens the country or not is someone else's problem – the next president's problem.' Bandung-based make-up artist Lenny, 43, said that while she loved her fast rides, the project felt half-finished. 'Transport is costly, I get that. But if stations were in the Jakarta and Bandung city centres, more people would use the train,' she said. 'As usual, we aim for the stars, but get lost in the sky. Strong ambition, poor execution.'
Arabian Post
15-07-2025
- Business
- Arabian Post
China Development Bank Expands Funding with Dual‑Currency Bond Listing
China Development Bank has successfully listed two bonds on Nasdaq Dubai, raising a total of more than US $1 billion in a strategic bid to broaden its foreign‑currency funding channels and attract global investors. The issuance includes a US $500 million three‑year floating‑rate tranche tied to SOFR + 30 bps, and a €500 million three‑year fixed‑rate tranche offering a 2.25 percent coupon. Both tranches carry an A1 rating from Moody's. Investor appetite proved robust across both offerings. The euro tranche was subscribed 15 times over, marking the highest subscription ratio so far for a Chinese bank's single public bond issue, while demand for the US dollar tranche was three times oversubscribed, achieving the tightest spread to SOFR among comparable issuances. Interest originated primarily from institutions in Europe, the Middle East and Asia, including banks, sovereign entities, investment funds and asset managers; more than 30 percent of the euro tranche was allocated to high‑quality supranational, sovereign, and agency investors. Nasdaq Dubai welcomed the listing under the official securities list of the Dubai Financial Services Authority, with Hamed Ali, CEO of both Nasdaq Dubai and Dubai Financial Market, describing the move as a deepening of financial ties with Chinese lenders. 'This milestone underscores Dubai's position as a trusted global hub for cross‑border capital flows,' he commented. ADVERTISEMENT This dual‑currency offering forms part of CDB's long‑term strategy to diversify its funding base. Since resuming international bond issuances in 2015, the lender has raised the equivalent of US $42.5 billion in multiple currencies—USD, EUR, GBP and HKD—through public and private offerings. Nasdaq Dubai, which already hosts over US $13.4 billion in listed Chinese fixed‑income securities and more than US $136.2 billion in total debt issuances, has positioned itself as a preferred centre for Chinese and international issuers seeking cross‑border access. The structure of the issuance—offering both floating‑rate and fixed‑rate components in parallel—addresses differing investor needs. The floating‑rate instrument appeals to US dollar investors aiming to hedge against interest rate uncertainty by aligning returns with short‑term rates, while the fixed‑rate euro tranche delivers stable yield expectations at a time when eurozone rates remain relatively low. The A1 credit rating lends further reassurance of CDB's high repayment capacity. Market analysts suggest that the record subscription levels reflect strong global confidence in sovereign or quasi‑sovereign credit combined with growing investor demand for diversified, high‑quality issuances from non‑Western borrowers. One commentator told Bloomberg that the euro tranche 'demonstrated unprecedented demand for Chinese credit offshore,' a sentiment echoed by allocations to Europe‑based sovereign wealth and supranational issuers. Nasdaq Dubai's hosting of the bond listing lifts its international profile. The exchange has actively courted Chinese sovereign and financial institution issuers—including ICBC, Bank of China, China Construction Bank, China's ministry of finance, and Hong Kong Government entities—by facilitating access to capital from Europe, the Gulf and Asia. With total listings now exceeding US $13.4 billion, the venue's debt market is fast approaching the scale of some European sub‑exchanges. Financial practitioners suggest the listing may act as a template for future issuances from Chinese state‑owned financial institutions, offering investor diversification benefits and potential cost savings through a more competitive pricing environment. European investors, in particular, appear drawn to the euro tranche's high demand, which points to appetite for enhanced yield coupled with capital security. Experts in Gulf and Asia‑Pacific fund flows are now closely watching whether more Chinese issuers will harness Nasdaq Dubai's platform for offshore funding, thereby recalibrating traditional bond‑raising channels via London or New York. Dubai's regulatory framework, overseen by the DFSA, alongside its strategic position between Europe and Asia, provides a compelling value proposition. The success of CDB's dual tranches also underscores the evolving depth of global bond markets. The presence of SOFR‑linked floating‑rate bonds shows growing acceptance of this benchmark outside North America. Meanwhile, the euro tranche sets a new benchmark for Chinese issuers in terms of subscription records and tranche structuring. For China Development Bank, this launch enhances its capabilities to fund infrastructure, social development and global lending priorities. For Nasdaq Dubai, it represents another step forward in building a globally integrated bond market serving issuers and investors across major time zones.
Arabian Post
11-07-2025
- Business
- Arabian Post
Record Global Interest Drives CDB's Dual‑Currency Bond Triumph
China Development Bank has launched a groundbreaking dual‑currency bond on Nasdaq Dubai, bearing an A1 rating from Moody's, with a pair of three‑year notes: a $500 million floating‑rate tranche at SOFR +30 basis points and a €500 million fixed‑rate tranche bearing a 2.25 percent coupon. Investor demand flooded in, especially from Europe, the Middle East and Asia, marking a significant milestone in cross‑border financing. The euro tranche, with its enticing yield, attracted bids reaching up to fifteen times the original size—an unprecedented level for any Chinese bank in a public bond issue. Meanwhile, the dollar tranche saw demand triple the offering and achieved the narrowest spread to SOFR in its peer group. Banks, sovereign entities, asset managers and funds from Switzerland, Germany, the UK, Spain, the Middle East and Asia formed the cornerstone of the investor base. Institutional-quality sovereign, supranational and agency players comprised more than 30 percent of allocations in the euro tranche. This level of participation reflects a meaningful shift in portfolio preferences toward Chinese financial credit. ADVERTISEMENT Nasdaq Dubai, hosting over $13.4 billion in listings from Chinese financial institutions and more than $136 billion in total debt, has once again proven its credentials as a premier hub for international issuers. Hamed Ali, CEO of Nasdaq Dubai and Dubai Financial Market, emphasised that the deal 'further deepens ties with China's leading financial institutions' and cements the emirate's role in global capital flows. The issuance forms part of CDB's broader funding diversification strategy, aimed at expanding its investor footprint and funding sources since returning to offshore markets in 2015. To date, it has raised approximately $42.5 billion through public and private bond issuances in US dollars, euros, sterling and Hong Kong dollars. Market analysts note that the A1 rating from Moody's highlights CDB's resilience and credibility in the global bond market. The rating agency's endorsement also mirrors a wider affirmation of China's sovereign borrowers, given Moody's maintained China's own A1 long‑term issuer rating. Strategically, this dual‑currency issuance represents a smart balance of interest cost and investor appeal. The floating‑rate SOFR‑based tranche is well suited to investors seeking protection against rising interest rates, while the fixed‑rate euro tranche appeals to those prioritising yield stability. Such a mix broadens the appeal across different risk and interest preferences. This bond issue reinforces the growing trend of Chinese policy banks leveraging international platforms to diversify funding and forge deeper ties with global investors. By listing on Nasdaq Dubai, CDB taps into a market that sits at the nexus of Europe, Asia and the Middle East. The choice of Dubai as a listing venue enhances access to a geographically diverse investor base, including GCC sovereign wealth funds, Asian asset managers and European institutional buyers. ADVERTISEMENT Oversubscription levels suggest strong investor confidence in China's policy-driven institutions amid a challenging macroeconomic backdrop. Global investors appear reassured by CDB's credit standing and the bond's structured design. The success could prompt other Chinese policy banks to replicate this strategy, opening fresh avenues for international bond issuance from China. From a regional perspective, the deal underscores Dubai's success in attracting high‑quality issuers in multiple currencies, strengthening its credentials as a bridge between Eastern and Western capital markets. The participation from Europe and Asia highlights that such venues are not viewed merely as regional platforms, but as global financial conduits. CDB's move to raise €500 million at a fixed 2.25 percent coupon is particularly notable given the current low‑rate environment in Europe. By locking in relatively attractive rates in euros, the bank demonstrates market timing and pricing acumen. The floating‑rate dollar tranche aligned closely with SOFR, benefiting from one of the tightest pricing levels seen in similar issuances by Chinese banks. Investor feedback indicates that the differentiated nature of CDB's tranches—combining fixed and floating, and issued in two major currencies—offered portfolio diversification advantages. For markets still wary of geopolitical or macroeconomic uncertainties, this bond provided a route into China's policy debt while leveraging a globally recognised issuance platform. In terms of strategic finance, the magnitude of interest shown may encourage a wave of similar dual‑currency or multi‑currency bond offerings from Chinese sovereign‑backed institutions. These issuers continue to explore leveraging international markets to offset domestic banking liquidity pressures and manage currency allocation across their foreign reserves. Analysts expect the issuance could trigger secondary market trading in both tranches, offering valuable benchmarks for future spreads. These trades may influence the cost of capital for other Chinese institutions planning international funding. On the regulatory front, both the Dubai Financial Services Authority and Nasdaq Dubai ensured rapid admission to listing, reflecting streamlined efficiency in cross-border capital flows. The bond's approval process and listing timeline are likely to be watched closely by other sovereign issuers considering overseas issuance.
Hi Dubai
10-07-2025
- Business
- Hi Dubai
China Development Bank Lists Dual-Currency Bonds on Nasdaq Dubai in Record-Setting Issuance
China Development Bank (CDB) has listed dual-currency bonds worth USD 1 billion on Nasdaq Dubai, marking a significant milestone in cross-border finance and reinforcing Dubai's role as a global hub for fixed income investment. The landmark issuance includes a USD 500 million three-year floating-rate bond and a EUR 500 million three-year fixed-rate bond. Both tranches, rated A1 by Moody's, attracted overwhelming investor demand—underscoring strong global appetite for Chinese credit and confidence in Dubai's market infrastructure. The euro tranche saw record demand, oversubscribed 15 times—setting a new high for a Chinese bank's public bond issuance. The US dollar tranche was oversubscribed three times, achieving the tightest spread to SOFR among similar issuances from Chinese institutions. Investors spanned across Europe, the Middle East, and Asia, with participation from sovereign entities, asset managers, and global banks. Notably, over 30% of euro tranche allocations went to top-tier Supranational, Sovereign, and Agency (SSA) investors. Hamed Ali, CEO of Nasdaq Dubai and DFM, said the listing further deepens ties with Chinese financial institutions and reaffirms Dubai's standing as a reliable platform for cross-border capital flows. CDB's dual-currency offering aligns with its broader strategy to diversify funding and grow its international investor base. Since 2015, the bank has raised USD 42.5 billion through offshore issuances in multiple currencies. Nasdaq Dubai now hosts over USD 13.4 billion in Chinese fixed income listings and more than USD 136.2 billion in total debt issuances. News Source: Emirates News Agency
Zawya
10-07-2025
- Business
- Zawya
China Development Bank lists $1bln dual-currency bonds on Nasdaq Dubai
China Development Bank (CDB) has listed two bonds in multiple currencies with a combined value of more than $1 billion on Nasdaq Dubai. With an A1 rating from Moody's, the bonds comprise a $500 million three-year floating-rate tranche priced at SOFR +30 basis points and a EUR 500 million three-year fixed-rate tranche with a coupon of 2.25%. The dual-currency offering, which is part of the Chinese lender's strategy to diversify its foreign-currency funding and expand investor base, drew significant interest, particularly in Europe, the Middle East and Asia. The euro-denominated tranche was oversubscribed 15 times, the highest subscription level ever achieved by a Chinese lender in a single public bond issuance, while the US dollar tranche was oversubscribed three times. The issuance attracted interest from banks, sovereign entities, funds and asset managers from Switzerland, Germany, the UK, Spain, the Middle East and Asia. According to Hamed Ali, CEO of Nasdaq Dubai and Dubai Financial Market, CDB's bond listing "underscores Dubai's position as a trusted global hub for cross-border capital flows". Nasdaq Dubai currently hosts more than $13.4 billion in Chinese fixed income listings from ICBC, Bank of China, China Construction Bank, China's Ministry of Finance and the Hong Kong Government. Total debt issuances listed on the exchange have exceeded $136.2 billion. (Writing by Cleofe Maceda; editing by Seban Scaria)
