The Indonesian bond market was one of the most developed in the Region prior to the Asian Financial Crisis of the late 1990s. This same bond market had played a significant role in sustaining the capital market as well as supporting the Indonesian government’s development programs.

Today, the conditions for investment are encouraging. Foreign exchange and interest rates have stabilized, many critical debt restructuring programs negotiated and signed, and government economic recovery efforts have begun to take root. Consequently, there is a bigger demand for capital and re-financing. Local banking institutions, many of whom are also coping with their own recovery efforts, are not able to fulfill this renewed demand for funds.

Though the most popular fixed income instruments are long-term corporate and government bonds, these are also available as shorter-term instruments such as Commercial Papers, Medium Term Notes (MTN), Floating Rate Notes (FRN), and Asset Backed Securities.

As an investment, fixed income instruments offers relatively less investor risk, periodical interest payments (coupon bonds), interest payments in advance (zero coupon bonds), and an opportunity to gain from price appreciation. Generally, like any other investment, these type of investments are also subject to risks such as inflation, socio-political conditions, the risk of default, and foreign exchange fluctuations. Nonetheless, in case of liquidation, fixed income investors have the highest priority from the sale of a company’s assets.

As in any investment, it is always best to weigh the potential investor returns versus all possible risks. Information regarding the issue can be obtained from the prospectus, public expose, as well as credit rating and analyst’s recommendation, most of which is facilitated by Pacific 2000.

As the recovery of the Indonesian economy gains momentum, so does the capital markets. As your portal to the many investment opportunities this dynamic market has to offer, Pacific 2000 is your best guide to the intricacies of investing in Indonesia. Investors seeking viable opportunities to invest in Indonesia are encouraged to contact us at our headquarters in Jakarta for more information.

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