More Attractive than China

More Attractive than China

More Attractive than China

Indonesia may be more attractive to investors than China, especially for corporate debt buyers, thanks to better governance and management, a Fitch Ratings executive says.

Andrew Steel, head of Asia-Pacific corporate ratings group at the major international ratings agency, said in Jakarta on Tuesday that he often got asked by US investors about investment conditions in Indonesia versus China, the world’s second-largest economy, which overtook Japan earlier in 2011.

In the area of governance — which could have a great impact on corporate performance — China ranked lower than Indonesia, the largest economy in Southeast Asia, he said.

“If we compare governance here [in Indonesia] where you have BBB- with China, which has an A+ sovereign rating, we’d actually perceive corporate governance in China to be fractionally worse than Indonesia,” Steel told reporters Tuesday.

“And also, Indonesia is a much more established and developed corporate market than China,” he added, citing China’s communist economy, which created tension for the capitalist model. “So they [Chinese companies] tend to be very, very equity focused, not debt focused.”

Indonesia in the past has learned a lot of lessons about volatility, hedging and currency, so the management teams are better in understanding debt investors’ requirements and the need for stability and predictability, Steel said.

“A year-and-a-half ago, maybe they were interested in China, now it’s more Indonesia and India. Most of them have their focus on Indonesia because they see the scale of the country,” he added.

China began 2011 facing threats of overheating as double-digit economic growth and high inflation prompted policy makers to take efforts to slow down the economy.

Indonesian authorities, on the other hand, are still pushing pro-growth efforts now as the country’s economy grew 6.5 per cent last year while annual inflation was at a 20-month low of 3.79 per cent in December.

These factors have created a change in wealth distribution, which Steel considered very important from the corporate perspective. “Those give a very good backdrop for the companies to perform well and to achieve stronger growth, which makes it an attractive investment area.”

Aviliani, an economist at Indonesia’s Institute for Development of Economic and Finance (INDEF), said even for a larger scope of investment — not only corporate debt — Indonesia was more promising than China.

“China is the world’s most populous nation, but investments have been full capacity, while Indonesia, the world’s fourth-largest market for consumption, is still in need of Rp 5,400 trillion (US$ 595 billion) of infrastructure and real sectors,” she said.

?Esther Samboh The Jakarta Post

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Artikel ini dibuat oleh Penulis Terverifikasi GNFI, dengan mematuhi aturan menulis di GNFI. Isi artikel ini sepenuhnya menjadi tanggung jawab penulis. Laporkan tulisan.

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Akhyari Hananto

Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy

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