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• April-2020: Power & Energy In Indonesia
  PEFINDO is of the view that long-term energy demand in Indonesia is correlated with the growing population and economic growth. The Ministry of Energy and Mineral Resources (ESDM) predicted electricity needs in the country will grow by 7% every year until 2027, driven by domestic household consumption. This affects the trade deficit, especially in relation to crude oil (including oil fuel) and the gas sector. To mitigate the energy imbalance, the government is committed to achieving 23% renewable energy in the national energy mix by 2025, in alignment with its commitment to mitigate climate change. More detail ...
• February-2020: Slowing Growth Continues
  The finance industry reported weak financing growth of 3.7% year-on-year (YoY) to IDR 452.2 trillion in 2019, lower than the compound annual growth rate (CAGR) in the last four years of 3.9%. This percentage is also lower compared to the previous year, which was 5.2% YoY. More detail ...
• December-2019: Indonesia’s Petrochemical Industry
  We are of the view that the outlook for the petrochemical industry is stable. Prospects for demand growth are positive in the medium term, although there are short-term risks from the slowdown in the production of plastic and rubber-based goods. Even low oil prices allow producers to maintain a stable level of profit. From the supply side, Indonesia needs new investment to reduce import dependency, especially for aromatic products. More detail ...
• October-2019: The Banking Industry
  We are of the view that the banking outlook is relatively stable in the medium term. This is supported by relatively stable profitability, maintained liquidity and strong capital. We expect liquidity conditions to start loosening, along with accommodative monetary policies adopted by Bank Indonesia. This is reflected by a decrease in the loan to deposit ratio and a decrease in short-term interest rates on the interbank market. More detail ...
• August-2019: Base Metal Industry
  We see downward pressure on base metal prices in the short term in line with the prospect of a slowdown in the global economy, the tension from the trade war, and the fundamental conditions of supply and demand. The outlook for the domestic industry is highly exposed to global demand, because most of the output produced is shipped overseas as domestic absorption is limited. More detail ...
• June-2019: Non-Life Insurance Industry
  We see the outlook of the non-life insurance industry as relatively stable. We expect growth this year to be in line with the 10% target, even though challenges remain in a number of segments. More detail ...
• April-2019: Food & Beverage Industry
  We are of the view that the food and beverage industry will be stable in the short term. We are also of the view that growth will be prospective in the short term and higher than Indonesia's economic growth, supported by stable inflation, a level of confidence and maintained purchasing power. The per capita expenditure for packaged food and beverage products also continues to grow, driven by an increasingly urban society and changes in consumption patterns among the Indonesian people. More detail ...
• February-2019: Multifinance Industry
  We are of the view that the growth outlook for the multifinance financing industry is still challenging. Funding is becoming tighter as interest rates increase, adding to the challenge from the disruption by financial technology companies (fintech). More detail ...
• December-2018: Property Industry
  We are of the view that the demand prospects of the property industry will be weak in the short-term, but we also see supply continuing to grow, creating excess in the market, especially in the office and retail spaces. Higher interest rates and lower affordability will limit demand recovery as mortgages become more expensive. The shift to digital platforms could also disrupt businesses, such as retail, with conventional stores beginning to relocate to online spaces. More detail ...
• October-2018: The Banking Industry
  We are of the view that the outlook for the banking industry is relatively stable in the medium term. Growth prospects are likely to be moderate, in line with increasing risk pressure stemming from rising interest rates and rupiah depreciation. Banking liquidity is likely to be relatively moderate, as funding from deposits offsets credit growth in line with banking efforts to raise deposit rates. Banking capital has remained strong, with the capital adequacy ratio far above regulatory requirements. more ... For further information please register on our website. More detail ...
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• April-2020: Adapting to the New Normal
  PEFINDO is of the view that the spread of COVID-19 is changing how we live, confining many people to their homes and radically altering the way we move about. Since the magnitude and speed of the collapse in activities that has followed is unlike anything experienced in our lifetime, and the pandemic is inflicting high and rising human costs worldwide, the necessary protection measures are severely impacting economic activity. Despite the negative effects, the pandemic has already changed consumer behavior, with more concern for health and boosting the online sectors, and drawing some of us to altruism and the collective economy rather than an agglomeration of fragmented individuals. More detail ...
• February-2020: Coronavirus : The Downside Risk and Policy Maker Response
  PEFINDO is of the view that the rapid spread of the coronavirus disease (Covid-19) that was first detected in Wuhan, China, on December 31, 2019, will have a negative impact on global economic growth and Indonesia as well. Supply chains are disrupted, demand for final goods has weakened, commodity prices are slumping, and risk aversion sentiment has hit investors on a global scale. According to the World Health Organization (WHO), we have to realize that the fatality rate of Covid-19 as of March 1, 2020, was only at about 3.2%, lower than the Severe Acute Respiratory Syndrome (SARS) virus that killed about 10% of all infected individuals and the Middle East Respiratory Syndrome (MERS) outbreak in 2012 that had a fatality rate of around 35%. More detail ...
• December-2019: Recession Risks Are Receding But We Still Face Uncertainty
  PEFINDO is of the view that the threat of a recession in 2020 has receded, mainly due to the normalization of the yield curve and the progress in the trade negotiations between the United States of America (US) and China. However, there are still uncertainties ahead. The US and other countries may have their own respective risks, and interconnected geopolitical threats and other non-economic risks need to be navigated in order to take advantage of more opportunities in 2020. More detail ...
• October-2019: Indonesia’s Comparative Advantage
  PEFINDO is of the view that the Indonesian economy is becoming “the most beautifull” investment destination among its peers nowadays. The fundamentals of the domestic economy are relatively stable, indicated by a decrease in risk perception, stable returns and upgraded rating. But although global recession indicators have recently stopped flashing red, given the normalized yield curve and progress in the US-China trade negotiations, there are still uncertainties ahead, especially from trade tensions and geopolitical risk. More detail ...
• August-2019: Bank Indonesia’s Changing Stance
  In 2019, the majority of central banks changed their policy stances from hawkish in 2018 to dovish. Bank Indonesia (BI) appears to be following this changing global monetary policy trend. In the first quarter of 2019, Indonesia’s central bank still gave hawkish signals in looking at the economy. But at the beginning of the second quarter of 2019, it began to turn around and start giving dovish signals to the domestic economy. More detail ...
• June-2019: Global Investment Shifts Amid Global Economic Uncertainty
  As a developing country, Indonesia is not immune to the impacts of the current global economic condition. This was seen in the GDP growth figure for the first quarter of 2019, which declined to 5.07% from 5.18% in the last quarter of 2018. Economic growth for the full year of 2018 was 5.17%. More detail ...
• April-2019: Bank Indonesia’s Dilemma: Reduce Domestic Cost of Funds or Maintain Capital Inflow?
  Indonesia's trade balance is showing signs of recovery, recording two consecutive months of surpluses at USD329.5 million in February and USD540.2 million in March. This is good news as it influences reserves assets, rupiah stabilization and economic growth. As pressure from the trade sector is easing, the US Federal Reserve has indicated it will keep its policy rate unchanged at 2.5% this year, so opportunities for Bank Indonesia to reduce its policy rate (and cost of funds) are increasing. More detail ...
• February-2019: Growing Sustainable Debt Instrument Trend
  PEFINDO is of the view that the trend towards issuing sustainable debt instruments — green bonds, green commercial papers, and sustainability-linked loans — is growing significantly. Globally, the sustainable debt instruments market surged by 26% year-on-year (yoy) in 2018 to a record USD247 billion, on the back of solid growth from the green bonds sector and the emergence of a number of new products. More detail ...
• December-2018: PEFINDO 2019 Economic and Corporate Bond Outlook
  PEFINDO forecasts that the external and internal challenges faced by the Indonesian economy in 2018 will still linger over the course of 2019. The monetary policy normalization of the US Federal Reserve or Fed (followed by the European Central Bank or ECB and the Bank of Japan or BoJ), as well as the US-China trade war will continue to be the main challenges for the Indonesian economy in 2019. More detail ...
• October-2018: Time Consistency to Stabilize Rupiah
  We are of the view that the time consistency (and credibility) of Bank Indonesia’s monetary policy will be understood by economic agents, and will consequently stabilize the rupiah. more ... For further information please register on our website. More detail ...
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• April-2020: The Countercyclical Policy Effect on the
  PEFINDO is of the view that soon after the World Health Organization (WHO) declared COVID-19 a pandemic on March 11, the global financial market rapidly moved into unprecedented territory. The yield on Indonesia’s 10-year government bond jumped 140 basis points (bps) from 6.97% on March 11 to 8.37% on March 24. Pressure further increased when global oil prices tumbled below zero for the first time in history. Luckily, the countercyclical policy response with ultra loose monetary policy and fiscal stimuli from many countries, including Indonesia, gives rise to expectations that economic conditions would soon ease and economies will start to recover. More detail ...
• February-2020: Yields Lower But Prefer to Owe Abroad
  Before they began crawling up with foreign investor capital outflows, yields dropped quite significantly at the beginning of this year. But a low yield does not necessarily encourage the issuance of corporate debt securities in the domestic market. According to Bloomberg data, the effective yield of three-year and five-year tenor corporate bonds dropped by 62 bps and 30 bps year-to-date, respectively, to 6.728% and 7.242% as of March 2, 2020. More detail ...
• December-2019: Although corporate bond yields have fallen, corporate debt coupons are still resistant to going down to a comparable rate.
  We see this because the market is not liquid and demand is smaller than the government bond market. Many institutional investors still favor the government debt market; as a result they still have high returns to absorb the corporate debt. They usually also buy and hold bonds until maturity rather than transacting them for capital gains. More detail ...
• October-2019: Corporate Bonds
  We see the issuance of debt securities as increasingly lively toward the close of 2019. As of November 27, 2019, the issuance for the year totaled IDR129.4 trillion, and for the full year of 2019 it is will exceed the previous year’s total of IDR132.4 trillion. More detail ...
• August-2019: Corporate Bonds
  We expect issuance costs to be lower in the near term. Lower interest rates and benchmark yields are catalysts to reduce funding costs in the next few months. Based on IBPA data, corporate bond yields for major tenors, three years and five years, closed at 7,698% and 7,940% as of September 26, 2019, down 153bps and 131bps, respectively. More detail ...
• June-2019: Corporate Bond Market
  We expect the positive trend in the government bond market to boost the performance of the corporate bond market. Corporate bond yields continued to fall, heading to their lowest point in the past three years. As of July 16, 2019, yields for the three-year and five-year tenored AAA-rated corporate bonds were 7.407% and 7.777%, respectively, dropping by 183 bps and 147 bps YtD. More detail ...
• April-2019: High Costs Reduce New Issuance
  At the beginning of 2019, apart from the higher cost of funds, presidential and legislative elections also encouraged companies to wait and see. Even though the effective yields of corporate bonds have dropped, there was still a slight pause to be effective in establishing corporate bond coupons (Exhibit 9). Based on Bloomberg data, the effective yield of corporate bonds ranked AAA with a three-year tenor to 8,347% as of April 25, 2019, down 89 basis points from the end of the previous year. For the same rating of a five-year tenor, the yield fell 79 basis points to 8.464%. More detail ...
• February-2019: Multifinance Industry
  We are of the view that the growth outlook for the multifinance financing industry is still challenging. Funding is becoming tighter as interest rates increase, adding to the challenge from the disruption by financial technology companies (fintech). More detail ...
• December-2018: Corporate Bond Forecast For 2019
  The issuance of corporate bonds in 2019 is forecasted to reach IDR135.2 trillion, relatively stable compared to 2018 (see Exhibit 6). Although the prospects for 2019 are quite good, a number of factors are expected to challenge the corporate debt market, particularly the impact of the increase in benchmark interest rates, the wait-and-see approach among investors, and stricter regulations. More detail ...
• October-2018: Corporate Bond Performance Lacks Foreign Sentiment
  The corporate bond market is performing quite well with a positive return year-to-date, although still below 2.0%. Market exposure is not as big as in government bonds as foreign ownership is not too large. more ... For further information please register on our website. More detail ...
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• June 2015 : Indonesian Economic Outlook
  Announcement of the Central Bureau of Statistics on Indonesia's economic growth during the first quarter of 2015 shows that the economic performance is less encouraging. In the first quarter of 2015, Indonesia's economy grew only by 4.7% (yoy). The economic growth is far lower than the growth in the first quarter of 2014 which was 5.14%. In fact, economic growth in the first quarter of 2015 is the lowest growth in the first quarter since 2009. The slowdown of economic growth was indicated by a slowdown in some leading indicators such as sales of cars and motorcycles, sales of cement, and electricity consumption. More detail ...
• January 2013: 2012 Economic Review
  Indonesia economy 2012, strong domestic demand offsets contracting external demand. Private consumption continues to be the main driver for growth cutbacks and the still weak financial system weighted growth prospect in the former while their spillover effects held back momentum in the latter, including the BRIC. The forecast for Indonesia was also trimmed down, but nonetheless its rate of growth remains well above many others; it is expected to be the second highest growing economy among the G-20. More detail ...
• January 2011 : Indonesia Economic Outlook - Indonesia remain attractive among the Emerging Market
  Indonesia’s strong fundamentals and macro economic stability attract portfolio or direct investments. Indonesia economic growth (GDP in %) is supported by strong domestic factors (consumption and investment) and high external demands, in particular demand for export in commodity. Households’ consumption in 2011 is estimated to continue to increase in the range of 4.8% - 5.3% due to improvement in income level, decline in unemployment rate, and the trend in commodity price increase which will further support exporters buying power. The income per capita indicator also goes up to USD3.000 per capita in 2010. This increase is three times higher than that of 2001. More detail ...
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