Primary tabs

Indonesian bonds turn top Asia performers on rating upgrade hope

Bloomberg Published on Mon, May 16, 2016 / 8:54 AM GMT+8

A-

A+

HONG KONG (May 16): Indonesian corporate dollar bonds have turned into Asia’s best performers this year and fund managers say the chances of the nation winning a higher debt rating could supercharge the rally.

As President Joko Widodo improves government finances, S&P Global Ratings may upgrade the nation to investment-grade this year, according to BEA Union Investment Management and Pinebridge Investments. Indonesian US currency bonds gained 11.9% this year, the most on a Bank of America Merrill Lynch index of Asian company debt. In 2015, it was the second-worst performer after Mongolia.

"The fundamentals of Indonesia really improved a lot," said Pheona Tsang, head of fixed income at BEA Union in Hong Kong, which manages US$6.8 billion ($9.3 billion) of assets. "We are past the panic mode last year when we were very concerned about the currency."