{"id":17308,"date":"2019-10-24T08:30:09","date_gmt":"2019-10-24T12:30:09","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/pension-podcast-is-indonesia-too-big-for-institutional-investors-to-ignore-137737"},"modified":"2019-10-24T08:30:09","modified_gmt":"2019-10-24T12:30:09","slug":"pension-podcast-is-indonesia-too-big-for-institutional-investors-to-ignore","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/10\/24\/pension-podcast-is-indonesia-too-big-for-institutional-investors-to-ignore\/","title":{"rendered":"Pension Podcast: Is Indonesia too big for institutional investors to ignore?"},"content":{"rendered":"\n
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\"123RF.com\/Yuttana <\/div>\n<\/p><\/div>\n

Martha Porado<\/span> | October 24, 2019 <\/p>\n

For intergenerational investors, such as foreign pension plans ramping up their exposure to alternative assets and leveraging patient capital, it\u2019s worth paying attention to Indonesia\u2019s potential.<\/p>\n

\u201cIf you follow the logic that the country\u2019s going to be the fourth or fifth largest economy in the world . . . then, to me, it\u2019s too big to ignore,\u201d said Josef Pilger, global pension and retirement leader at EY, during the Canadian Investment Review\u2019s <\/em>podcast \u201cPension Passport.\u201d<\/em><\/p>\n

But Indonesia\u2019s growth story doesn\u2019t come without risks. \u201cThe decent performance of the economy has met some large vulnerabilities and the main one of these is the big and expanding current and trade account deficit,\u201d said Gareth Leather, senior Asia economist at Capital Economics, also speaking during the podcast. \u201cAnd what that means is it makes the currency, the rupiah, quite vulnerable to sudden shifts in global risk appetite.\u201d<\/p>\n

Read: Which emerging markets should investors be considering?<\/a><\/strong><\/p>\n

As well, he notes the country has a high level of foreign currency debt.<\/p>\n

In the coming years, Indonesia needs to focus on infrastructure, said Leather. \u201cIt takes quite a long time to transport goods by sea, the roads are always clogged up and this is the big criticism that foreign investors have of Indonesia.\u201d<\/p>\n

And the major demand for new infrastructure could represent an opportunity for institutional investors looking at the country, said Pilger. \u201cThe country has developed some pretty good internal capabilities to deal with infrastructure and has done a lot of infrastructure investment itself,\u201d he noted, highlighting that between 2020 and 2024, Indonesia needs to spend about US$441 billion on new infrastructure.<\/p>\n

Read: Pension funds\u2019 fixed income allocations losing ground in growth markets: report<\/a><\/strong><\/p>\n

The largest demands for infrastructure are centred on generating enough power for the Indonesia\u2019s enormous population, as well as transportation services, given the need for connectivity between some 1,700 islands. Other infrastructure opportunities include new airports, seaports, hospitals and schools, added Pilger.<\/p>\n

Apart from investing in infrastructure equity, debt investments could be another way to play to the country\u2019s infrastructure growth, he said. In taking on various infrastructure projects, many state-owned enterprises have racked up a lot of debt, creating the opportunity for institutional investors to consider various related debt instruments.<\/p>\n

For investors considering a foray into new countries like Indonesia, Pilger highlighted the importance of building internal capabilities and creating partnerships with local firms that have experience on the ground.<\/p>\n

Listen to the full season of \u201cPension Passport\u201d<\/em> at <\/em>investmentreview.com\/podcasts<\/a>. <\/em>Or download the podcast on Apple<\/a>, Google Podcasts<\/a> and Stitcher<\/a>.<\/p>\n

Read the full article at BenefitsCanada.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Martha Porado | October 24, 2019 For intergenerational investors, such as foreign pension plans ramping up their exposure to alternative assets and leveraging patient capital, it\u2019s worth paying attention to Indonesia\u2019s potential. \u201cIf you follow the...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17308"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=17308"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17308\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=17308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=17308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=17308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}