In early May, President Prabowo Subianto summoned a handful of his most trusted advisers to his house in south Jakarta to discuss how to find more revenue as surging oil prices stretched Indonesia’s finances. The small group eventually agreed on a sweeping change that would fundamentally upend one of the most important sectors in the resource-rich Southeast Asian economy: The creation of a new sta...
In early May, President Prabowo Subianto summoned a handful of his most trusted advisers to his house in south Jakarta to discuss how to find more revenue as surging oil prices stretched Indonesia’s finances. The small group eventually agreed on a sweeping change that would fundamentally upend one of the most important sectors in the resource-rich Southeast Asian economy: The creation of a new state entity under sovereign wealth fund Danantara to oversee Indonesia’s world-leading exports of palm oil, coal and ferro-alloys, which together amounted to more than $65 billion last year. Prabowo had long railed against Indonesia’s tycoons, accusing them of harnessing national wealth for personal gain. He believed drastic action was needed to plug leakages that cost Indonesia billions of dollars a year, according to people familiar with the inner workings of the president’s office. They requested anonymity to speak about private discussions, along with about a dozen others in government and industry circles who contributed to this account. The full extent of the plan was kept under wraps for weeks, held so closely that even top officials at Danantara were in the dark as rumors of the overhaul began spreading on Tuesday throughout the capital, prompting the benchmark stock index to plummet. Danantara executives including CEO Rosan Roeslani urgently sought clarification from Prabowo’s inner circle, which finally came later that day. Upon finding out, Danantara chief investment officer Pandu Sjahrir immediately started calling industry executives, asking them how it was possible for the one-year-old agency to implement such a brazen strategy. One insider simply replied: “Unworkable.” Panic also spread through some of Indonesia’s biggest companies. Employees at one of the nation’s top coal firms frantically texted contacts in Prabowo’s government to get confirmation, but received no response. Even on Wednesday, as the president prepared to address parliament, some in the resou...
Income investors who bought the iShares Preferred and Income Securities ETF (NASDAQ:PFF) for its distribution yield near 6.5% are sitting on a structural feature most never modeled: roughly 60% to 70% of PFF’s portfolio comes from U.S. banks and insurers, and almost all carry call provisions. PFF works fine when rates rise. The problem surfaces ... PFF’s $14 Billion Preferred Stock Strategy Holds ...
Income investors who bought the iShares Preferred and Income Securities ETF (NASDAQ:PFF) for its distribution yield near 6.5% are sitting on a structural feature most never modeled: roughly 60% to 70% of PFF’s portfolio comes from U.S. banks and insurers, and almost all carry call provisions. PFF works fine when rates rise. The problem surfaces ... PFF’s $14 Billion Preferred Stock Strategy Holds 60 Percent Bank Issued Preferreds With Call Provisions That Cap Your Upside
Carlyle Global Research and Investment Strategy Head Jason Thomas expects the Bank of Japan to hike interest rates in June this year. He speaks with Haidi Stroud-Watts and Shery Ahn on "Bloomberg: The Asia Trade." (Source: Bloomberg)
Carlyle Global Research and Investment Strategy Head Jason Thomas expects the Bank of Japan to hike interest rates in June this year. He speaks with Haidi Stroud-Watts and Shery Ahn on "Bloomberg: The Asia Trade." (Source: Bloomberg)