We were founded as a state owned enterprise with the mission of empowering small scale businesses through the provision of financing and the development of an established presence in all of Indonesia’s provinces. Upon developing an extensive network in the country and coinciding with the revival of Indonesia’s capital markets in the 1990s; Bahana expanded into other financial services by establishing our investment banking and securities trading subsidiary company, Bahana Securities, in 1993. In the following years, we also entered the property management industry and carried out joint ventures with partners in the US to offer asset management services.

Our positioning is unique in the sense that we have a multi-faceted role to play in Indonesia’s financial sector. It is our goal to encourage the growth of Indonesia’s capital market and forge close ties to local businesses while at the same time developing into an international standard commercial company that delivers profit to its shareholders. Our approach to the market has thus been an active one; focused on being a pioneer and introducing new products as well as providing assistance to regulators. We created Indonesia’s first mutual fund and the first private equity fund for the domestic market and are committed to improving upon Indonesia’s financial market infrastructure so as to provide investors with the instruments and environment to succeed. Our company also plans to further its intermediary role between foreign investors and local business by acting as the bridge between parties interested in investing in Indonesia and local companies well positioned to make the most out of foreign involvement.

In Indonesia, most large corporations are very product oriented and as such, brand positioning here often revolves around emphasising product strengths and features. Bahana, as a service oriented business, is one of the rare companies whose main asset is their people and we have thus looked to implement a branding strategy that centres on demonstrating the skills, ethics and quality of our human resources. It has not been easy to carry out this plan, as the market has yet to fully embrace the importance of one of our key strengths: corporate culture.

Current trends in Indonesia’s economy such as the deterioration of the deficit can distract people from the market’s positive long term outlook. 

With that said, much depends upon the government’s course of action in dealing with the present issues; investors, for example, will avoid investment if they expect to incur losses brought about by a weakening currency and Indonesia must manage the situation accordingly through its foreign reserves and fiscal policy.

I expect that the recent high volatility and uncertainty will soon be followed by a period of increased stability, which should result in improvements in risk premiums. This in and of itself will have a positive impact on the state of the capital market. The sectors to watch are therefore those most negatively affected by highly volatile conditions that are interest rate sensitive, such as property and construction, as they should soon reflect the effects of lower risk premiums on the market. Other sectors that will continue to play an integral role in driving the economy include banking, which will remain among the most profitable industries in Indonesia and is indicative of growing domestic demand and consumption.

We have considerable experience in working with foreign partners, having established Bahana TCW as a joint venture with an L.A. based fund management firm. Our company has also partnered with Japanese financial holding company Daiwa Securities Group to cooperate in distributing Indonesian research reports and to provide corporate access services to global institutional investors. Working with experienced foreign businesses is central to our approach to entering new markets, particularly in Asia, in that we have placed an emphasis on forming a solid network within target markets and actively avoid situations in which our entry is viewed as an overt threat to existing companies.

In regards to potential cooperation with companies looking to enter Indonesia, we expect to see interest from China, Japan and South Korea. This is in keeping with our projection that inter-Asia investment will play an even larger role in today’s economy. Bahana’s significant experience in Indonesia’s financial sector as well as its strong relationship with the government as a market-oriented SOE make it well suited to working with incoming foreign parties to introduce new products such as retail financial services prevalent in developed markets but not readily available here.

Global Business Guide Indonesia’s international audience should remember our company as a leading investment bridge to Indonesia, readily positioned to drive growth in the country’s promising capital market.