On Asian crisis 1998, the palm owner and businessman still could face the crisis smugly. The base price of crude palm oil (CPO) for one fresh stem of oil palm (tandan buah segar) was USD 600 per ton, but with the exchange rate of Rp 16.000 per 1 USD, the producers were quite blessed from the crisis condition. With the average area owneship was at minimum 2,5 hectare each farmers with the output of 2 tons per hectare crude palm oil, the farmers gained at least USD 12.000 (2,5 hectare x 2 tons x USD 600).

The reason was the demand of CPO was still high. Even in China, although it was in Asian region, its economic was growing. It happened also in India. In Europe, countries like Germany and Netherlands were consumers of crude palm oil originated from Indonesia and Malaysia. It was very much affected positively the farmers and the local economic.

A very different story came up on crisis on September 2008. The price of CPO declined and so was the demand. The producers were on the edge of the egg. A lot of TBS were left unharvested by the farmers because the price went down to Rp 300 per kg from Rp 1.200-1.400. Big players in Indonesia and Malaysia were oversupplied. The firms were to hold on their expansion or to hold the planting.

The crude palm oil was now a disaster. If before it was a green gold, now it was a dead card. Victims were tumbling down. Now, could the price shine again on the next year? A lot of people depended on bio fuel programs in most countries as an anchor price. It that was the case, the CPO price would be better. The problem was the oil price was on the bullish and made the bio fuel was more expensive than the fuel.

Now the case questions were what the producers should do? What government should do? What were the real threats on this business? How could we control the prices? How could we adjust with macroeconomics environment? If Indonesia had a comparative advantage for area of plantation, would it be still comparative advantage or became big liabilities? Why Indonesia did not start to develop the downstream crude palm oil industry?

It’s been 7 years since 2004, but Law proposition (Rancangan Undang-Undang) about Badan Penyelenggara Jaminan Sosial (BPJS) had not yet been completed. This bill was a mandate from UU No. 40/2004 about Sistem Jaminan Sosial Nasional (SJSN), ratified by (former) President Megawati Soekarnoputri. If the law proposition about BPJS was completed, this would become a holding institution that administered four state-owned insurances, which consisted of health insurances, safety insurances, pension insurances and life insurances.

This settlement was collided with oppositions based on the legal entity form of BPJS, whether these four BUMN insurances: PT Jamsostek, PT Asuransi Kesehatan Indonesia, PT Asuransi Sosial Angkatan Bersenjata Republik Indonesia and PT Dana Tabungan dan Asuransi Pegawai Negeri would be merged. In one hand, the constraint in terms of legislation was the unfinished harmonization of several regulations such as UU No. 3/1992 about Jamsostek and UU No. 11/1992 about Pension Fund. Pension Fund was still voluntary and not mandatory. Some laws were still overlapping and burdensome to employers. On the other hand, not all companies provided pension insurances for employees and solely relied on Jamsostek.

On October 2010, PT Jamsostek resisted the merger of four State-Owned Enterprise (BUMN) insurances into one Badan Penyelenggara Jaminan Sosial (BPJS). Four BUMN insurances had differences from characteristics of participants, programs, and most importantly was the difference in how each company covered risk exposures such as market risk and liquidity risk.

Since 2005, PT. Schroder Investment Management Indonesia was the biggest mutual funds investment company in Indonesia with a total fund of Rp 26 trillion. However, when the crisis happened in the end of 2008, the funds dropped to Rp 20 trillion. Less than a year later, in March 2009, two of Schroder products, Schroder Dana Prestasi Plus (equity mutual funds) and Schroder Dana Prestasi (mixed mutual funds) were chosen as the best mutual funds for category 3 years, 5 years and the latter for 7 years.

The company strived to manage funds to the amount of, Rp 26 trillion in 2005. Moreover, the company aimed to outperform the index, which also meant outperforming the benchmark performance.

Early in 2010, the Finance Director of PT Indosat Tbk, considered an empirical investigation of several theoretical pricing restrictions that should be satisfied by nine bonds of PT Indosat TbK. In particular, he wanted to investigate pricing volatility for bonds that were issued in 2002, 2003, 2005, 2007, 2008 and 2009.

Refinancing could be in dollar-denominated bonds, rupiah-denominated bonds, syaria-denominated bonds and bank loans. The market appreciated bonds issued by companies with AA+ Ratings. Comparing current macroeconomic circumstances to inflation and volatile interest rate, newly-issued bonds face challenges such as price, yield, and bond maturity period.

PT Bumi Resources TbK was the biggest coal producer in Indonesia and the biggest exporter coal thermal in the world (8% market share). The company has engaged to increase coal production capacity for the next 5 years and has obliged to refinance its financial liabilities during its dynamic investor relationship events on 2003-2007.

This case illustrates the company’s financing strategic using financing alternative like issuing bonds, stock price offering and banking loan.