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.

As Gunawan Taslim, Director of PT Central Protein Prima, flew from Jakarta to Lampung in June 2009, he thought about the decision he must soon make on CP Prima’s strategic action to some problems from declining orders affected by global crisis, rejection from US Custom for their 37 containers contained frozen shrimp product,  accusation from Shrimp Club Indonesia (SCI) that the company would re-sell the rejected product into domestic market while the frozen shrimp product should be exported to overseas market, to a failure of shrimp harvest caused by virus disease. He was due to attend a meeting with Board of Commissioners in early July 2009. Gunawan thought, “The good news is the sales increased almost 39% in the last September comparing to last year. The bad news is we still can not find the market to re-sell our rejected 37 containers from US Custom.”

This was a critical decision for Gunawan and CP Prima. An increasing leverage and rupiah depreciation caused by global crisis would affect cash flow position. The declining cash flow position could lead a default on debt covenant. The default could lead a declining rating on CP Prima obligation position.