Off the beaten path in Indonesia
A research trip takes emerging markets equity analyst Chapman Taylor to places beyond the big city.
When emerging markets equity analyst Chapman Taylor plans a research trip to Indonesia, he is naturally inclined to venture off the beaten path. "In most emerging markets," he explains, "the capital city may represent the dominant economic force but only 10 to 30% of the population base. To truly understand a developing country, it’s imperative to travel outside of the capital."
"In Indonesia, I happened upon a place called Sragen, where the local leader or Bupati was held in high regard for his insightfulness, management skills and lack of corruption. For several years, I went there to see what kind of change was happening on a local level."
Many emerging markets are experiencing tremendous growth, but investors are often concerned about political and economic instability. For many years, Indonesia struggled with corruption and corporate governance problems. Chapman was intrigued by the country’s potential, but knew that traditional behind-the-desk research wouldn’t be a sufficient way to gauge the risks. Over recent years, his local visits led him to conclude that things were changing in Indonesia. "It wasn’t just a policy issue — there was bottom-up change as well," he explains. "That led to my conviction about Indonesian companies as opportunities for investors."
Chapman stays in touch with the Bupati by visiting Sragen every other year, but he has expanded his research to areas outside of Jakarta as well.