Indonesia's dollar bonds yield the highest in Asia

An improving economy in Indo nesia is driving gains in dollar-denominated corporate bonds.Returns on Indonesia's dollar-denominated corporate bonds are the highest in Asia this year amid a more stable rupiah, easing inflationary pressures, an improving fiscal situation and prospects of better economic growth.

A major contributor to those returns has been the coal industry in Indonesia, said Pheona Tsang, head of fixed income at BEA Union Investment Management in Hong Kong. BEA will keep its overweight position in Indonesian corporates, she said.

The government is building on the positive sentiment to explore new funding options, such as overseas rupiah-denominated bonds.