Risk investing in Bond
- Credit/Default risk: Issuer can not pay its obligations (coupon and principlan value of bonds) on a predetermined date.
- Market risk: Potential losses due to the declining trend of bond prices in the secondary market due to rising interest rate (e.g. SBI rate). Loss (capital loss) can occur if the bonds were sold in the secondary market before maturity at prices lower than the purchase price.
- Liquidity risk: In market conditions are not conducive, bonds can not be sold at reasonable price (market) when investors need and want to sell their bond prior to maturity.
- Currency risk: Investor will be exposed to currency risk if the currency on the bonds is different from the base currency investors and investors may be exposed to losses as a result of currency movements.
- Risk of regulation changes: Any changes in regulations, including but not limited to the tax / accounting practices / etc, can affect the bonds return to be received by investor.
There are risks attached to fixed income investing. (Prospective) Investors need to read and understand the relevant fixed income term sheet before deciding to invest in a Fixed income. PT Bank ANZ Indonesia ("ANZ") in this reference acts as selling agent for Fixed income (Bonds). Fixed income (Bonds) is capital market product and are not products developed or managed by ANZ. ANZ offers no guarantee on performance or protection of capital invested; and Fixed income (Bonds) are not included in the guarantee program of the Government of the Republic of Indonesia or any other deposit guarantee.
ANZ is not guaranteed by Australia and New Zealand Banking Group Limited; ANZ is not a financial institution governed under Australia jurisdiction and it is registered in Indonesia as Limited Company; liabilities and other ANZ obligations is not obligation governed by Australia and New Zealand Banking Group Limited.
ANZ doesn't provide advisory service upon the decision making activity in investment. Therefore, customers are advised to consult with legal counsel, tax and your financial advisor before performing investment. This document shall not be considered as offer letter to sell, or an invitation to purchase fixed income product in any conditions.
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