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View all search resultsCorporate bonds may hit $2.46 billion this year
The country’s economic resilience has boosted the confidence of the private sector in raising funds through the bond market, with full-year corporate bond issuance predicted to reach about Rp 23
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T
he country’s economic resilience has boosted the confidence of the private sector in raising funds through the bond market, with full-year corporate bond issuance predicted to reach about Rp 23.21 trillion (US$2.46 billion).
The predicted figure is far higher than the initial target of Rp 15 trillion, according the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK).
Bapepam expressed their confidence last Friday, while the agency issued a new list of firms planning to issue bonds worth Rp 6.4 trillion within the next three months.
Bapepam’s head of division of financial inspection for companies in the service sector Noor Rahman said that the new list should justify the agency’s optimism. By September, 19 companies had issued bonds with a total value of Rp 16.81 trillion.
Among the companies included on the list are Bank Mandiri, the nation’s biggest lender, with Rp 3 trillion worth of bond issue and PT Indosat, the country’s second largest telecommunications firm, with Rp 1 trillion in conventional bonds plus Rp 500 billion in sharia bonds.
“The [bond] market is definitely improving,” Noor Rahman said, adding that the bond market was following the upbeat trend in the country’s stock market, thanks to relatively strong economic growth in 2009.
Bloomberg reported Friday Indonesia’s 10-year local currency bonds were yielding 9.92 percent, offering a premium of 6.72 percentage points over similar-maturity US Treasuries.
Rupiah-denominated notes have returned 20 percent this year, the best among 10 local-currency debt indexes compiled by HSBC Holdings Plc. The rupiah has strengthened 16 percent during 2009, the biggest advance in Asia, it said.
Indonesia is among a few countries that have managed to still post robust growth at a time when the world’s economy has been hit hard by the devastating global financial crisis that started late last year.
While many countries are experiencing contraction, Indonesia’s economy is estimated to have expanded by 4 to 4.5 percent this year.
Reflecting the increasing confidence of companies towards the capital market, four companies are set to offer their shares to the public, bringing the total firms entering the capital market this year to 11.
Those four are electricity power supplier PT Dian Swastatika Sentosa, steel producer PT Latinusa, palm oil producer PT BW Plantation and pipe stainless steel supplier PT Gunawan Dianjaya Steel.
