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he Indonesia Bond Pricing Agency (IBPA), along with the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX), launched Friday local benchmark bond indexes Indonesia Bond Indexes (INDOBeX), expected to shore up activities in the local bond market as investors would benefit from more accessible data on prices and performance.

INDOBeX has three indices '€” the composite index, government bonds index and corporate bonds index '€” which offer objective, credible and reliable references for investors on debt paper pricing and performance, according to the agency.

'€œA reference for performance and returns will encourage more investment in the Indonesian bond market, just like the Jakarta Composite Index [JCI]. Overall, the domestic bond market grows 11-12 percent each year,'€ IBPA president director Ignatius Girendrohero said during the launch event.

Government bond transactions reach around Rp 8 trillion (US$658 million) to Rp 10 trillion per day, while corporate bonds reach between Rp 300 billion and Rp 500 billion, according to data mentioned by Ignatius.

The INDOBeX Composite Index would include 54 government and 256 corporate bonds.

The agency would announce each day'€™s trading during closing at 5 p.m., he said.

As of Nov. 20, the INDOBeX Composite Index recorded 306 series of bonds, including 55 issued by the government and 251 by corporations, with a total market capitalization of Rp 1,186 trillion.

Finance Minister Bambang Brodjonegoro said the bond indices played an important role in increasing the liquidity of the bond market as they would provide a performance reference for investors.

'€œThe indexes will provide information on market movement and also increase the credibility of the market itself,'€ he said.

The INDOBeX Composite Index recorded 11.59 percent growth on total return so far this year, with a 74.36 percent increase since it first started operation on Aug. 10, 2009.

The two other indices, INDOBeX Government and INDOBeX Corporate, are the break downs of the Composite Index. Each will have data consisting total return, clean price, gross price, effective yield and gross yield index.

INDOBeX Government and INDOBeX Corporate saw increases of 11.93 percent so far this year and 9.73 percent in total return, according to the agency'€™s data.

OJK chairman Muliaman Hadad said the new bond indexes were part of OJK'€™s market deepening programs for the local debt paper market, which would have a bigger role in financing the country'€™s economy.

'€œNowadays, bonds and sukuk [Islamic bonds] are becoming more attractive options compared to foreign debt with its difficult requirements and limited bank loans due to tight liquidity,'€ he explained.

Muliaman added that the new indices would attract domestic and global investors, boosting transactions and demand in the bonds market.

The government has issued Rp 464.6 trillion in bonds this year, a 64 percent surge from Rp 282.2 trillion at the end of last year, according to data from the Finance Ministry'€™s director general for debt management. Foreigners owned 37.4 percent of government bonds as of Nov. 14.

Uriep Budhi Prasetyo, director of market surveillance and compliance at the IDX, expected the new indexes to help boost issuances in the local bond market, especially corporate bonds.

So far this year, Rp 35 trillion in bonds has been issued by private companies, compared to a total of Rp 50 trillion issued throughout last year.