JAKARTA.The domestic obligation market will be facing internal and external challenges. However, the bonds remain prospective, thanks to the increase in demands from non-banking financial industry (IKNB), as well as the tax amnesty funds inflow.
The performance of bonds during 2016 has been satisfying. According to the data of Indonesia Bond Pricing Agency (IBPA), as of 23 December 2016, Indonesia Composite Bond Index (ICBI) grew by 13,86% to the level of 208.67 on year to date (ytd) basis.
During that period, the government and corporate bonds booked the total returns of 14.07% and 12.59%, respectively.
The bonds investment also will remain prospective in 2017. The government is planning to release a worth of Rp 596.8 trillion gross government securities (SBN) in 2017. The target is slightly lower than this year’s target of Rp 611.40 trillion.
The issuance of corporate bonds is likely to book record in 2017. As information, according to data from Indonesian Central Securities Depository (KSEI) as per 20 December, the issuance of corporate bonds has reached the value of Rp 122. 43 trillion, the highest record ever.
The Indonesian Securities Rating Agency (PEFINDO) predicts that the corporate bonds issuance in 2017 will reach the value of Rp 119.6 trillion. The corporations will release new bonds to refinance the worth of Rp 79 trillion corporate bonds, which will mature in an immediate time.
Despite of the massive bonds issuance, President Director of PEFINDO Salyadi Saputra is optimistic that the market will be able to absorb the massive supplies. The demands will be driven by the tax amnesty funds inflow, as well as the minimum obligation of non-banking financial industry investment on government bonds.
The analyst at Pasar Dana Beben Feri Wibowo estimates that the demands on bonds will remain stable in 2017, thanks to the coupon rate that is more attractive than other instruments, such as deposits.
According to Beben, the domestic fundamental conditions will improve. The tax amnesty program, which will be run until March 2017 will be the positive sentiment for the economic fundamentals. This program will drive the repatriation funds inflow to Indonesia.
