New bond listings to decline by 40%
New bond listings to decline by 40%
The Jakarta Post, Jakarta
The Surabaya Stock Exchange (SSX) expects new bond listings by
the corporate sector to decline by 40 percent this year on
political and security concerns arising from the general and
presidential elections.
SSX director T. Guntur Pasaribu said that new corporate bond
issues would only reach around Rp 15 trillion (US$1.64 billion)
this year, down from Rp 25 trillion last year, as firms had
decided to put off their issues until after the election season
was over.
"There has been a decline in business confidence this year as
indicated by the fall in the number of bond issues. But we expect
bond issues by companies next year will boom again next year,
like in 2003," said Guntur in a telephone interview on Thursday.
Indonesia, South East Asia's largest economy, held its
legislative elections on April 5 and the first round of the
presidential election on July 5. The country is scheduled to hold
the presidential election runoff on Sept. 20, with the incumbent,
President Megawati Soekarnoputri, squaring up against her former
security minister, Susilo Bambang Yudhoyono.
Guntur said that between January and July of this year, bond
issues by companies had amounted to around Rp 12.1 trillion, with
several high profile companies expected to issue some Rp 3
trillion in bonds by the end of this year.
The companies include food companies PT Indofood Sukses Makmur
and PT Suba Indah, cigarette producer PT HM Sampoerna, financial
services firms PT Federal International Finance and PT Adira
Multifinance, and house builder PT Pembangunan Perumahan.
The companies will be touting their first-half financial
performances as the basis for the appraisal of their bond issues.
Guntur said the market capitalization of corporate bonds
listed on the bourse totaled Rp 54 trillion, with an average
daily transaction volume of Rp 65 billion.
Government bonds still dominated the market with total
capitalization of Rp 390 trillion and average daily transaction
volumes of Rp 2 trillion, he said.
In order to boost market capitalization and daily transaction
volumes, the SSX plans to intensify promote investment in bonds
to retail investors starting in the second semester of this year.
A number of securities firms, including Trimegah Securities
and Danareksa Securities, are offering such products to
individual investor for a minimum investment of Rp 25 million.