Three firms to issue bonds soon: SSX

Rendi A. Witular, Jakarta

The Surabaya Stock Exchange (SSX) said three new companies had made plans to issue bonds, probably this month, to finance their operations, an official said.

SSX president Hindarmojo Hinuri said the three companies were Bank Bumiputera, PT Perusahaan Listrik Negara (PLN) and PT Indorent, a subsidiary of automotive company PT Indomobil Sukses Internasional.

"The three companies have applied with us for their bond listing on the SSX. The bonds will be issued this year over concern that interest rates will be higher next year, burdening their financial accounts," said Hindarmojo during a ceremony on the Jakarta Stock Exchange on Wednesday.

According to Hindarmojo, publicly listed Bank Bumiputera planned to issue some Rp 500 billion (US$55 million) worth of bonds, PLN about Rp 1.5 trillion and Indorent around Rp 300 billion.

SSX expects new bond listings by the corporate sector to decline by 20 percent this year on political and security concerns in the first semester of this year, arising from the general and presidential elections, which have turned out to be peaceful.

Hindarmojo said new corporate bond issues would only reach around Rp 20 trillion 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.

Between January and September this year, bond issues by companies have amounted to around Rp 13 trillion, with several high profile companies expected to issue some Rp 7 trillion in bonds by the end of this year.

Market capitalization of corporate bonds listed on the SSX totaled Rp 56 trillion, with an average daily transaction volume of Rp 65 billion.

Government bonds still dominate the market with total capitalization of Rp 390 trillion and average daily transaction volumes of Rp 2 trillion.