JAKARTA (TheInsiderStories) – Indonesia Stock Exchange (IDX) noted at least 118 issuers have the potential to issue commercial bonds, the director told media on Wednesday (09/25). With the new policy from the central bank the numbers of the notes is expecting continue to grow.
As known, Bank Indonesia (BI) accelerated the issuance and transactions of commercial bond instruments as a source of non-banking short-term funding to boost the domestic demand and support the infrastructure of commercial bonds issuance and transactions.
To date, there are several regulations that have been issued to support it, including commercial paper rules and supporting institutions. There are three arrangers, two rating agencies, 46 legal consultants, 84 public accountants, five notaries, four brokers, 15 custodians has been registered. While, Indonesia Central Securities Depository prepared the infrastructure of the notes.
IDX director Laksono Widodo believed with the new regulation, there are 118 issuers that possible to issue the commercial bonds. He said, the companies allowed to issue the commercial bonds are the issuer that have issued bonds or SUKUK at the IDX in the last five years.
If private company aimed to issue the commercial paper, he continued, must operate for a minimum of three years and have a equity at least Rp50 billion, and generate net profit in the past year.
Laksono explained, the commercial bonds issuance permits tend to be fast, less than 10 days. In addition, the company allowed allowed to use an existing rating.
Yesterday, in a meeting with issuers at IDX, BI senior deputy governor Destry Damayanti hoped that investors in the market will understand more about commercial bonds and are encouraged to issue the instrument.
Going forward, she said, the central bank will continue to coordinate with relevant authorities and market participants, and educate potential issuers to encourage the development of the commercial paper market.
At the same time, deputy at the state own enterprises (SOEs) ministry Aloysius Kiik Ro recommended commercial bonds as one of SOE’ external funding sources. Every year, he added, 115 SOEs need funds around Rp400 trillion (US$28.37 billion) for the capital expenditure. The external funds portion is 70 percent or around Rp300 trillion that possible to be met by commercial bonds.
Indonesian government and SOEs has the potential to issue bonds around Rp100 trillion in the second quarter of 2019. Most of the amount will be in government bond while six SOEs has reported to IDX to release obligation around Rp13 trillion.
The six issuers are PT PP Tbk (IDX: PTPP) Rp1.5 trillion, PT Semen Indonesia Tbk (IDX: SMGR) Rp4.9 trillion, PT Waskita Karya Tbk (IDX: WSKT) Rp1.84 trillion, PT Adhi Karya Tbk (IDX: ADHI) Rp2 trillion, PT Waskita Beton Precast Tbk (IDX: WSPB) Rp500 billion, and PT Kimia Farma Tbk (IDX: KAEF) Rp1.5 trillion.
While, the central government estimated will issue a total gross government bond of 50-60 percent throughout the first semester of 2019, which includes retail government bond, foreign exchange government bond, and regular government bond instruments. The total issuance value is around Rp128 trillion.
Finance Ministry recorded the realization of the net government bonds issuance in the first quarter of 2019 reached Rp185 trillion, and SUKUK issuance reached Rp81.44 trillion so total will be Rp266.44 trillion.
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