While competition has become increasingly fierce on the domestic bond market, two of Indonesia's state-controlled companies - but listed on the Indonesia Stock Exchange - are studying plans to sell rupiah-denominated corporate bonds on the global market (so-called nasi goreng bonds, a reference to the famous Indonesian fried rice dish). The two companies that are studying these plans are toll road developer and operator Jasa Marga and construction company Wijaya Karya.

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Few foreign investors invest in Indonesia's corporate bonds. Foreigners currently only hold seven percent of total outstanding corporate bonds in Indonesia. Salyadi Saputra, President Director of Pemeringkat Efek Indonesia (Pefindo), said this figure is too low. Ideally, it should be between 20 - 30 percent. Moreover, the percentage share of Indonesian corporate bonds that are in foreign hands has fallen over the past year. On 1 January 2016 foreigners still held 7.29 percent of total outstanding corporate bonds in Indonesia.

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The Indonesian rupiah has been appreciated significantly over the past two days versus the US dollar. By 12:00 noon local Jakarta time on Wednesday (07/12), Indonesia's currency had strengthened 0.29 percent to IDR 13,331 per US dollar (based on the Bloomberg Dollar Index). Meanwhile, Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) appreciated 0.51 percent to IDR 13,336 per US dollar today. Lets zoom in on this performance.

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The Finance Ministry of Indonesia is conducting a rupiah-denominated Government Debt Securities (SUN) auction on Tuesday (27/09). The auction opened at 10:00 am local Jakarta time and will close at 12:00 pm. The indicative target of the government is set at IDR 12 trillion (approx. USD $923 million), while the maximum target is set at IDR 18 trillion (approx. USD $1.4 billion). Proceeds are used to finance the Revised 2016 State Budget.

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Indonesian credit rating agency Pefindo (Pemeringkat Efek Indonesia) says the value of issued debt paper in Indonesia may reach IDR 90 trillion (approx. USD $6.8 billion), up 34 percent from the IDR 67 trillion worth of debt paper that was issued in Indonesia last year. Debt paper involves bonds, sukuk (Islamic bonds), and medium term notes. So far this year, Pefindo has been tasked to rate up to IDR 44.1 trillion worth of debt paper, while debt paper that has been issued up to May totaled IDR 25 trillion (approx. USD $1.9 billion).

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The Indonesian rupiah was under pressure on Tuesday (24/05). Based on the Bloomberg Dollar Index, the rupiah depreciated 0.47 percent to IDR 13,638 per US dollar, the weakest level since early February 2016. However, the Indonesian rupiah is not the only emerging market currency in Asia that was under pressure today. Meanwhile, Asia's emerging market stocks also declined. Negative market sentiments are caused by growing speculation about a sooner-than-expected interest rate hike in the USA as well as sliding oil prices.

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Stocks in Asia were mostly up on Tuesday (12/04) supported by the weaker Japanese yen (retreating after a seven-day rally again the US dollar) and rising commodity prices (with crude oil touching a 2016 high at USD $43 per barrel after the US dollar weakened). Indonesia's benchmark Jakarta Composite Index rose 0.89 percent to 4,829.57 points, while the rupiah appreciated 0.14 percent to IDR 13,115 per US dollar (Bloomberg Dollar Index). Several analysts claim that the positive performance of Indonesian assets was also due to the government's plan to cut the corporate income tax to 20 percent and raise the non-taxable personal income tax by 50 percent.

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The Indonesian government will offer rupiah-denominated government bonds (Surat Utang Negara or SUN) to investors between 10:00 and 12:00 am on Tuesday (29/03). The bond sale has an indicative target of IDR 12 trillion (approx. USD $909 million) but this target can be up-sized to IDR 18 trillion. Tomorrow's bond sale, proceeds of which are to be used to finance Indonesia's 2016 State Budget, involves four series (SPN12170302, FR0056, FR0073, and FR0072). The tender is open to both institutional investors and individual investors.

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Indonesia's Finance Ministry will sell rupiah-denominated Islamic bonds (known as Sukuk) on Tuesday (26/01). The ministry set an indicative target of IDR 4 trillion (approx. USD $288 million). Proceeds from the bond sale will be used to finance the government's budget deficit. This deficit is estimated to reach 2.15 percent of gross domestic product (GDP) in the 2016 State Budget.

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The Indonesian government will increase retail bond issuances in 2016. Robert Pakpahan, General Director of Debt Management at the Ministry of Finance, said the government will issue conventional retail bonds, known as ORI (Obligasi Negara Ritel Indonesia), twice in 2016. Furthermore, the government plans two rounds of sharia-compliant government retail bond (Sukuk Negara Ritel, or abbreviated Sukri) issuances next year. These bonds are only available to domestic investors.

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Apparently, yesterday's decline was only a small stumbling block for the Indonesia Stock Exchange (IHSG). Indonesia's main indicator rebounded strongly after feeling the effects of stronger American stock indices that were positively influenced by a rise in Housing Index and Consumer Confidence. Moreover, the IHSG accelerated its gain after Asian stock markets and the opening of Europe's stock indices were positive.

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