According to data from Kustodian Sentral Efek Indonesia (KSEI), per February 2017 foreign investors held IDR 21.14 trillion (approx. USD $1.6 billion) worth of Indonesian corporate bonds, or 6.72 percent of the total outstanding IDR 314.77 trillion (approx. USD $24 billion). In order to encourage more foreigners to invest in Indonesian corporate bonds, Pefindo plans to raise efforts to introduce these bonds to foreign investors and inform them about the opportunities and risks.

So far in 2017 a total of 12 new bonds (including Islamic bonds, known as Sukuk) have been issued (by 11 companies) with a total value of IDR 20.73 trillion (based on data from the Indonesia Stock Exchange).

It is assumed that foreign investors are not very interested in Indonesian corporate bonds because the market is not liquid enough. Foreign investors tend to buy bonds in large quantities. However, when they want to sell the bonds on the secondary market before the due date, then there is not enough demand. Therefore, those foreign parties that do invest in Indonesian corporate bonds are primarily pension and insurance funds that tend to hold the corporate bonds until maturity.

With regard to coupon rates, there is no reason for foreigners not to be interested in Indonesian corporate bonds. Rayendra Tobing, Head of Investment Banking at Indo Premier Securities, says coupons offered by Indonesian companies are much more attractive compared to coupons in foreigners' home nations. Therefore, the key solution to boost foreign investors' demand for Indonesian corporate bonds is to raise liquidity in the secondary market.

In 2016 the total of corporate bonds that were traded on the secondary market in Indonesia was only 6 percent (or IDR 800 billion) of IDR 13.5 trillion worth of total transactions per day (data from the Indonesia Bond Pricing Agency, or IBPA). Wahyu Trenggono, Director at IBPA, said an electronic trading platform has already been introduced to encourage the trading of bonds in the secondary market. This platform aims to create a transparent and effective secondary bond market.

Lack of foreign interest for Indonesian corporate bonds is in stark contrast to the case of Indonesia's government bonds. Foreigners currently hold more than 37 percent of Indonesia's sovereign government bonds. This is in fact too high as foreigners tend to sell these bonds rapidly in times of global turmoil. Sudden and large capital outflows can jeopardize the country's financial stability.