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Workers toil at the construction site of a new pier at New Priok container terminal in north Jakarta.   © Reuters

Indonesian watchdog looks to broaden the local bond market

Supply and demand could both use a boost

STEFANIA PALMA, The Banker Asia editor | Indonesia

One of the key objectives for Indonesia's financial supervisory authority is to expand the local bond market. Dominated by government bond paper, the local currency bond sector has yet to become a platform for strong corporate issuance. As of February 2017, corporate paper accounted for only 14% of Indonesian local currency bonds, while government bonds made up the remainder.

To help boost supply, the Otoritas Jasa Keuangan, or OJK, has reduced issuing costs by cutting the amount of documentation required by borrowers to come to market. As a result, the number of days needed to get a bond issuance off the ground has fallen from 45 to 35.

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