Three Years of Jokowi-JK, Bond Index Continues to Rise

The domestic bond market showed positive growth throughout the three years of President Joko Widodo and Vice President Jusuf Kalla's administration. This is evident from the growth of the Indonesia Composite Bond Index (ICBI), which consistently recorded growth from 2015 to 2017. Economic growth of around 5 percent, a stable rupiah exchange rate, controlled inflation, and still-attractive yields supported the Indonesian debt market.

On Thursday (September 19th), the ICBI stood at 236.144, up 0.01 percent from the previous day's close. As a result, the composite bond index rose 13.29 percent throughout 2017. This achievement surpassed the Jakarta Composite Index (JCI) of the Indonesia Stock Exchange, which only recorded an increase of 11.59 percent from its year-end position. Meanwhile, the rupiah exchange rate weakened by 0.36 percent.

The upgrade of Indonesia's sovereign debt rating by the international rating agency S&P Global to investment grade can increase the confidence of foreign investors to continue investing in the Indonesian financial market. For information, in 2015, the ICBI only rose 4.2 percent and in 2016 it strengthened by 13.73 percent. Then, year-to-date (until October 19, 2017), it has risen by more than 13 percent.