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Indonesia introduces debt market benchmark indexes

[JAKARTA] Indonesia's debt market regulator on Friday launched three sets of indexes on local government and corporate bonds which it said would provide investors a reference for pricing and performance.

The INDOBEX Composite index will include 54 government bonds and 256 corporate bonds, the Indonesian Bond Pricing Agency (IBPA), the agency that is creating and managing the indexes, said.

Besides that, there are two other indices - the INDOBEX Government and INDOBEX Corporate. Each index will then have a total return, clean price, gross price, effective yield and gross yield index. "The bond indexes have an important role in increasing the liquidity of the bond market, to provide a performance reference for investors, information of market movement and it would also increase the credibility of the market itself," Finance Minister Bambang Brodjonegoro said at the launch of the indexes.

A reference for performance and returns will encourage more investors to invest in the Indonesian bond market, which see about 10 trillion rupiah (US$822.03 million) of transactions per day in government bonds and about 500 billion rupiah per day in corporate bonds, IBPA president director Ignatius Girendroheru said.