Amid global uncertainty and stock market volatility, the Indonesian bond market recorded positive performance throughout the first quarter of 2025, with the support of high investor interest in low-risk instruments and the potential for interest rate cuts until the end of the year. 

Credit rating agency PT Pemeringkat Efek Indonesia (Pefindo) reported that the value of corporate bond issuance grew significantly by 77.4 percent compared to the same period last year. Throughout January–March 2025, the issuance value was recorded at Rp46.75 trillion (US$2,92 billion).

"We project total corporate debt issuance this year to be in the range of Rp139.29 trillion (US$ 8,69 billion) to Rp155.43 trillion (US$ 9,69 billion), with a midpoint of Rp143.91 trillion (US$ 8,94 billion),” Head of Pefindo's Economic Research Division, Suhindarto, told a press conference on Tuesday, April 15, 2025.

Not only the corporate sector, government debt issuance has also increased. The government has issued net Government Securities (SBN) worth Rp282.6 trillion (US$17,63 billion) much higher than the first quarter of 2024, which was only Rp104 trillion (US$6.2 billion). Meanwhile, the Indonesian Central Bank (BI) issued Bank Indonesia Rupiah Securities (SRBI) of Rp150 trillion (US$ 9.3 billion).

From the foreign side, demand for SBN and SRBI is still high. Until April 10, 2025, foreign investors were recorded as making net purchases of SBN of Rp13 trillion and purchases of SRBI of Rp7.12 trillion. This condition is in contrast to the stock market which recorded net foreign sales of Rp32.5 trillion.

"Bonds are still an attractive instrument, especially due to the high volatility of the stock market. Investors are looking for safer instruments, and government bonds are the main choice," Suhindarto said.

Bond yields also support investor interest. The yield on 10-year government bonds was recorded at around 7.03 percent, while the projection of future SBN yields is expected to decline.

"The first semester will be in the range of 6.9-7.1 percent, and the second semester could drop to 6.6-6.9 percent," he cited.

However, Capital Market Observer Yanuar Rizky warned that increasing global uncertainty, including the tariff issue raised by U.S. President Donald Trump, will cause global and domestic investors to shift funds to hedging instruments.

"Precautionary and speculative motives have increased, causing money for consumption and real investment to decline. This can be seen from the increase in the average return of hedge funds from 5.7 percent in 2023 to 10.7 percent in 2024, with some even reaching more than 50 percent," Yanuar spoke to Indonesia Business Post on Tuesday, April 15, 2025.

Yanuar added that since November 2024 there has been an average sell down on the Asian stock exchange, including Indonesia, which has also weakened the Rupiah's position even though profit taking is still ongoing.

This condition shows that although the bond market is relatively stable and promising, vigilance is still needed against external pressures and the dynamics of the global economy that continue to move.