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The volume of corporate bonds issued this year is likely to rise as the economy recovers and the interest-rate cycle bottoms out, analysts said.

However, as corporations and the government rush to issue debt, the opportunity to borrow at low rates will become increasingly limited.

Francis Indarto, senior vice president at PT Bank Permata, said last week that the lender had expected corporate bond issues to reach Rp 25 trillion to Rp 30 trillion ($2.67 billion to $3.24 billion), but was now expecting the total to exceed that.

“The demand side is supportive for bond issuance since liquidity conditions both globally and domestically are also very good,” he said. “Declining deposit rates will also shift investors to higher-return portfolios, including bonds.”

Two finance companies, PT Astra Sedaya Finance and PT BCA Finance, have already issued Rp 2 trillion in bonds this year, and more companies have announced their intention to follow suit. PT Bank Mandiri said it would issue $300 million of bonds, PT Bank Negara Indonesia $300 million to $400 million and PT Bank CIMB Niaga $100 million. Meanwhile, state electricity utility PT Perusahaan Listrik Negara has announced plans to raise $2 billion.

Octavianus Bramantya, an an alyst at PT Trimegah Securities, said the best time for companies to issue bonds would be the first half of the year, while inflation remains subdued and before interest rates rise. The market would be more crowded in the second half as increased government issues give corporations less control over the price, he said.

The government has said it planned to raise Rp 225 trillion through bond issues this year, including Rp 175 trillion of rupiah bonds, to cover its budget deficit.

Francis said timing would be key for corporations looking to raise funds.

“If they manage to get cheaper prices but they cannot use the funds raised fairly soon then there will be idle money. But if they issue during the peak the interest rate will be high,” he said.

He said companies would consider issuing dollar bonds as the rupiah strengthens further because the rate would be lower, but cautioned them to have dollar income to reduce risk.

Several surveys have indicated that business sentiment is improving. A Bank Indonesia survey of 2,400 companies nationwide found that 24 percent of respondents plan to investment in their businesses in the first quarter, up from 21 percent at the same time last year.