Indonesia woos domestic investors with 7.32 trillion rupiah of online retail savings bonds

SEPTEMBER 19, 2018 - 11:30 AM


THE Indonesian government sold 7.32 trillion rupiah (S$672.8 million) worth of bonds to local retail investors through an online offering, the finance ministry's financing and risk management office said late on Monday.

The issue is the highest for its series, the retail savings bonds, and nearly four times the size sold in the previous issuance, according to finance ministry data.

The bonds, maturing September 2020, were sold as part of efforts to reduce the portion of foreign ownership by reaching out to new domestic investors.

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Nearly 80 per cent of the 21,672 investors were new, with about 41 per cent of them aged 18 to 38 years, which the ministry categorised as "millennials".

These millennials were investing in government securities for the first time, buying as little as one million rupiah worth of bonds, the finance ministry said in a statement.

The government attached a floating rate to the bonds with a floor of 8.05 per cent.

The bonds, called SBR004, were the second retail savings bonds sold through online channels following its predecessor SBR003 and it was about 4.9 times oversubscribed compared to the preliminary target told by distribution partners.

Previously, Indonesia raised 1.93 trillion rupiah during the SBR003 issuance with a floating coupon rate flooring at 6.80 per cent.

Bank Indonesia (BI) deputy governor Dody Budi Waluyo said the central bank was focused on maintaining the rate differential against other economies to remain as an attractive investment destination. BI has increased its benchmark rate by 125 bps so far this year. REUTERS