Photo: Finance Ministry

JAKARTA (TheInsiderStories)—Indonesia’s retail bonds received a strong Rp1.928 trillion, almost double the Rp1 trillion target.

The Finance Ministry Financing and Risk Management Director General Luky Alfirman on Monday (28/05) said the strong demand shows the government is successful in attracting new investors. Indonesian government offered the retail bonds from May 14 to May 2018 May, targeting millennials.

The investors who signed up to get single investor identification (SID) from Kustodian Sentral Efek Indonesia (KSEI) reached 10,688 investors. However, those who paid or completed investors reached 7,642 investors.

In detail, 62% of investors are subscribers with a value below Rp 100 million. While the remaining 38%, is an investor with orders of more than Rp 100 million.

The investors dominated by housewives and young people. The majority of investors or 36.72 per cent came from the age group of 25 to 40 years. Meanwhile, the largest booking by regions came from capitol Jakarta of 42.21 per cent.

Samurai Bonds

In addition, Indonesian government also issued Japanese yen-dominated ‘Samurai’ bonds of 100 billion yen.

The government issues a new series of 10-year tenor Samurai bonds for the first time without warranty of Japan Bank for International Corporation (JBIC).

According to the data issued by the Ministry of Finance, the government issues a 3-year Samurai bonds of 49 billion Japanese yen with 0.67 per cent yield, a 5-year bonds of 39 billion Japanese yen with 0.92 per cent yield, a 7-year bonds of 3.5 billion Japanese yen with 1.07 per cent yield, and a-10 year bonds of 8.5 billion Japanese yen with 1.27 per cent yield.

Joint lead arrangers in this transaction are Daiwa Securities Co. Ltd., Mizuho Securities Co., Ltd., Nomura Securities Co., Ltd, and SMBC Nikko Securities Inc.

Previously, the government bonds always below the target. The five government bonds offer this year only reached Rp7.17 trillion from the target of Rp17 trillion.

The government needs to issue bonds as Indonesia’s state budget already deficit by Rp85.8 trillion or 0.58 per cent of gross domestic product in the first quarter of 2018. The government set a deficit of 2.19 per cent in 2018 state budget or Rp325.9 trillion.