Investors are again interested in long tenor Government Securities (SBN), which still offer yields of between 6% and 7%. This demand was accompanied by the switching action of short tenor SBN which offered relatively less attractive yields of between 3% and 5%. This action also indicates the optimism of market players in seeing the long-term prospects for the Indonesian economy. Investors do not mind saving their investment funds in long-term government bonds. Meanwhile, positive external sentiment comes from expectations of economic recovery in the UK and the US, giving Indonesia’s exports opportunities to improve.
Issuer Sinarmas Releases IDR 3.55 Trillion Bonds. Sinarmas Group’s paper issuer, Indah Kiat Pulp & Paper Tbk (INKP) listed bonds with an issuance of IDR 3.55 trillion on the Indonesia Stock Exchange, Monday, December 14, 2020. The Company issued three Series III Sustainable Bonds I Indah Kiat Pulp & Paper Phase III Year 2020. Series A worth IDR 504.63 billion with an 8.5% coupon with a 370-day tenor. Series B with a value of IDR 2.46 trillion with 10% interest per year and a 3-year tenor. As well as series C with an issued value of IDR 582.71 billion with an interest offered of 11% per year with a 5-year tenor. (CNBC Indonesia)
Ministry of Finance Opens Opportunities for Debt Prefunding at the End of the Year. The Ministry of Finance opens up opportunities to attract debt at the end of the year in order to meet the needs for APBN implementation spending in early 2021 or what is called pre funding. To decide whether pre funding is or not, the government still has to monitor the implementation of the 2020 State Budget which is still left in the next two weeks. The government can pre-fund this by issuing domestic SBNs in the fourth week of December. Meanwhile, the pre funding option can be carried out by considering the factors of favorable market conditions. Even so, currently the government’s cash position is deemed sufficient to cover needs at the beginning of next year. (Investor Daily)
High Liquidity Presses the Lowest Yield Since 2018. Reduced economic activity during the Covid-19 pandemic, increased liquidity globally. This has made the central banks of most developed countries aggressively invest in bonds which are considered safer. Apart from the US, the European Central Bank, Japan, Canada and a number of other countries also did the same, and also Bank Indonesia (BI). Previously, foreign investors actively bought SBN, followed by the banking sector and BI. In the short term, investors can look back at the FR0080, FR0083, FR0086, and FR0087.