Foreign Investment in Sovereign Bonds
Last week, foreign investors flocked to the sovereign’s net sell of IDR1.04 trillion. Yields of FR0078―sovereign bonds (SUN) benchmark with 10-year tenor—edged up 15.3 bps to 8.03%. Early last week, SUN was bullish due to investors’ exaggerating interest in its auction, yet it turned to bearish favor from Thursday to the end of trading session. January’s deficits of USD1.16 billion worsen than deficits of USD1.03 billion in December 2018 put a strain on SUN. Foreign investors currently plough their funds of IDR925.6 trillion into SUN. That amount accounted for 37.89% of the existing SUN.
At the auction of SUN dated 02/12/2019, the government secured funds of IDR25 trillion from the total inflow bid of IDR66.36 trillion. The amount secured outgrew the indicative target of IDR15 trillion. SUN with 5-year tenor, FR0077, got the biggest bid worth IDR22.88 trillion.
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