Foreign Investments in Government Bonds
Last week, foreign outflows of IDR1.44 trillion from sovereign bonds (SUN) curtailed the movement of SUN. Downward revisions to SUN aligned with downwards revisions to emerging economies’ sovereign bonds. The revisions were attributable to such negative external sentiments as the U.S. and North Korea tensions, triggered by re-construction of North Korea’s nuclear missile and the UE’s murky economic outlook, signaled by the cut of the UE’s economic growth from 1.7% to 1.1% by ECB. Those two negative sentiments caused investors to be more cautious about investing in emerging markets. Foreign investor held SUN at IDR944.56 trillion or 38.2% of the total existing SUN.
SBNS Auction
At the sharia sovereign bonds (SBNS) auction dated 03/05/2019, the government secured funds worth IDR8.9 trillion from the total incoming bid od IDR23.17 trillion. The amount absorbed was higher than the indicative target of IDR8 trillion. PBS014, SBNS with 2-year tenor, obtained the biggest bid worth IDR9.86 trillion.
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