The Ministry Of Finance Records An Entry Offer Of IDR 39.8 Trillion At The First SUN Auction In 2024

The Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance (Kemenkeu) noted that the total bids included in this year's inaugural SUN auction amounted to IDR 39.8 trillion and nominally won IDR 21.75 trillion.

Director of State Debt Letter DJPPR Deni Ridwan said that the total incoming bids at this year's inaugural auction amounted to Rp39.8 trillion, which was 1.59 times the previously announced indicative target.

The stable global financial market in line with expectations for the Fed Fund Rate cuts will begin in the first quarter of 2024.

"In addition, the solid performance of the 2023 State Budget with a deficit realization of 1.65 percent of Gross Domestic Product (GDP) and the maintained inflation rate in December 2023 will also be the positive catalyst for the inaugural SUN auction in 2024," said Deni Ridwan in an official statement quoted on Friday, January 5.

For information, at the inaugural SUN auction in 2024, the government set an indicative target of IDR 25 trillion to IDR 37.5 trillion.

In this auction, there are seven (7) SUN series offered, namely SPN03240404 (new issuance), SPN12250103 (new issuance), FR0101 (reopening), FR0100 (reopening), FR0098 (reopening), FR0097 (reopening), and FR0102 (new issuance).

Deni explained that the SUN tenor series 5 and 10 years became the series most attractive to investors at the inaugural SUN 2024 auction.

The number of bids and bids incoming bids (incoming) was won (awarded bids) each of 46.78 percent of the total income bids and 65.75 percent of the total awarded bids.

According to Deni, the interest of foreign investors in this year's inaugural SUN auction is also considered quite good with the amount of income bids of Rp7.37 trillion with the majority offering in the medium-long (5 and 10 years) SUN tenor series of Rp4.6 trillion or 62.9 percent of the total income bids of foreign investors and won Rp2.94 trillion or 13.5 percent of the total paid bids.

In addition, the relatively stable domestic SBN market condition earlier this year prompted a decline in the Weighted Average Yield (WAY) of state bonds won at today's SUN auction of 3 to 12 bps from the WAY level of state bonds won at the previous SUN auction.

Deni said that the government decided to win an offer of Rp. 21.75 trillion at the inaugural SUN auction by considering the reasonable SBN yield in the secondary market and the planned financing needs for 2024.

"In accordance with the calendar for issuance of Government Securities (SBN) in 2024, the auction for the issuance of SUN will then be held on January 16, 2024," he concluded.