Government Records Capai Entrance Offers Of IDR 47.11 Trillion At SUN Auction

JAKARTA - The government recorded an incoming offer at the State Securities (SUN) auction which was held on Tuesday, May 28 amounting to Rp47.11 trillion with a nominal victory of Rp22 trillion.

Director of State Securities of the Directorate General of PPR at the Ministry of Finance Deni Ridwan said investors tend to wait and see after the release of FOMC minutes last weekend, which showed the Fed's higher for longer policy on the Fed Fund Rate. In addition, the global situation is still overshadowed by geopolitical tensions that tend to increase in the middle east and the Russia-Ukraine war that has not subsided.

However, Deni conveyed that investor interest in today's auction was still quite high influenced by the domestic economy which was quite positive and the performance of the state budget until April was still solid with a surplus of IDR 75.7 trillion or 0.33 percent of GDP.

"The number of offers for the SUN auction today is IDR 47.11 trillion or 2.14 times the indicative target that was previously announced," he explained in his official statement, Tuesday, May 28.

Deni said the government again offered the Bond Sustainable Development Goals (SDGs) series, FRSDG001, at today's SUN auction and received a positive response from investors with an incoming bid of IDR 1.63 trillion or 3.46 percent of the total incoming bids.

Meanwhile, the total incoming bids for foreign investors at today's SUN auction increased slightly to Rp6.92 trillion from Rp6.38 trillion in the previous auction.

Deni said the majority of the incoming bids were in the medium-tensor SUN (5 years) series of Rp3.22 trillion or 46.47 percent of the total incoming bids of foreign investors and won Rp2.17 trillion or 9.85 percent of the total offered received bids.

According to Deni, investor interest is still dominant in the 5 and 10 year SUN tenors series with 61.16 percent of the total incoming bids and 74.32 percent of the total awarded bids.

"The largest incoming bids is in the 5-year tenor, which is Rp. 14.73 trillion or 31.27 percent of the total incoming bids and won Rp. 6.95 trillion or 31.59 percent of the total awarded bids," he explained.

Deni conveyed that along with investor interest in the high SBN market and relatively stable SBN market conditions, the Weighted Average Yield (WAY) of state bonds won at today's SUN auction fell by 4 bps to 11 bps when compared to the previous SUN auction WAY level.

According to Deni, taking into account the reasonable SBN yield in the secondary market, plans for financing needs in 2024, and the current state cash condition, the Government decided to win an offer of IDR 22 trillion at today's SUN auction.

"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 June 11, 2024," he said.