The Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance noted that the total incoming bids at the auction of Government Securities (SUN) on Tuesday, March 26, 2024 reached Rp32.34 trillion. Meanwhile, the nominal won (advised bids) at this SUN auction amounted to Rp22.6 trillion.
Director of State Debt Letter DJPPR Deni Ridwan said the auction results this time were quite good amid the increasing need for cash by the public ahead of Eid al-Fitr. Although, these results are lower than the previous auction which reached IDR 58.94 trillion, this figure is still 1.35 times higher than the indicative target that has been announced at IDR 24 trillion.
"At this auction, the incoming bids from banks decreased, in anticipation of increasing the need for cash funds by the public," he explained in an official statement, Tuesday, March 26, 2024.
Furthermore, the BI policy of maintaining the benchmark interest rate at the level of 6 percent and solid performance of the State Budget until March 15, 2024, by recording a surplus of IDR 22.8 trillion, is a good indicator of the good condition of the domestic economy that supports the SBN market.
"On the other hand, although statements by Fed officials tend to be dovish, market participants are still waiting for their benchmark interest rate to drop this year which has the potential to support the SBN market and other emerging market assets," he said.
Deni said that the SUN tenor 5 and 10 years is still the main attraction for investors, as reflected in the number of income bids and paid bids of 43.34 percent of the total incoming bids and 53.54 percent of the total awarded bids, respectively.
According to Deni, the largest incoming bids is the 5-year SUN tenor, which is IDR 8.34 trillion or 25.87 percent of the total income bids and which was won IDR 7.45 trillion or 32.96 percent of the total awarded bids.
Deni said that in terms of foreign investors, today's SUN auction reached IDR 2.94 trillion. The majority of the incoming bids in SUN tenor 5 years amounted to IDR 1.93 trillion or 65.69 percent of the total income bids for foreign investors and won IDR 1.91 trillion or 8.45 percent of the total paid bids.
"Financial market volatility in the last two weeks put pressure on the yield level of SBN. Thus, the Weighted Average Yield (WAY) of state bonds at today's SUN auction moved up between 2bps - 8bps compared to WAY in the previous SUN auction," he said.
Deni said that in this auction, the government decided to win an offer of IDR 22.6 trillion by considering reasonable SBN yields in the secondary market, planned financing needs in 2024, and the current state treasury conditions.
"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 April 30, 2024," he added.
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