Government Records Offer For Capai SUN Auction Of IDR 50.2 Trillion

Illustration. (Photo: Doc. Antara)

The Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance noted that the total incoming bids (incoming bids) at the State Securities (SUN) auction on Tuesday, April 30, 2024 reached IDR 50.2 trillion from IDR 32.34 trillion in the previous SUN auction. Meanwhile, the nominal won (paid bids) at this SUN auction is IDR 21.5 trillion.

Director of State Debt Letter DJPPR Deni Ridwan said, in the midst of the wait and see attitude of the Fed's policy steps at the FOMC meeting on May 1, 2024 and the increase in BI rate by 25 bps at the RDG BI meeting on April 23-24, 2024, investor interest in today's SUN auction was quite solid.

"This is supported by constructive indicators of the domestic economy, including solid performance of the State Budget until the end of the first quarter of 2024 by recording a surplus of IDR 8.1 trillion, and increasing domestic liquidity with the growth of money supply (M2) in March," he explained.

Meanwhile, the total incoming bids for foreign investors at today's SUN auction also increased significantly to Rp8.81 trillion from Rp2.94 trillion in the previous SUN auction.

According to Deni, the majority of the incoming bids are in the medium-tensor SUN (5 years) series of Rp4.53 trillion or 51.43 percent of the total incoming bids of foreign investors and won Rp3.23 trillion or 15.05 percent of the total paid bids.

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 Rp. 14.27 trillion or 28.42 percent of the total income bids and which was won by Rp. 8.45 trillion or 39.3 percent of the total awarded bids.

Deni said that investor demand is still dominant in the SUN series tenors 5 and 10 years, with 56.77 percent of the total income bids and paid bids respectively.

Deni conveyed that financial market volatility in recent times has been caused by global factors, such as expectations of the Fed's high interest rate for a longer time of high for longer and increasing geopolitical tension in the Middle East, is pushing for an increase in the level of SBN yields in general.

"So, the Weighted Average Yield (WAY) of state bonds at today's SUN auction moved up between 4bps - 5bps compared to the secondary market yield level at the close of the day before," he said.

Deni said that in this auction, the government decided to win an offer of Rp. 21.5 trillion by considering reasonable SBN yields in the secondary market, plans for financing needs in 2024, and the current condition of the state treasury.

"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 May 14, 2024," he added.