Ministry of Finance: Interest in SUN remains high despite interest rate concerns

Jakarta (MidLand) – The Ministry of Finance’s Directorate General of Financing and Risk Management (DJPPR) said interest in the May 28, 2024 government debt securities (SUN) auction remains high despite concerns over Fed interest rates and geopolitical tensions.

The high interest in SUN is reflected in the number of incoming deals which reached IDR 47.11 trillion or 2.14 times the indicative target.

“Investors tend to do that wait and see after the release of the FOMC minutes last weekend, which showed the politics higher for longer The Fed on the federal funds rate. In addition to this, the global situation is still marked by geopolitical tensions that tend to increase. “However, investor interest in today’s auction is still quite high,” DJPPR government debt director Deni Ridwan said in Jakarta on Tuesday.

According to Deni, investor interest in the SUN was influenced by the relatively positive performance of the national economy and the APBN, which remained in surplus until April, i.e. IDR 75.7 trillion or 0.33 % of gross domestic product (GDP).

Total offers coming soon Foreign investors attending today’s SUN auction increased slightly to IDR 6.92 trillion from IDR 6.38 trillion in the previous auction. The majority of offers coming soon This is the medium duration (5 years) SUN series which amounts to IDR 3.22 trillion, or 46.47% of the total offers coming soon foreign investors and won IDR 2.17 trillion, or 9.85% of the total bids awarded.

Investor interest is still dominant in the 5- and 10-year SUN series offers coming soon AND bids awarded each equal to 61.16% of the total offers coming soon and 74.32% of the total bids awarded.

Offers coming soon The largest is for a duration of 5 years, i.e. IDR 14.73 trillion (31.27% of the total offers coming soon) and won IDR 6.95 trillion (31.59% of the total bids awarded).

In this auction, the government again offered the Sustainable Development Goals (SDG) bond series, FRSDG001, at today’s SUN auction and received a positive response from investors with offers coming soon equal to IDR 1,630 billion or 3.46% of the total offers coming soon.

In line with continued high investor interest in the government bond (SBN) market and relatively stable SBN market conditions, the weighted average yield (WAY) of government bonds won in today’s SUN auction fell from 4 to 11 basis points (bps) compared to the previous WAY level of the SUN auction.

Taking into account the returns (product) The reasonable SBN on the secondary market, the expected financing needs for 2024 and the current condition of the state treasury, the government decided to win the bid of IDR 22 trillion at today’s SUN auction.

According to the 2024 SBN issuance calendar, the next SUN issuance auction will be held on June 11, 2024.

Also read: Government absorbs Rs22 trillion from SUN eight series auction
Read also: Government absorbed IDR 21.36 trillion in funds from SUN seven-series auction

Reporter: Imamatul Silfia
Editor: Ahmad Wijaya
Copyright © MidLand 2024

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