The tendency of investors choosing investment instruments that are more minimal risk than stock, creating a government bond (Surat Utang Negara/SUN) auction on Tuesday (26/2) successfully grabbed the number of deals, particularly in the long-tenor. According to the Directorate General of Budget Financing and Risk Management (DJPPR) Ministry of Finance, the number of deals in the auction of the SUN reached IDR93.39Trn. That number jumped to IDR27.57Trn, compared on a number of deals that go in the SUN auction two auctions last week.
Head of Business Development Division, Henan Putihrai Asset Management (HPAM), Reza Fahmi said ahead of the election so market participants are likely to increase demand on a more minimal risk assets such as bonds. During last week until Tuesday (26/2), a series of SUN short-tenor or below 10-years becomes the most hunted serial investors.
A 5-years FR0077 (Reopening) series into a series of the most widely accepted entry as much as IDR39.72Trn. While the series has a population of 10-years FR0078 (Reopening) offer IDR22.54Trn. As for the 15-years FR0068 (Reopening), the series received an offer IDR12.9Trn. Furthermore, the 20-years FR0079 (Reopening) receive offer IDR7.04Trn. Whereas, the Surat Perbendaharaan Negara (SPN) 3-months SPN03190527 (New Issuance) receive offer IDR6.1Trn and 12-months SPN12200213 (Reopening) series offer IDR5.65Trn.
“Nowadays still many domestic investors wait and see ahead of the election, so it tends to put assets in safer instruments, namely with the short-tenor‘s first, “said Reza on Tuesday (26/2). In addition, SUN auction proceeds Yesterday’s success was also due to the sustained rise in the price of SUN reference auction. The SUN price due to global trade war issues, and improving Indonesia macroeconomic.
However, the Government’s absorption occurs a decrease of IDR3Trn to IDR22Trn. The Government tried to be not in a hurry because of the potential yield moved down will still occur. “It looks like at an auction yesterday the discount given the Government the price SUN to boost yield SUN, effect on decreasing Government’s absorption, “said Reza. In the middle of the US stock markets are bullish, it will affect capital inflow into emerging markets, so the prospects of the next auction will still be crowded.