Bonds for Retail Investors Coming Soon
Tito Summa Siahaan
The government plans to sell rupiah-denominated bonds aimed at individual investors in the fourth quarter as it seeks funds to plug the budget deficit.
Loto Ginting, a director of the debt management office at the Finance Ministry, said the government may sell bonds to retail investors in October. She said the size of the bond issue had not been decided.
Securities sold to retail investors are known as Obligasi Retail Indonesia. Southeast Asia’s largest economy sold Rp 11 trillion ($1.2 billion) of bonds aimed at Indonesian citizens in October last year.
Individual Indonesian investors are permitted to buy smaller parcels of bonds than institutional investors are. Parcels range from Rp 5 million to Rp 3 billion, according to Finance Ministry guidelines.
Total outstanding bonds sold to retail investors stand at Rp 29.7 trillion, equivalent to 4.1 percent of the government’s Rp 730 trillion of rupiah-denominated securities, according to government data.
The government, which has been selling dollar- and rupiah-denominated bonds since 2002, wants to diversify funding and investors in the domestic bond market. The sale of bonds is used to plug the central government’s budget deficit, which is forecast at 2.2 percent of gross domestic product, or Rp 190 trillion, this year. The government raised Rp 127 trillion from selling dollar- and rupiah-denominated bonds last year.
Rahmat Waluyanto, the director general of the debt management office, said on June 11 that the government was considering offering up to $1 billion worth of dollar-denominated Islamic bonds in the third quarter this year. Rahmat did not comment on the progress of the planned global issue of sukuk, or Islamic bonds.
“We will focus more on sukuk that are based on projects,” Rahmat told reporters in Jakarta on Friday, referring to repayments linked to specific initiatives. “We will have a railway sukuk next year.”