2017 SUN Perdana Auction, Government Collects Rp 15 Trillion

The Indonesian government successfully raised Rp 15 trillion (approximately US$1.1 billion) in a State Treasury Bond (SUN) auction on January 3, 2017, from Rp 36.9 trillion in bids received. This represents a 2.4 times oversubscription. Despite a downgrade from JP Morgan, demand for Indonesian government bonds remains high. The still-attractive yield and stable macroeconomic fundamentals continue to attract foreign investment in the domestic financial market. Rating agencies Moody's and Fitch have also assigned Indonesia investment grade status.

In the first SUN auction of 2017, the government offered five series of bonds: SPN03170404, SPN12180104, FR0061, FR0059, and FR0072. However, only three series were awarded: SPN03170404, SPN12180104, and FR0059. The remaining two series received no bids.

Following Donald Trump's election as President of the United States, JP Morgan released a research report on November 13, 2016, titled "Trump Forces Tactical Changes." In this report, the US financial institution recommended reallocating investor portfolios away from Indonesian government bonds, downgrading Indonesia's investment rating from overweight to underweight. This recommendation had significant repercussions, provoking anger from the Indonesian government. The Ministry of Finance subsequently terminated its cooperation with JP Morgan, including its role as a receiving bank.