Indonesia's Government Bonds Attracting Investors Amidst Still-Attractive Yield Spreads

The yield on Indonesian government bonds remains attractive compared to bonds from other Asian countries. This has fueled high demand from the public in government bond auctions.

Quoting Asiabondsonline, the yield on Indonesian government bonds in local currency on January 4, 2021, was 6.41%. This figure is significantly higher than the yield on Philippine government bonds (4.85%) and Malaysian government bonds (3.64%).

This high yield makes Indonesian government bonds more expensive than those in the region. According to data from the Directorate General of Financing and Risk Management (DJPR) of the Ministry of Finance, total bids submitted in the State Debt Securities (SUN) auction on January 4, 2022, reached Rp 77.58 trillion.

Of this amount, the FR0093 series was the most popular, with bids totaling Rp 26.82 trillion. This was followed by the SPN12230105 series with bids totaling Rp 12.68 trillion, then the SPN3220406 series with bids of Rp 12.68 trillion, and the FR0091 series with bids of Rp 11.58 trillion.

Of the total bids submitted, only Rp 25 trillion were accepted. The breakdown is as follows: the FR0091 series was the largest accepted, reaching Rp 7.5 trillion. This was followed by the FR0093 series at Rp 6.3 trillion, the FR0090 series at Rp 3.8 trillion, the FR0092 series at Rp 2.85 trillion, the SPN12230105 series at Rp 2 trillion, the FR0089 series at Rp 1.55 trillion, and the SPN03220406 series at Rp 1 trillion.