Snapshot Maybank Report - 26 Apr 2016

Results: Government Conventional Bond Auction

Overview

Indonesian government conducted their conventional auctions today and received incoming bids of Rp24.41 tn bids versus its target issuance of Rp12.00 tn or oversubscribed by 2.03x. Incoming bids during the auction was noted lower by approx. 24% compared to the last conventional auction last two weeks while the result of the incoming bids were lower compared to YTD average incoming bids during conventional auction amounting Rp25.90 tn respectively. However, DMO only awarded Rp13.40 tn bids for its 7mo, 5y, 10y, 20y and 30y bonds. Incoming bids were mostly clustered on the FR0056 series. 7mo SPN was sold at a weighted average yield (WAY) of 5.90000%, 5y FR0053 was sold at 7.38887%, 10y FR0056 was sold at 7.66996%, 20y FR0072 was sold at 7.86981% while 30y FR0067 was sold at 8.12451%. No series were rejected during the auction. Bid-to-cover ratio during the auction came in at 1.26X – 3.94X. Foreign incoming bids during the auction were noted Rp8.97 tn or 36.8% of total incoming bids. However, only Rp6.06 tn bid (45.2% of total awarded bids) were awarded to foreign investors.

Till the date of this report, Indonesian government has raised approx. Rp43.37 tn worth of debt through bond auction which represents 40.9% of the 2Q 16 target of Rp106.00 tn. On total, Indonesian government has raised approx. Rp317.01 tn worth of debt through domestic and global issuance which represent 59.5% of this year target of Rp532.4 tn. Assuming that if Indonesia government issues Rp4.00 tn during every sukuk auction in 2Q 16 then the Government needs to issue Rp8.49 tn during every conventional auction (4 upcoming conventional auction in 2Q 16) to meet their target of Rp106.00 tn.