Snapshot Maybank Report - 31 May 2016

Results: Government Sukuk Bond Auction

Overview

Indonesian government conducted their sukuk auctions today and received incoming bids of Rp9.63 tn bids versus its target issuance of Rp4.00 tn or oversubscribed by 2.41x. Incoming bids during the auction was noted lower by approx. 33.6% and 22.8% compared to the last sukuk auction (two weeks ago) and compared to YTD average incoming bids during sukuk auction amounting Rp12.48 tn respectively. However, DMO only awarded Rp4.93 tn bids for its 5mo, 2y, 4y and 16y bonds. Incoming bids were mostly clustered on the PBS009 series. 5mo SPN-S was sold at a weighted average yield (WAY) of 5.43775%, 2y PBS009 was sold at 7.36693%, 4y PBS006 was sold at 7.75552% while 16y PBS012 was sold at 8.37939%. PBS011 series bids were rejected during the auction. Bid-to-cover ratio during the auction came in at 1.12X – 2.69X.

Till the date of this report, Indonesian government has raised approx. Rp77.27 tn worth of debt through bond auction which represents 72.9% of the 2Q 16 target of Rp106.00 tn. On total, Indonesian government has raised approx. Rp356.2 tn worth of debt through domestic and global issuance which represent 66.9% 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 Rp6.03 tn during every conventional auction (2 upcoming conventional auction in 2Q 16) to meet their target of Rp106.00 tn.