Domestic Financial Market Stable, Demand for SUN Still Solid

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ACCURATE.CO The Ministry of Finance noted that domestic and global investor demand for Government Securities (SUN) was still solid and maintained at regular SUN auctions.

“Investor demand at today’s auction is still solid with incoming bids of IDR 80.66 trillion from the indicative target of IDR 21 trillion,” said Director of Government Securities at the Directorate General of Financing and Risk Management at the Ministry of Finance Deni Ridwan in Jakarta, Tuesday (14/9/2021). .

He explained that the demand for SUN was supported by the relatively stable condition of the domestic financial market when liquidity in the market was still high.

“On the other hand, market players are taking a wait-and-see attitude regarding the release of US inflation data and the direction of the Fed’s policy regarding future tapering,” he said as quoted by Antara.

He explained that the majority of incoming bids for the SUN auction still came from domestic investors with a percentage reaching 89.2 percent of the total bids.

“The series that investors are most interested in are the 5, 10 and 20 year tenors with a total of 69 percent of the total bids that come in. Meanwhile, the demand from foreign investors is mostly in the 20 and 10 year tenors,” he said.

Deni also ensured that investors still looked aggressive as reflected in the decrease in Weighted Average Yield (WAY) for all Government Bond (ON) series won when compared to WAY in the previous auction, which was around 1-3 bps.

“The highest decline in WAY is for Government Bonds in 5 and 15 year tenors,” he said.

Previously, at a routine SUN auction on Tuesday (14/9/2021), the government absorbed funds of Rp. 21 trillion from the auction of seven series of SUNs in the primary market with incoming bids reaching Rp. 80.66 trillion.

With this auction, the total amount of state financing originating from the SUN auction during January-September 2021 will reach Rp548.74 trillion.[]

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