Bond Market Indonesia: Government Starts Selling Conventional Retail Bonds Today
In order to tackle an estimated shortfall of more than IDR 260 trillion (approx. USD $17.5 billion) in the 2015 State Budget, the Indonesian government starts selling government bonds to Indonesian retail investors today (21/09). In the original 2015 State Budget the government projected a deficit of 1.9 percent of the country’s gross domestic product (GDP). Recently, this figure was raised to 2.23 percent of GDP due to disappointing tax revenue amid weak economic growth.
Indonesia’s Finance Ministry said the coupon on the three-year government retail bonds (ORI012) was set at 9 percent, 125 basis points higher than the 7.75 percent on time deposit interest guaranteed by the Deposit Insurance Agency (LPS) and higher than the 7.50 percent key interest rate of Bank Indonesia (BI rate). The retail bonds will be sold until 15 October 2015. Banks and securities companies that assist the sale include Bank Central Asia, Bank Mandiri, Bank Negara Indonesia, Bank Tabungan Negara, and Danareksa Sekuritas.
It is the 12th conventional bonds issuance for retail investors. Since the first launch in 2006, the Indonesian government has already issued 11 ORI bonds (Obligasi Negara Ritel Indonesia). ORI is issued specifically for Indonesian retail investors/individuals. Besides ORI, the government also issues other instruments to attract retail investors i.e. the Retail Sharia Government Bond (Sukuk Negara Ritel, or, Sukri), savings bonds and government bonds (Surat Utang Negara, or, SUN) for the domestic market. So far, ORI bonds have been warmly welcomed by investors as can be seen in the table below.
Indonesian ORI Bond Series:
| ORI | Year |
Coupon (%) | Maturity Date |
Investment (in trillion) |
Number of Investors |
New Investors |
| 001 | 2006 | 12,05 | 08-08-2009 | IDR 3.28 | 16,561 | 16,561 |
| 002 | 2007 | 9,28 | 28-03-2010 | IDR 6.233 | 13,158 | 10,372 |
| 003 | 2007 | 9,40 | 12-09-2011 | IDR 9.367 | 22,837 | 16,692 |
| 004 | 2008 | 9.50 | 12-03-2012 | IDR 13.455 | 37,724 | 26,089 |
| 005 | 2008 | 11,45 | 15-09-2013 | IDR 2.71 | 14,001 | 10,983 |
| 006 | 2009 | 9,35 | 15-08-2012 | IDR 8.54 | 24,433 | 14,601 |
| 007 | 2010 | 7,95 | 15-08-2013 | IDR 8.0 | 17,705 | 10,959 |
| 008 | 2011 | 7,30 | 15-10-2014 | IDR 11.0 | 15,372 | 10,410 |
| 009 | 2012 | 6,25 | 15-10-2015 | IDR 12.68 | 25,293 | 16,107 |
| 010 | 2013 | 8,50 | 15-10-2016 | IDR 20.2 | 38,860 | 26,824 |
| 011 | 2014 | 8,50 | 15-10-2017 | IDR 21.2 | +35,000 | - |