[Kabar-indonesia] 4 Reports: RI's Domestic Retail Bonds Oversubscribed

[JoyoNews at aol.com]

4 Reports:

- Indonesia's Domestic Retail Bonds
    Oversubscribed

- Strong demand for Indonesia's 1st
    retail bonds

- Indonesia Govt Retail Bond Subscription
    Totals IDR3.28T

- Indonesia sells 3.28 trln rupiah in retail bond
    offer vs target 2 trln

Indonesia's Domestic Retail Bonds Oversubscribed

JAKARTA, August 7 (Dow Jones)--The Indonesian government said 
Monday its debut issue of domestic retail bonds drew bids worth 
more than 1.5 times the offered amount, paving the way for more 
such offerings in the future.

Analysts said the results were a shot in the arm for the government,
which has been seeking to widen the country's investor base in the
capital markets. The issue also opens up a new source for the
government to fund the deficit in the state budget.

"This is a very good start," Mulya Nasution, director general of state
treasury at the Finance Ministry, said. "The successful offering is a
vote of confidence from investors on the government fiscal policies."

The government accepted the entire oversubscription by increasing the
issue size to to IDR3.28 trillion ($362 million) from a targeted IDR2
trillion, Nasution said.

Finance Minister Sri Mulyani Indrawati said the government hoped to
issue more retail bonds in the future, but didn't indicate any
specific timetable.

"The more sources of financing we have, the more we will be able to
limit the financing risks and the costs," Mulyani had said earlier.

The three-year bonds, known as ORI001 and offered at a yield of
12.05%, will start trading in the secondary market Thursday.

The demand for the bonds was good "because the yield is optimal, while
the risk is minimal," Rahmat Waluyanto, the director of treasury bond
management directorate at the Finance Ministry, told Dow Jones
Newswires.

Paulus Nurwadono, a bond analyst with PT Mandiri Sekuritas, said the
government still needs to diversify its debt class by issuing, say,
savings and zero-coupon bonds.

Nasution said that nearly 24% of the bond buyers were employees of
private companies, 17% housewives, 17% individual businessmen and 16%
civil servants.

Several officials had said earlier that the government can raise
around IDR10 trillion annually by issuing retail bonds.

The government has issued nearly $60 billion in bonds locally since
1999 to bail out debt-ridden local banks and to finance the deficit in
the state budget.

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Strong demand for Indonesia's 1st retail bonds

By Adriana Nina Kusuma and Muhamad Ari

JAKARTA, Aug 7 (Reuters) - Indonesia's first sale of retail bonds
attracted strong demand, finance ministry officials said on Monday,
offering the cash-strapped government a stronger investor base as it
seeks to finance the state budget deficit.

The government took all the incoming bids worth 3.28 trillion rupiah
($361.8 million) against a targeted sale of 2 trillion for the 3-year
bonds, thanks to expectations of further domestic interest rate cuts.
Analysts say a stronger investor base would help ease pressure on the
government to raise funds from more politically sensitive
privatisation of state-owned firms or from offshore funding which
carries currency risks to finance the deficit.

"I see good demand going forward. This is partly due to expectations
of lower interest rates," said Randy Pangalila, a senior vice
president in charge of fixed income at brokerage Trimegah Securities.

The retail bonds carry a coupon rate of 12.05 percent. They have a
nominal value of 1 million rupiah and the minimum purchase is 5
million rupiah. The payment has to be made by Aug. 9.

The central bank is scheduled to review its policy rate on Tuesday,
with most analysts expecting the bank to further cut the benchmark BI
rate <BIPG> by either 25 or 50 basis points. The rate is currently at
12.25 percent.

The retail bond sale brought the government bonds already sold to
around 51 trillion rupiah this year, including foreign currency bonds.

The proceeds are used to help plug this year's state budget deficit,
estimated at 1.2 percent of gross domestic product.

Indonesian government bonds have attracted strong foreign demand this
year as they offer among Asia's highest yields, but they also carry
high risks.

Ratings agencies rate Indonesian bonds below investment grade, or as
junk bonds. Standard & Poor's Ratings Services, for example, rates
long-term Indonesian long-term local currency government bonds "BB+"
-- one notch below investment grade.

---------------------------------------------

Indonesia Govt Retail Bond Subscription Totals IDR3.28T

JAKARTA, August 6 (Dow Jones)--The Indonesian government received
IDR3.28 trillion ($362 million) in total demand for its first-ever
retail bonds, above its target of IDR2 trillion, a government official
said Monday.

The demand for the bonds was good "because the yield is optimal, while
the risk is minimal," Rahmat Waluyanto, the director of treasury bond
management directorate at the Finance Ministry, told Dow Jones
Newswires.

The subscription period for the bonds ended Friday. [ 07-08-06 0250GMT ]

Waluyanto said expectations of falling domestic interest rates also
helped demand for the three-year notes, which have a 12.05% yield in
the primary market.

Bank Indonesia is widely expected to cut its one-month key rate by 50
basis points Tuesday as inflationary pressure is easing.

The government had promised that it would fulfill all demand for the
bonds, but Waluyanto said Finance Minister Sri Mulyani Indrawati will
decide the final amount later Monday.

The issue is part of efforts to diversify sources to finance the state
budget deficit.

"The more sources of financing we have, the more we will be able to
limit the financing risks and the costs," Mulyani said in a speech to
mark the launching of the new notes, known as ORI001, on July 17.

The bonds will start trading on the Surabaya Stock Exchange on Thursday.

The government plans to offer retail bonds on a regular basis in the
future, depending on demand.

The government has said it has the funds to tap about IDR10 trillion
each year with retail bonds.

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Indonesia sells 3.28 trln rupiah in retail bond offer vs target 2 trln

JAKARTA, August 7 (XFN-ASIA) - The government has decided 
to sell 3.28 trln rupiah under its first retail bond issue, called the 
ORI-001,against the indicative target of 2 trln rupiah, the Ministry 
of Finance's treasury director Mulia Nasution said.

"All bids were absorbed," he said.

The per-unit price of the ORI-001 bonds is set at 1 mln rupiah. The
minimum order for investors is five units worth 5 mln rupiah, compared
to 1 bln rupiah in a normal bond offering.

Nasution said the buyers were mostly employees of private firms,
housewives, businessmen and civil servants.

"It means we have met our goal to reach many investors. And given that
it is the first issue, the success (of the bond offer) is a vote of
confidence from investors in the government's fiscal policy," he
added.

The government was targeting retail investors who have so far
preferred to place their idle funds in time deposits.

Proceeds from the bond sale will be used to help fund the budget
deficit and refinance maturing bonds.

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Joyo Indonesia News Service
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