T-Bond Transaction Surpasses IDR8.59 Trillion

Friday, 02/10/2009 00:00 WIB

T-Bond Transaction Surpasses IDR8.59 Trillion

Irvin Avriano (21)

Bisnis Indonesia

JAKARTA: The T-bond price index again hit 95.24 in the past two days, the record high since March 11 last year.

The surging index yesterday reflected an increase in T-bond price followed by the year high trading value of IDR8.59 trillion, thanks to banks' aggressiveness in buying T-bonds to bolster their secondary reserves (Giro Wajib Minimun/GWM sekunder) requirement this month.

Data by the T-Bond Traders Association (Perhimpunan Pedagang Surat Utang Negara/Himdasun) showed the index yesterday jumped from 95.02 a day before and higher than 88.92 in early 2009. Such an index also neared the record high index of 95.35 in March 2008.

Daily data by the Indonesia Stock Exchange (IDX/Bursa Efek Indonesia) showed the trading of all T-bond series yesterday surpassed last month's average daily trading of IDR3.08 trillion and broke the record high of IDR7 trillion booked in June.

Head of Debt Capital Markets at PT OSK Nusadana Securities Indonesia Heru Helbianto revealed banks' interests in SUN were increasing, bolstering the transactions of similar financial institutions in the market.

For October 2008, the central bank (BI) lowers reserves requirement from 9.1% to 7.5%. However, following protests from small and medium banks, reserves requirement is later fixed at 5% of the amount of third-party funds since last year.

With a margin of 2.5% to be brought into effect on October 24 this year, 5% of reserves requirement (GWM utama) has to be in rupiah, while the remaining 2.5% is secondary reserves requirement that can take forms of T-bond, T-bill, and BI Certificate (SBI).

"Triggered by the regulation, banks start eyeing T-bond since it offers better yields," Heru informed Bisnis yesterday.

Foreign ownership

In the wake of flourishing transaction and rising prices, he added, foreign ownership of T-bond increased from IDR92.74 trillion on September 18 to IDR93.03 trillion on September 25, which was also the record high since October last year.

He added an inflation of 2.83% was considered not too high, creating positive outlook for the secondary T-bond market.

Heru continued one main reason for the better price was the entry of foreign investors triggered by the US dollar depreciation against the rupiah to IDR9,600 yesterday.

Director General of Debt Management Office at the Ministry of Finance Rahmat Waluyanto confirmed the phenomenon. According to him, there were several other factors attracting foreign investors to Indonesia. "Indonesia's better bond rating, from Ba3 to Ba2, and optimisms that are created by the post-presidential election political stability have attracted foreign investors into Indonesia."

Director of Trading and Bourse Member Arrangement at IDX Wan Wei Yiong confirmed there was no data mistake in T-bond daily transaction value. He also doubted there was accumulate transaction reporting following the application of shorter bond and Islamic bond transaction reporting time from one hour to thirty minutes yesterday.

Chief Economist of PT Bank Mandiri Mirza Adityaswara said the application of secondary reserve was actually good for banks, but BI should also consider whether the instrument was appropriate to be implemented at the moment. (21/HENDRI T ASWORO)