ORI013 is still attractive

JAKARTA. Starting from today to 20 October 2016, government offers serie 13 government retail bond (ORI013) with a 6% of coupon rate.

Head of the Subdirectorate of Government Bond Portofolio Management at Directorate of Risk and Funding Management (SUN DJPPR) Novi Puspita Wardani said that the coupon rate was determined by the cut in BI or the Central Bank’s 7-days reserve repo rate, as well as the decrease in Deposit Insurance Agency’s rate by 50 basis points (bps).

ORI013 coupon rate is lower than 9% of ORI012 coupon rate. However, government is confident that ORI013 will attract investors. “ORI013 targets the segment of Indonesian retail investors, who own identity card (KTP), including those who join tax amnesty program”, said the Director of SUN DJPPR Loto Srianita Ginting.

Fixed income analyst at MNC Securities I Made Adi Saputra said that investor may earn 5.61% of net yields per year from ORI013 after taxes (15% on bond interest).

Made added that the coupon rate of  ORI013, which stands at 6.6% is also higher than the three-year government bond’s yield, as well as 6.30% of average12-month deposit’s interest rate.

Head of Fixed Income at Indomitra Securities Maximilianus Nico Demus mentioned that ORI013 is an attractive investment instrument, while deposit interest rate tends to decrease. Maximilianus estimated that three-year deposit’s interest rates are ranging from 3.75%-4.75% before tax.  

Therefore, Made estimated that government may obtain IDR20 trillion to IDR25 trillion of funds by issuing ORI013.

The three-year ORI013 will mature on 15 October 2019, while the schedules for quota and settlement are on 24 October and 26 October 2016, respectively.

Government set the holding period during two periods of coupon payment, therefore investor is just allowed to transfer the ORI013 on 15 December 2016. The investor may order at minimum of IDR5 million of bonds and maximum of IDR3 billion of bonds. The schedule for coupon payment is on 15th of each month, while the first coupon payment is scheduled on 12 November 2016.

Government has appointed 24 sales agents to market ORI013 in 39 cities in all around Indonesia, including in the eastern part of Indonesia.

(Muhammad Farid/Translator)