Retail bonds: The government mulls over plan to increase proportion of new debt issued in form of retail bonds in order to support financing in the 2020 budget. Planned deficit for the budget year is about 1.6-1.9% of GDP. No final disclosure yet on the sizing of bonds and deficit as budget discussions remain ongoing. The objective, according to finance minister Sri Mulyani, is to minimise global volatility and invite citizens' participation in economic development. For this, coupon offering will be made interesting. (Kontan).
Comment: To note, size of retail bonds issuance in 2019 is targeted at Rp60tn (+30% from 2018) and making up c. 16% of total financing. There are planned 10 issuances throughout this year. If the increase in 2020 follows this year's pattern, we should see added competition for funds which may crowd out banks' interest rate going forward.
Sumber : IPS RESEARCH
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