Govt scores with retail bonds, as housewives take center stage

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Tue, 03/11/2008 1:39 AM  |  Business

Close to 4,000 Indonesians, 22 percent of them housewives, have bought the government's latest retail bond, a government official says.

The total demand for the bond, offered between Feb. 25 and March 6, reached Rp 13.46 trillion (US$1.48 billion), a record high according to the Finance Ministry's director general of debt management Rahmat Waluyanto.

"We received total requests worth about Rp 13.56 trillion, Rp 103.63 billion of which were illegitimate and were subsequently disbanded," Rahmat told a press briefing Monday.

Rahmat said the government had previously expected to post about Rp 10.25 trillion in sales, however, market response exceeded expectations, prompting several traders to ask for increased quotas.

The government worked with 18 traders to market the retail bond, which was intended solely for individual buyers.

The bond will be listed on March 13 on the Indonesia Stock Exchange.

The bond was ordered by 37,724 people from 31 provinces, a 65.19 percent increase from the previous bond offering ordered by 22,837 people, also from 31 provinces.

Nearly half of the buyers, amassing 48.96 percent of the total bond share, reside in Jakarta.

The majority, 22.9 percent of the buyers, were employees, 22.69 percent were housewives and 22.50 percent were entrepreneurs. They purchased 73.38 percent of the total bond value.

"Every person is allowed to order a maximum Rp 3 billion in retail bonds," said Rahmat.

The government has previously released three retail bonds, securing Rp 3.8 trillion, Rp 6.2 trillion and Rp 9.3 trillion.

The government retail bond is considered the safest investment opportunity as it guarantees a 9.5 percent annual yield, and reaches maturity in four years. In comparison, banks typically pay around 5 percent interest.

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