TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Government wants to borrow money from millennials
Cashing in: Private lender BCA executive vice president on wealth management Eva Sumampouw (left), the Finance Ministry’s financing and risk management director general, Luky Alfirman (right), Indonesia Stock Exchange president director Inarno Djajadi (second right) and the Finance Ministry’s director of government debt paper, Loto Srinaita Ginting, are pictured after the launch of ORI015 in Jakarta on Thursday
Change Size
C
ashing in: Private lender BCA executive vice president on wealth management Eva Sumampouw (left), the Finance Ministry’s financing and risk management director general, Luky Alfirman (right), Indonesia Stock Exchange president director Inarno Djajadi (second right) and the Finance Ministry’s director of government debt paper, Loto Srinaita Ginting, are pictured after the launch of ORI015 in Jakarta on Thursday. (JP/Wendra Ajistyatama)
The government is targeting millennials with the latest issuance of retail bonds on Thursday in an attempt to expand the domestic investor base, while using the funds to improve the quality of education in the country.
The government offered retail bond (ORI) 015 during the issuance on Thursday with an affordable minimum order of Rp 1 million (US$65.90) and fixed coupon rate of 8.25 percent with a three-year tenor, said
Loto S. Ginting, the Finance Ministry’s government debt paper director.
Loto expected that the younger generation would be interested in investing in the instrument.
“With the launch of ORI015, we hope the funds the government obtains can be allocated to help improve the quality of education in Indonesia,” Loto said at the Indonesia Stock Exchange building in Jakarta on Thursday.
Ahmad Farhat, a student from Indonesia Banking School in Kemang, South Jakarta, said he was really interested in purchasing the ORI015 bond as it offered an attractive return, while also enabling him to contribute to his country.
“I have invested my money in the stock market previously and it was profitable. So, this time, I am planning to collect my pocket money until I have Rp 1 million to buy ORI015,” he told The Jakarta Post.
The ORI015 can be traded in the secondary market between domestic investors, with the offering period from Oct. 4 to 25.
Loto did not detail the sales target for ORI015, but mentioned that the government had provided a quota of Rp 10 trillion for 17 distribution partners. The number could increase depending on the interest shown by investors during the offering period, she said.
Of the 17 distribution partners, 15 are commercial banks, namely Bank Central Asia, Bank CIMB Niaga, Bank Commonwealth, Bank Danamon Indonesia, Bank DBS Indonesia, Bank HSBC Indonesia, Bank Mandiri, Bank Maybank Indonesia, Bank Negara Indonesia, Bank OCBC NISP, Bank Panin, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Standard Chartered Bank.
The remaining two distribution channels are securities houses Bahana Sekuritas and Trimegah Sekuritas.
Lucky Alfirman, the Finance Ministry’s director general for financing and risk management, said the purpose of the ORI015 issuance was to entice more transactions in the financial market, popularly known as market deepening, and strengthen the domestic investor base, especially retail investors.
“Foreign investors hold 39 percent of government securities in local currency. Therefore, when the market is volatile, they can easily decide to get in or out of the market [and trigger currency volatility],” he said.
The Finance Ministry has issued retail bonds worth Rp 17.7 trillion to date, including a retail sukuk called SR-010 and two saving-retail bonds named SBR 003 and SBR 004.
After issuing ORI015 on Thursday, the government plans to issue sukuk savings called ST 002 in November.
The government is optimistic that millennials will be interested in buying ORI015 as can be seen through the past issuance of SBR 004, which had drawn the interest of 21,672 investors, 45.26 percent of whom are in that age category. From SBR004, the government attracted funds worth Rp 7.32 trillion.
