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.
Indonesian SPVs dominate foreign ownership of govt bonds: Official
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Rupiah and the US Dollar notes are arranged side by side on the desk of a bank in Jakarta. (Antara/Rosa Panggabean)
T
he huge proportion of foreign ownership of government debt papers (SBN) should not be directly interpreted as a bad sign for the market as it could be Indonesian investors using their special purpose vehicle (SPV) abroad, a finance ministry official has said.
The common assumption is that if the ownership of SBN is dominated by foreign investors, then the market will be more unpredictable and risky, Scenaider Siahaan, director for the strategy and financing portfolio at the Finance Ministry's financing and risk management office.
“What’s interesting was that in 2014 and 2015. Although Indonesian currency’s depreciation was steep, investors stayed in the market,” he said during a seminar titled “The Fiscal Policy and Debt Structure on Indonesia Economy” in Jakarta on Monday, elaborating that foreign investors usually sold debt papers during a time of crisis to cut losses.
He speculated that major portions of foreign investment in SBN could probably be attributed to Indonesian people using their offshore-based SPVs–firms established to serve a particular purpose in line with the founder’s interests.
As of Oct. 4, foreign investors held Rp 684.92 trillion in SBN compared to Rp 558.52 trillion in December 2015. This means that Rp 126.4 trillion worth of foreign funds have flowed into the country this year.
In other words, 39.15 percent of SBN were in the hands of foreign investors, compared to 38.21 percent in December last year. (win/ags)
