Do not refresh this file Government Securities Prospects in 2013 Directorate of Gov Debt Securities,...
-
Upload
sydney-dallin -
Category
Documents
-
view
219 -
download
3
Transcript of Do not refresh this file Government Securities Prospects in 2013 Directorate of Gov Debt Securities,...
Government Securities Prospects in 2013
Directorate of Gov Debt Securities, DG of Debt ManagementMinistry of Finance Republic of Indonesia
Ministry of Finance of the Republic of Indonesia
Outline
1. Government Securities Management and Financing Strategy
2. Government Securities Performance3. Government Securities Market
Prospects in 2013
2
Government Securities Management and Financing Strategy
3
Strategi Umum Pengelolaan SUN 2013
Strategic Management of Government Securities 2013
4
Supply
•Government Debt Securities
•SUKUK
Demand•Banks•Foreigners•Insurance Company•Mutual Fund•Central Bank •Pension Funds•Securities Company•Retail Investor
Government Securities Market Development Framework
Deep & Liquid MarketSufficient Market Absorption & Efficient Price/Yield
Primary Market•Activities:Regular Issuance (Book building, Issuance, Private Placement)•Infrastructure:a. Auction System (in development process with IDX):-Electronic Trading Platform (ETP) for Retail Govt. securities- Hittable of PDs quotation -Debt Switch Program (Many to Many)b. Institutional infrastructure
Secondary Market•Activities:Buyback, Debt switch, Securities Lending•Infrastructure:Buyback System, Primary Dealers, Selling Agent, Repo, Benchmark Yield Curve, Brokers/Dealers, Price Discovery Mechanism
5
MARKET INFRASTRUCTURE
Regulation and Supervision
Financing Trend, 2004 – 2013
(trillion IDR)(trillion IDR)
Notes:* LKPP Unaudited 2012** Revised Budget 2013
Notes:* LKPP Unaudited 2012** Revised Budget 2013 6
2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013**
Govt Securities - net 6,9 22,6 36,0 57,2 85,9 99,5 91,1 119,9 159,7 231,8
Domestic Loan - - - - - 0,39 0,62 0,75 0,50
External Loan - net (28,1) (10,3) (26,6) (26,6) (18,4) (12,4) (4,57) (17,8) (25,1) (16,90)
Others/Non-Debt - net 42,0 (1,2) 20,0 11,9 16,6 25,5 4,6 28,3 37,9 (8,8)
Budget Defisit, % to GDP 0,5 0,9 1,3 0,1 1,6 0,7 1,1 1,8 2,38
-
0,5
0,9
1,3
0,1
1,6
0,7
1,1
1,8
2,38
(0,5)
-
0,5
1,0
1,5
2,0
2,5
-50
0
50
100
150
200
Gov’t Securities Issuance Plan 2013
2013 -
Budget
(trillion IDR)
% of GDP
2013-
Revised
Budget
(trillion IDR)
% of
Revised
GDP
Total Revenue & Grants 1.529,7 16,5% 1.502,0 16,0%of which Tax Revenue 1.192,99 12,9% 1.148,36 12,2%
Non Tax Revenue 332,20 3,6% 349,16 3,7%0,0% 0,0%Expenditure 1.683,0 18,2% 1.726,2 18,4%of which Interest payment 113,2 1,2% 112,5 1,2%0,0% 0,0%
Subsidy 317,2 3,4% 348,1 3,7%0,0% 0,0%Primary Balance (40,1) -0,4% (111,7) -1,2%
Overall Balance (deficit) (153,3) -1,7% (224,2) -2,4%
Financing 153,3 1,7% 224,2 2,4%0,0% 0,0%Non Debt (Net) (8,1) -0,1% (8,8) -0,1%Debt 161,5 1,7% 225,0 2,4%0,0% 0,0% Govt Securities (Net) 180,4 1,9% 231,8 2,5%0,0% 0,0%
Domestic Official Borrowing 0,5 0,0% 0,5 0,0%External Official Borrowing (Net) (19,5) -0,2% (16,9) -0,2%
Disbursement 45,9 0,5% 49,0 0,5% Program Loan 6,5 0,1% 11,1 0,1% Project Loan (Bruto) 39,4 0,4% 37,9 0,4%On lending (7,0) -0,1% (6,7) -0,1%Repayment (58,4) -0,6% 59,2 0,6%
Assumptions:
GDP (trillion) 9.269,6 9.404,7
Growth (%) 6,8 6,3
Inflation (%) 4,9 7,2
3-months SPN (% avg) 5,0 5,0
Rp / USD (avg) 9.300,0 9.600,0
Oil Price (USD/ barrel) 100,0 108,0
Oil Lifting (MBCD) 900,0 840,0
Item
7
Gov’t Securities Operation – Policy Combination Domestic market issuance will be prioritized Issuance in benchmark tenor, Benchmark Series for 2013:
Issuance in global market Maximum non-IDR govt securities issuance
approximately 18%-20% from total gov’t debt securities issuance
Buyback, debt switching, direct transaction Initiatives strategic :USD securities issuance in domestic
market & sukuk project financing
FR 66 – 5 Y FR 63 – 10 Y FR 64 – 15 Y FR 65 – 20 Y
Primary Dealers1. Citibank N.A2. Deutsche Bank AG3. HSBC 4. PT. Bank Central Asia, Tbk5. PT. Bank Danamon Indonesia, Tbk. 6. PT. Bank Internasional Indonesia, Tbk7. PT. Bank Mandiri (Persero), Tbk8. PT. Bank Negara Indonesia (Persero),
Tbk9. PT. Bank OCBC NISP, Tbk 10.PT. Bank Panin, Tbk
11.PT. Bank Rakyat Indonesia, Tbk12.PT. Bank Permata, Tbk 13.PT. Bank CIMB Niaga, Tbk14.Standard Chartered Bank15.JPMorgan Chase Bank NA.16.PT. Bahana Securities17.PT. Danareksa Sekuritas18.PT. Mandiri Sekuritas 19.PT. Trimegah Securities, Tbk
Financing Progress 2013
8*Adjusted by changes in Cash Management & Debt Switch
(Million IDR)
Revised Budget
2013Realization
(ao September 10, 2013)
% Realization
to Revised
Budget 2013
Government Securities Maturing in 2013 96.980.835 69.039.924 71,19%
Government Securities Net 231.800.000 149.690.566 64,58%
Buyback 3.000.000 1.551.385 51,71%
Issuance Need 2013* 331.780.835 220.281.875 66,39%
Government Debt Securities (GDS) 187.078.000
Domestic GDS 147.850.000
- Coupon GDS (Auction, Private Placement) 112.600.000
- Conventional T-Bills (Auction, Private Placement) 35.250.000
International Bonds 39.228.000
- USD Global Bonds 39.228.000
Government Islamic Debt Securities 33.203.875
Domestic Government Islamic Debt Securities 33.203.875
Global Sukuk -
Government Securities Performance
Primary Market Performance
10
In the last auction, foreign participation reached the highest level of success rate (34%), meanwhile the average foreign participation in Government Debt Sec Auction is 56%.
Increasing volatility in second quarter 2013 influenced demand in domestic market
24,60 53,98 48,73
95,57
189,46
136,18
198,23
315,91
393,41
430,59
275,74
11,71 23,57 22,54
39,30
70,78 66,06 79,20
101,90
138,85 152,77 135,85
11,92
10,42
13,97
10,14 10,01
11,86
10,04
7,57
5,965,30
8,60
0
3
6
9
12
15
-
100
200
300
400
500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 August 27, 2013
Total Incoming Bid Total Bid Accepted Yield at Tenor 10 year (RHS)
[IDR Trillion]
48
32
45
39
3234
52
31 3032 32
50
0
10
20
30
40
50
60
2008 2009 2010 2011 2012 Jan up to August 2013
Foreign Incoming Bids (%) Success Rate (%, RHS)
0
20
40
60
80
Jan-09
Jun-09
Nov-09
Apr-10
Sep-10
Feb-11
Jul-11
Dec-11
May-12
Oct-12
Mar-13
Aug-13
2,00
4,00
6,00
8,00
10,00
12,00
14,00
16,00
18,00
20,00
22,00
Ap
r'08
Ju
n'0
8
Ag
us
t'08
Ok
t'08
De
s'0
8
Fe
b'0
9
Ap
r'09
Ju
n'0
9
Ag
us
t'09
Ok
t'09
De
s'0
9
Fe
b'1
0
Ap
r'10
Ju
n'1
0
Ag
us
t'10
Ok
t'10
De
s'1
0
Fe
b'11
Ap
r'11
Ju
n'11
Ag
us
t'11
Ok
t'11
De
s'11
Fe
b'1
2
Ap
r'12
Ju
n'1
2
Ag
us
t'12
Ok
t'12
De
s'1
2
Fe
b'1
3
Ap
r'13
Ju
n'1
3
Ag
us
t'13
5Y 10Y
15Y 20Y
Average daily trading (IDR Trilion)Average daily trading (IDR Trilion)
Secondary Market Performance
11
Up to Sept 4, 2013
Global Financial Crisis
Eurozone sovereign debt crisis
[In Percentage] As of Sept 10, 2013
5,12 7,04
5,15
14,12 12,88
-
3,00
6,00
9,00
12,00
15,00
2008 2009 2010 2011 2012
Turn Over Govt Bond 10 Y
Activity in the domestic bond market increasingYield of Benchmark Series trend to pick up
Bid Ask Spread 10 Y Govt Bond Turn Over 10 Y Govt Bond
2.549 3.307
5.899 4.235 3.420
4.963
7.671 9.389
6.657 7.603 7.421 7.932 9.092
11.081
14.926
11.263
22.151
-
80
160
240
320
400
480
-
6.000
12.000
18.000
24.000
2005
2006
2007
2008
2009
2010
2011
2012
Jan '13
Feb '13
Mar '
13
Apr '13
May '13
Juni '13
July 13
Aug
13
3 Sep 13
Volume (billion rupiah) - LHS
LCY 10 Year Government
BondsLatest Yield YTD Change (BP)
MTD Change (BP)
HK 2.457 +185.9 +12.2
ID 8.818 +362.7 +40.3
JP 0.747 -4.4 +2.7
KR 3.620 +46.0 +9.0
MY 3.900 +39.7 -15.6
PH 3.440 - 71.10 -0.3
SG 2.690 +139.0 +2.0
TH 4.361 +85.1 +9.3
US 2.964 +120.7 +18.0
VN 9.150 - 105.0 +10.0
Yield SBN pada peer’s market
• As of September 11, 2013• Source Asian Bonds Online
12
• Indonesia Gov’t bond yield post take highest increase among others in Asia region.
13
Ownership of Tradable Domestic Government Securities
In IDR Trillion
During 2009 – 2013, domestic financial institutions are picking up in size, however growth of ownership from this institution still lower than foreign investors.
Banks 254,36 43,72% 217,27 33,88% 265,03 36,63% 299,66 36,73% 314,34 35,38% 291,93 32,01% 333,74 36,00% 349,84 37,75%
Govt Institutions 22,50 3,87% 17,42 2,72% 7,84 1,08% 3,07 0,37% 29,13 3,28% 66,95 7,34% 38,20 4,12% 22,25 2,40%
Non-Banks 304,89 52,41% 406,53 63,40% 450,75 62,29% 517,53 63,09% 545,05 61,34% 553,14 60,65% 555,13 59,88% 554,76 59,85%
Mutual Funds 45,22 7,77% 51,16 7,98% 47,22 6,53% 43,19 5,27% 39,61 4,46% 40,02 4,39% 40,06 4,32% 39,87 4,30%
Insurance Company 72,58 12,48% 79,30 12,37% 93,09 12,86% 83,42 10,17% 126,38 14,22% 125,09 13,72% 124,69 13,45% 125,19 13,51%
Foreign Holders 108,00 18,56% 195,76 30,53% 222,86 30,80% 270,52 32,98% 282,96 31,85% 285,77 31,33% 284,01 30,64% 283,08 30,54%
Pension Fund 37,50 6,45% 36,75 5,73% 34,39 4,75% 56,46 6,88% 29,11 3,28% 33,71 3,70% 37,65 4,06% 37,76 4,07%
Securities Company 0,46 0,08% 0,13 0,02% 0,14 0,02% 0,30 0,04% 0,99 0,11% 1,14 0,12% 1,10 0,12% 1,04 0,11%
Individual 25,02 2,82% 25,17 2,76% 23,23 2,51% 23,40 2,53%
Others 41,12 7,07% 43,43 6,77% 53,05 7,33% 63,64 7,76% 40,97 4,61% 42,24 4,63% 44,39 4,79% 44,41 4,79%
Total 581,75 100% 641,21 100% 723,61 100% 820,27 100% 888,51 100% 912,03 100% 927,07 100% 926,85 100%
Aug-13Jul-13Dec-12 Jun-13Dec-09 Dec-11 10-Sep-13Dec-10
9,67 13,88
(1,49)
(29,29)
1,69
(4,99)
8,06
13,11
(8,99)
(2,27)
4,15
(4,37)(0,08)
10,13
(1,41)
7,83 9,35
19,52
0,68 2,68
8,44
(0,88)
17,97
4,22
(19,98)
2,81
(1,76)(0,93)
(0,15)
(0,10)
(0,05)
0,00
0,05
0,10
(40,00)
(30,00)
(20,00)
(10,00)
0,00
10,00
20,00
30,00
Jun-1
1Jul
-11
Aug
-11
Sep
-11
Oct
-11
Nov
-11
Dec
-11
Jan-1
2Fe
b-1
2Ma
r-1
2Ap
r-1
2Ma
y-1
2Jun
-12
Jul-1
2Au
g-1
2Se
p-1
2Oc
t-1
2No
v-1
2De
c-1
2Jan
-13
Feb
-13
Mar
-13
Apr
-13
May
-13
Jun-1
3Jul
-13
Aug
-13
10-Se
p-1
3
Capital Inflows Capital inflows over total foreign holders
Foreign Investor Activity
Net Buyer (Seller) - Non ResidentForeign Ownership - Proportion by Tenor[In IDR Trillion]
14
Foreign investors mostly dominated by real money long term investors
Capital outflow month to date is amounted IDR 18.59 Trillion lower than capital outflow in Sept 2011 (European Crisis) amounted IDR29.29 Trillion
4% 10% 12% 8% 4% 4%5%
5% 8%3% 6% 6%
20%18%
17%16% 15% 15%
22%21%
25%28% 35% 35%
49% 46% 38% 45% 40% 40%
19%
30,53% 30,80%32,98%
30,64% 30,54%
0%
20%
40%
0%
20%
40%
60%
80%
100%
Dec-09 Dec-10 Dec-11 Dec-12 Aug-13 10-Sep-13
>10 >5-10 >2-5 >1-2 0-1 % Foreign Ownership to Total (RHS)
0,00
5,00
10,00
15,00
20,00
25,00
0,00
50,00
100,00
150,00
200,00
250,00
300,00
350,00
Jan-0
8
Jun-0
8
No
v-08
Ap
r-09
Sep-0
9
Feb-1
0
Jul-1
0
De
c-10
Ma
y-11
Oct-1
1
Ma
r-12
Au
g-12
Jan-1
3
Jun-1
3
Nominal amount of bonds held by foreign investors (LHS)
10-year domestic government bond market (RHS)
10 Y Gov Bonds Yield and Foreign Ownership Movement During Crisis
Catatan :
* During September to December 2008 ** During August to September 2011*** During 1 February s.d. 1 June 2012
In September 2011, foreign investors pulled out from domestic government bond market in bigger volume than in September 2008. However, the impact on the benchmark domestic government yield was much less pronounced.
15
5 Sept 2008: Foreign Ownership IDR108.4trn (20.0%)
Subprime Mortgage Crisis
10 Maret 2009: Foreign Ownership IDR78.7trn (14.5%)
13 Sept 2011: Foreign Ownership IDR249.2trn (35.9%)
29 Sept 2011: Foreign Ownership IDR229.1trn (32.9%)
European sovereign debt concerns
13 Feb 2012: Foreign Ownership IDR236.4 trn (31.80%)
YearsLowest
Yield (%) Highest
Yield (%) Difference
(%)11,246 20,955 9,71
(6 Agsts 2008) (27 Okt 2008)6,454 7,647 1,19
(9 Sept 2011) (22 Sept 2011)5,02 6,53 1,51
(9 Feb 2012) (16 May 2012)
2008 *
2011 **
2012 ***
As of Sept 10, 2013
5,20
5,60
6,00
6,40
6,80
7,20
7,60
8,00
8,40
8,80
9,20
270,00
280,00
290,00
300,00
310,00
03-Jun-1305-Jun-1307-Jun-1309-Jun-1311-Jun-1313-Jun-1315-Jun-1317-Jun-1319-Jun-1321-Jun-1323-Jun-1325-Jun-1327-Jun-1329-Jun-1301-Jul-1303-Jul-1305-Jul-1307-Jul-1309-Jul-1311-Jul-1313-Jul-1315-Jul-1317-Jul-1319-Jul-1321-Jul-1323-Jul-1325-Jul-1327-Jul-1329-Jul-1331-Jul-1302-A
ug-1304-A
ug-1306-A
ug-1308-A
ug-1310-A
ug-1312-A
ug-1314-A
ug-1316-A
ug-1318-A
ug-1320-A
ug-1322-A
ug-1324-A
ug-1326-A
ug-1328-A
ug-1330-A
ug-1301-Sep-1303-Sep-1305-Sep-1307-Sep-1309-Sep-13
Nominal amount of bonds held by foreign investors (LHS)10-year domestic government bond market (RHS)
The Government Proactive Effort
16
MoF & Central Banks is coordinating on market stabilization
Government Debt Buy Back on June 10th IDR 0,496 Tr
Government Debt Buy Back on June 13th IDR 0,499 Tr
Government Debt Buy Back on June 20th IDR 0,5Tr
Government Debt Purchase by Central Banks onJune 12th 2013IDR 1.2 Tr
As of Sept 10, 2013
The Government Proactive Effort
17
1. Improve the communication between the market player and stake holders of Government Debt Market by doing investor conference call on Thursday, June 13th 2013
2. Government Debt Buy Back on:• June 10th, 2013 - IDR496,9 bio• June 13th 2013 - IDR499,5 bio • June 20th 2013 - IDR500 bio
3. Activate Government Debt Securities mitigation crisis through Bond Stabilization Framework (BSF), by hold a meeting within stakeholders, vice ministry of finance II, and secretariate ministry of state enterprises on Thursday, June 13th 2013.
4. Daily monitor on Government Debt Market and yield movement.
5. Coordination on financial stability system.
Ministry of Finance (Mof) Central Banks (BI)
1. Increase deposit facility interest rate for 25 bps to be 4,25% start from June 12th, 2013.
2. Increase BI Rate for 25 bps to be 6,00% on June, 13th,2013.
3. Purchasing on secondary market through auction in June 12th, 2013 in the amount of IDR 1,2 trillion.
Deposit Insurance Company (LPS)
1. Increase guaranteed deposit interest rate to be 5,75% for Rupiah and 1,25% for foreign exchange on commercial banks
2. Increase the deposit interest rate for rural banks to be 8,25%.
Government Securities Market Prospects in 2013
Government Debt Securities Prospect on 2013
19
1. With the additional target of issuance on Revised Budget 2013, there is an opportunity for the market player to allocate their portfolio on Government Debt on a relative high return comparing to the first semester 2013. Although there’ some risk triggered by external factor such as the QE ending facility that brings the raise on UST, inflation expectation as an impact of the subsidied fuel hike and the exchange rate weakness.
2. The correction yield is deep and estimated had reach the bottom. It is a good opportunity for local and foreign investor to invest on Govenrment Securities.
3. The insurance and pension fund investible asset allocate for Government Debt Securities is relatively low there still more room for investing on Government Debt Securrities.
4. The Government is pro active on developing and maintaining the market stability together with the regulator (BI, OJK dan LPS).
5. Building an intensive communication with the market player in order to deliver the policy responsively.
6. Central Bank (BI) is using Government Securities as monetary tools and will gradually building stock on the government debt and reduce the SBI ownership as mandated on the State Treasury Law.
7. There are policy and initiatives regarding obligation to invest on Government Debt , among others: Basel III application
Capital Equivalency Maintained Assets (CEMA) Application Central Banks on Foreign Banks
The Establishment of Badan Penyelenggara Jaminan Sosial (BPJS) yang terdiri dari BPJS Kesehatan (instrumen SBN jangka pendek) dan Ketenagakerjaan (instrumen SBN jangka panjang).
END OF PRESENTATION
Directorate General of Debt ManagementMinistry of Finance of Republic of Indonesia
Directorate of Government SecuritiesFrans Seda building, 4th floor,Jl. Wahidin Raya No. 1, Jakarta Pusat – Postal Code: 10710Phone: +6221 3810175Fax. : +6221 3846516Site: www.djpu.depkeu.go.id