REPUBLIKA.CO.ID, JAKARTA – European economic crisis affects the foreign ownership in Sovereign Bonds (SUN) as seen from the number, which decreases to 28.9 percent in May 2012 from 31.8 percent in early year.

Foreign ownership in SUN in February reaches 236.4 trillion IDR or 31.8 percent, according to the data in the Ministry of Finance. The ownership keeps decreasing until March, in the number of 224.1 trillion IDR (29.76 percent), and May, in 225.7 trillion IDR (28.9 percent).

The Director of Government Securities of Director General of Debt Management in the Ministry of Finance, Loto Srinaita Ginting, said the decreasing of foreign ownership automatically increased the domestic ownership.

“Domestic investors are willing to invest when yield increases,” Ginting said on Wednesday.

The yield of sovereign bonds with 10-year tenor increases up to 45 basis points from 6.05 in the beginning of the year to 6.50 percent in Juni 2, 2012. In 2012, he continued, the yield of 10-year tenor sovereign bonds was at the lowest level, which was 5.02 percent in February 9. Yet, the yield in May 16 reaches 6.53 percent.

The growth of the yield forces the foreign investors to sell their ownership. Ginting said, the number of foreign investors releasing their ownership was still normal and temporary. He sees domestic ownership can decrease volatility in the market.

Meanwhile, government does not hesitate to issue its bonds this year amid the crisis of global economy. But, government prefers to issue Islamic Sovereign Bonds or sukuk instead of commercial bonds. “We will prioritize domestic investors if they can absorb the bonds issuance,” Ginting said.

Ikuti Whatsapp Channel Republika