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NEWS UPDATES Asean Affairs   15 November 2013  

New BI rate to boost government bonds ownership

PT BCA Sekuritas head of investment, Herdi Ranu Wibowo, predicted that Bank Indonesia’s (BI) decision to increase its benchmark interest rate (BI rate) to 7.5 percent would boost government bond (SUN) ownership by the end of this year.

“As the BI rate has increased again, I predict foreign investors will continue to flood the bond markets, instead of the stock market. But this will only happen if the rupiah exchange rate remains stable and trade deficit does not widen,” Herdi said in Jakarta on Wednesday as quoted by Antara news agency.

He added that foreign investors would aggressively flood government bondmarkets with five, 10, 15 and 20 year tenor’s because those SUN series provided higher liquidity than other series.

According to the Finance Ministry debt management directorate office, as of Nov. 12, government bonds’ foreign ownership amounted to Rp 319,52 trillion (US$27.53 million), up by 0.31 percent from Rp 318.11 trillion at the end of October.

Meanwhile, the total SUN ownerships that could be traded as of Nov. 12 was Rp 992.05 trillion.

Herdi said high SUN yields, especially 10 year tenor SUN, had pushed foreign investors’ to enter Indonesia’s bond markets aggressively. Compared to other countries in Asia, Indonesia’s bond yields are relatively the highest.

Herdi said BI’s decision to increase its rate had caused increases in the government bond yields. With a BI rate hike, bond prices will go down while their yields will increase.
New BI rate to boost government bonds ownership

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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