By Neil Chatterjee and Aditya Suharmoko
JAKARTA, April 19 (Reuters) – Indonesia may issue more
dollar bonds as it reaps the benefit of a recent investment
grade sovereign rating and market demand, after borrowing more
than $2 billion this week at lower yields than some of its
emerging peers and troubled euro zone nations.
The government sold a bigger-than-expected $2 billion of a
new 10-year dollar bond on Tuesday after drawing a hefty $5.9
billion in orders, and another $500 million in 30-year bonds –
its first global issue since getting a second stamp of approval
from Moody’s in January.
The big foreign demand surprised some analysts, who feel
Indonesia’s broad economic picture is not as rosy as the bond
sales indicate. On Thursday, brokerage Jefferies said that under
the surface, Indonesia’s finances were becoming “imbalanced” and
the country is “increasingly addicted to offshore dollar
funding.”
The 10-year yield of 3.85 percent, a record low for
Indonesia, w as below that achieved by countries such as Russia,
South Africa and Turkey in global bond issues this year, and
about 200 basis points under equivalent Spanish and Italian
debt. Ten-year U.S. Treasuries presently yield just under 2
percent.
“With a low yield and high incoming bids, it shows how high
investor confidence is on Indonesia’s economy in the future,”
said Herbie Mohede, who manages about $70 million in assets
including fixed-income ones at PT Samuel Aset Manajemen in
Jakarta.
In Mohede’s view, “with conditions as good as they are now,
it’s not a problem for Indonesia to add extra bond issues – both
local and foreign investors will be interested.”
Continued…
