GOVERNMENT SECURITIES MANAGEMENT

Transcription

1 GOVERNMENT SECURITIES MANAGEMENT March 23, 2016 Directorate General of Budget Financing and Risk Management Ministry of Finance of The Republic of Indonesia

2 OUTLINE 1. Financing Strategy Government Securities Performance 3. Crisis Management Protocol & Bond Stabilization Framework 4. Debt Outstanding & Risk Profile DISCLAIMER: This presentation does not constitute or form part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Republic in any jurisdiction or as an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is not and should not be construed as financial, legal, tax, investment or other product advice. 2

3 Divider title GOVERNMENT SECURITIES FINANCING STRATEGY 2016

4 FINANCING TREND, (trillion IDR) 370 3, ,3 2,3 2,5 2,5 2, ,1 0,5 0,9 1,3 1,6 0,7 1,1 1,8 1,5 1,0 0, , * Govt Securities - net 6,9 22,6 36,0 57,2 85,9 99,5 91,1 119,9 159,7 224,7 264,6 362,3 Domestic Loan ,4 0,6 0,8 0,5 1,0 0,7 External Loan - net (28,1) (10,3) (26,6) (26,6) (18,4) (12,4) (4,6) (17,8) (23,5) (5,8) (12,4) 10,4 Others/Non-Debt - net 42,0 (1,2) 20,0 9,1 16,6 25,5 4,6 28,3 38,1 18,1 (4,3) (55,2) Budget Defisit, % to GDP 1,1 0,5 0,9 1,3 0,1 1,6 0,7 1,1 1,8 2,3 2,3 2,5 (0,5) Notes: Budget Realization

5 GENERAL DEBT FINANCING STRATEGY FOR Active debt management and ALM 1. Manageable Debt-to-GDP ratio 2. Financial inclusion & market deepening DEBT POLICY IN 2016 BUDGET 5. Loan as an alternative instrument for financing 4. Selective external loan (infrastructure and energy sector) 3. Debt issuance for productive activity 5

6 GOVERNMENT BUDGET FOR 2016 Description 2016 Budget A. Total Revenue 1,822.5 I. Domestic Revenue 1, Taxation 1, Non-Taxation II. Grant 2.0 B. Government Spending 2,095.7 I. Central Government Spending 1, Ministerial Spending Non-Ministerial Spending II. Transfer to Region and Village Fund C. Primary Balance (88.2) D. Budget Deficit over GDP (%) (273.2) Deficit to GDP (2.15%) E. Financing I. Domestic a. Banks 5.5 b. Non-Banks Government Securities Domestic Loan 3.3 II. Foreign (Net) 0.4 Macroeconomics Assumptions Economic Growth: 5,3% Inflation: 4,7% Exchange Rate: Rp13.900/USD 3-Month Govt. Treasury Bills: 5,5% ICP: USD50/barrel Oil Lifting: 830 thousand barrels/day Gas Lifting: thousand barrels of oil equivalent per day Debt (Net) Govt. Sec. (Net) Issuance Redemption & Cash Management (216.39) Debt Portfolio Management (3.00) Domestic Loan (Net) 3.26 Withdrawal 3.71 Redemption (0.45) Foreign Loans (Net) 0.40 Withdrawal Redemption (68.78) [In IDR Trillion, where applicable] 6

7 GOVERNMENT SECURITIES INDICATIVE FINANCING PLAN FOR 2016 Instruments Indicative Target (IDR tn) Preliminary Budget Government Securities (Net) 327,224 Redemption 197,339 Cash Management 19,054 Buyback 3,000 Government Securities (Gross) 546,618 Composition Domestic 76% Auction 66% Non-Auction 10% International Bond 24% Benchmark Series 2016 Series Coupon Maturity FR0053 8,250% July 15, 2021 FR0056 8,375% September 15, 2026 Domestic Issuance Weekly Auction: Conventional Securities: 23 x Islamic Securities: 23x Non-Auction: Retail bonds: SR (Q1), SBR (Q2), Sukuk Tabungan (Q3), and ORI (Q4) Private Placements: Based on request International Bonds Issuance (USD, EUR, JPY-denominated) Issuance of International Bonds as complement to avoid crowding out in domestic market and provide benchmark for corporate issuance, consists of USD, YEN or EURO global bonds; Maximum issuance international bond 30% from target gross. Issuance targets for GDS, Sukuk and ATM target Government Debt Securities (SUN): 76 %; Sukuk : 24% ATM for Government Securities (SBN): 9-11 years. FR0073 8,750% May 15, 2031 FR0072 8,250% May 15, 2036 Source: Ministry of Finance, USD/IDR: 13, SBR: Saving Bond Ritel or Retail Savings Bond 2. Sukuk Tabungan means Sukuk Savings Bond 3. ORI: Obligasi Ritel Indonesia or Indonesian Retail Bond 7

8 2016 SECURITIES FINANCING REALIZATION Budget 2016 Realization (a.o. March 23, 2016) *(Million IDR) % Realization to Revised Budget 2016 Government Securities Net 327,224, ,262, % Government Securities Maturing in 2016 and Buyback 219,393,531 81,681, % Issuance Need for ,617, ,944, % Government Debt Securities (GDS) 154,497,132 Domestic GDS 105,854,132 -Coupon GDS 73,600,000 -Conventional T-Bills 15,500,000 -Private Placement 16,754,132 -Retail Bonds - International Bonds 48,643,000 -USD GMTN 48,643,000 -Euro GMTN - -Samurai Bonds - -Domestic GDS - Government Islamic Debt Securities 97,447,500 Domestic Government Islamic Debt Securities 64,510,000 - IFR/PBS/T-Bills Sukuk (Islamic Fixed Rated Bond/Project Based Sukuk) 30,510,000 - Retail Sukuk 31,500,000 - Private Placement 2,500,000 Global Sukuk 32,937,500 8

9 Divider title GOVERNMENT SECURITIES PERFORMANCE

10 GDS PRIMARY MARKET PERFORMANCE ,000 Incoming Bids Awarded Bids Foreign Incoming Bids Foreign Awarded Bids % Foreign Incoming Bids (RHS) 60% 80,000 70,000 Average incoming bids 2015 = Rp20.84T/auction as of March 15, % 60,000 40% 50,000 Average awarded bids 2015 = Rp10.59T/auction 30% 40,000 20% 30,000 10% 20,000 10,000 0% - -10% Average incoming bids 2016 = Rp27.41T, average incoming bids 2015 = Rp20.84T Average awarded bid 2016 = Rp14.58T while average awarded bid 2015 = Rp10.59 T

11 GS PRIMARY MARKET PERFORMANCE , ,000 Incoming Bids Awarded Bids Foreign Incoming Bids Foreign Awarded Bids % Foreign Incoming Bids (RHS) as of March 15, % 50% 80,000 Average Incoming Bid 2015= Rp14.05T Average Awarded Bid 2015 = Rp6.75T 40% 60,000 30% 40,000 20% 20,000 10% - Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb Mar-16 0% Average incoming bids 2016 = Rp20.31T, average incoming bids 2015 = Rp14.05T Average awarded bid 2016 = Rp10.14T, while average awarded bid 2015 = Rp6.75T

12 PRIMARY MARKET PERFORMANCE GLOBAL BONDS 2016 Summary Terms of Offering RI0126 RI0146 Issuer Republic of Indonesia Issuer Ratings BB+ positive (S&P), Baa3 stable (Moody's), BBB- stable (Fitch) BB+ positive (S&P), Baa3 stable (Moody's), BBB- stable (Fitch) Issue Ratings BB+ (S&P), Baa3 (Moody's), BBB- (Fitch) BB+ (S&P), Baa3 (Moody's), BBB- (Fitch) Issue USD fixed rate USD fixed rate Size USD ,00 USD ,00 Pricing / Settlement Date December 1 / December 8, 2015 December 1 / December 8, 2015 Maturity January 8, 2026 January 8, 2046 Coupon 4.75% payable semi annually 5.95% payable semi annually Reoffer Yield / Price 4.800% / % 6.000% / % Format Rule 144A/Reg S Rule 144A/Reg S Listing SGX-ST SGX-ST Total Book Order USD USD Distribution Indonesia 14%, Asia 10%, Europe 14%, USA 62% Indonesia 2%, Asia 22%, Europe 26%, USA 50% Investor Type Fund/Asset Managers 75%, Banks 18%, Private Banks 1%, Insurance/Pension Funds 4%, Central Banks/Sovereigen Funds 2% Fund/Asset Managers 71%, Banks 6%, Private Banks 1%, Insurance/Pension Funds 21%, Central Banks/Sovereigen Funds 1% 12

13 SECONDARY MARKET PERFORMANCE Activities of the domestic bonds are growing Yields of Benchmark Series steadily decrease [In Percentage] As of March 23, OUTRIGHT 5Y Y 15Y 20Y Mar'16 Dec'15 Jun'15 Sep'15 Mar'15 Sep'14 Dec'14 Jun'14 Mar'14 Dec'13 Jun'13 Sep'13 Mar'13 Dec'12 Jun'12 Sep'12 Mar'12 Sep'11 Dec'11 Jun'11 Mar'11 Dec'10 Jun'10 Sep'10 Mar'10 Dec'09 Jun'09 Sep'09 Mar' Spread (bid-ask) Jan-16 Feb-16 s.d 23 Mar'16 Turn Over 10 Y Government Bond As of March 23, Spread bps (ask bid 7.779) Bid Ask Spread 10 Y Government Bond As of March 23, 2016 REPO BI 7.39 (5Y), 7.74 (10Y), 8.20 (15Y), 8.24 (20Y) REPO BANK

14 YIELD GS ON PEER S MARKET LCY 10 Year Government Bonds Latest Yield YTD Change (BP) MTD Change (BP) [in percentage] 22 HK ID JP KR MY PH SG TH US VN Market Watch as of March 24, 2016 Source: Asian Bonds Online Mar '16 17 Mar '16 23 Feb '16 9 Feb '12 23 Sep '11 27 Oct '08 13 Sep'05 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y 20Y 30Y Source: IDMA, Bloomberg, as of March 23,

15 OWNERSHIP OF TRADABLE DOMESTIC GOVERNMENT SECURITIES (in trillion Rp) Description Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Jan-16 Feb Mar-16 Banks* % % % % % % % % Govt Institutions (Bank Indonesia**) % % % % % % % % Bank Indonesia (gross) % % % GS use for Monetary Operation % % % Non-Banks % % % % % % % % Mutual Funds % % % % % % % % Insurance Company % % % % % % % % Foreign Holders % % % % % % % % Foreign Govt's&Central Banks % % % % % % % Pension Fund % % % % % % % % Individual % % % % % % Others % % % % % % % % Total % % % 1, % 1, % 1, % 1, % 1, % 1) Non Resident are consisted of Private Bank, Fund/Asset Manager, Securities Company, Insurance Company, and Pension Fund. 2) Others such as Securities Company, Corporation, and Foundation. *) Including the Government Securities used in monetary operation with Bank Indonesia. **) net, excluding Government Securities used in monetary operation with Banks. 15

16 DOMESTIC INSTITUTIONAL INVESTORS % % Insurance Company % 21.77% 19.74% 20.71% 12.79% % 22.86% 23.58% 50% 40% 30% 20% 10% % % % Pension Fund % 19.7% 18.4% 16.9% % % 17.9% 50% 40% 30% 20% 10% Mar-14 Dec-14 May-15 Dec-15* 0% Dec-14 Feb-15 Jun-15 Dec-15* 0% Govt. Securities (GS) Bond Deposit Stock Mutual Funds Others Total Investment (in Trillion) % GS to Total Investment (RHS) Govt. Securities (GS) Bond Deposit Stock Mutual Funds Others Total Investment (in Trillion) % GS to Total Investment (RHS) 350 Mutual Funds 60% % 37% % 40% % % % 20% 25% 20% 20% 22% 23% 30% 20% % % Government Securities (GS) Deposit Bond Stock Others Total Investasi % SBN (RHS) Source: Financial Service Authority (OJK), data processsed *) unaudited 16

17 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 FOREIGN INVESTOR ACTIVITY Foreign Ownership - Proportion by Tenor Monthly Net Buyer (Seller) - Non Resident 100% [In IDR Trillion] As of March 23, Capital Inflows [LHS] capital inflows over foreign [RHS] % 44.46% 42.81% 43.94% 44.56% 44.00% 44.67% 45.33% 44.68% 45.16% 46.09% 46.60% % 40% 20% 38.13% 38.61% 39.63% 37.59% 37.10% 38.15% 38.21% 38.94% 38.98% 38.59% 32.54% 32.04% 33.58% 34.88% 36.18% 39.69% 36.98% 39.50% 38.98% 38.36% 37.78% 37.67% 12.88% 15.23% 12.92% 12.46% 11.43% 11.02% 12.30% 11.82% 11.89% 11.53% 10.79% 5.41% 3.73% 2.89% 2.34% 1.54% 1.51% 1.54% 1.28% 1.55% 1.57% 1.66% (10.00) (20.00) (30.00) (0.88) (19.98) 2.81 (1.76) (0.37) (19.84) (3.59) (3.90) (7.96) (2.30) % 5.20% 4.65% 5.38% 4.45% 3.33% 3.31% 3.85% 3.23% 3.04% 3.04% 3.28% Dec 13 Dec 14 Mar-15 Jun-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb Mar %Foreign Ownership of Total Foreign investors mostly dominated by high quality long term investors 17

18 Divider title CRISIS MANAGEMENT PROTOCOL & BOND STABILIZATION FRAMEWORK

19 Implement Measures to Manage External Volatility to mitigate sudden reversals Pre-emptive Measures Implementing Crisis Management Protocol (CMP) Implementing Bond Stabilization Framework (BSF) Enhancing coordination between government institutions and continuous dialogue with market participants First Line of Defense State s Budget State Owned Enterprises (BUMN) s Budget Bond Stabilization Framework Buyback fund at DG of Budget Financing and Risk Management Investment fund at Public Service Agency (BLU) (min. level Aware) Related BUMNs (min. level Aware) Specific policies in place to address crises enacted in 2016 budget law Social Security Organizing Agency (BPJS) s Budget BPJS (min. level Aware) Crisis Management Protocol Swap facility arrangements based on international cooperation Indicators to determine crisis level of Government Securities Market condition (normal, aware, alert, crisis) Several market indicators that are monitored daily: - Yield of benchmark series; - Exchange rate; - Jakarta Composite Index; - Foreign ownership in government securities Policies to address the crisis at every level : - Repurchase the government securities at secondary market - Postpone or stop the issuance Second Line of Defense State s Budget State Owned Enterprises (BUMN) s Budget Social Security Organizing Agency (BPJS) s Budget State General Treasury Account (Rekening KUN) (min. level Alert) Accumulated cash surplus (SAL) (min. Level Crisis) Related BUMNs (min. level Alert) BPJS (min. level Alert) 19

20 Divider title DEBT OUTSTANDING & RISK PROFILE

21 TOTAL DEBT MATURITY PROFILE AS OF END OF JANUARY, 2016 Maturity Profile of Central Government by Currencies (in trillion IDR) Domestic Foreign 44% 56% Foreign Domestic Maturity Profile of Central Government by Instruments (in trillion IDR) Loan Gov't Sec 24% 76% Gov't Sec Loan 21

22 OUTSTANDING CENTRAL GOVERNMENT DEBT BY INSTRUMENT Description Nominal % a. Foreign Loan (in billion USD) 68,6 68,4 63,6 58,4 53,9 54,2 54,5 24,2% Bilateral 42,3 42,1 37,2 31,5 26,7 24,5 24,8 11,0% Multilateral 23,2 23,5 23,8 23,7 23,5 26,1 26,0 11,6% Commercial 3,0 2,8 2,5 3,3 3,7 3,6 3,7 1,6% Suppliers 0,1 0,1 0,0 0,0 0,0 0,0 0,0 0,0% b Domestic Loan (in billion USD) 0,0 0,1 0,19 0,2 0,2 0,3 0,3 0,1% c. Government Securities (in billion USD) 118,4 131,0 140,8 136,3 155,2 170,1 174,9 77,9% Foreign Currency Denominated 18,0 21,6 27,4 32,8 36,7 44,3 46,9 20,9% Rupiah Denominated 100,4 109,4 113,4 103,5 118,5 125,8 128,0 57,0% Total Central Government Debt (in billion USD) ,0 199,5 204,5 194,9 209,4 224,6 229,7 Jan-16 Total Central Government Debt (in trilion IDR) 1.681, , , , , , ,6 Exchange Rate Assumption (IDR/USD1) 8.991, , , , , , ,0 GDP (in trillion IDR) 6.864, , , , , ,8 Debt to GDP Ratio 24,5% 23,1% 23,0% 24,9% 24,7% 26,8% Notes: * Preliminary Figures 22

23 OUTSTANDING CENTRAL GOVERNMENT DEBT BY CURRENCY Jan-16 Original Currency IDR (in trillion) 993, , , , , ,1 Gov't Securities 992, , , , , ,9 Loan 1,0 1,8 2,2 2,9 3,9 4,2 USD (in billion) 43,9 49,8 56,8 61,0 69,8 72,4 Gov't Securities 20,4 25,6 31,3 34,2 39,7 42,3 Loan 23,5 24,2 25,4 26,8 30,1 30,1 JPY (in billion) 2.589, , , , , ,0 Gov't Securities 95,0 155,0 155,0 155,0 255,0 255,0 Loan 2.494, , , , , ,0 EUR (in billion) 5,0 4,5 4,2 5,1 6,1 6,1 Gov't Securities ,0 2,3 2,3 Loan 5,0 4,5 4,2 4,1 3,9 3,9 Other currencies Equivalent in Billion USD Multiple Currencies IDR 109,5 113,5 103,7 118,8 126,1 128,3 57,1% USD 43,9 49,8 56,8 61,0 69,8 72,4 32,2% JPY 33,4 29,1 22,8 18,5 17,7 18,0 8,0% EUR 6,4 6,0 5,8 6,2 6,7 6,7 3,0% Other currencies 6,3 6,1 5,8 5,0 4,4 4,2 1,9% Total Eq. in Billion USD 199,5 204,5 194,9 209,4 224,6 229,7 Equivalent in Trillion IDR IDR 993, , , , , ,1 USD 397,9 481,9 692,0 758,3 963, ,3 JPY 302,5 281,2 278,3 229,8 243,6 249,4 EUR 58,5 57,5 71,1 76,9 92,1 93,1 Other currencies 57,1 59,1 70,2 62,4 60,0 58,7 Total Eq. in Trillion IDR 1.808, , , , , ,6 Foreign Currency Portion 45,1% 44,5% 46,8% 43,3% 43,8% 44,1% Exchange Rate Assumption USD/IDR , , , ,0 Notes: * Preliminary Figures 23

24 10.7% 10.6% 10.8% 9.9% 10.5% 9.9% 11.6% 10.5% 11.1% 11.8% 7.7% 7.2% 7.5% 6.7% 7.9% 6.8% 8.6% 7.5% 8.8% 7.8% CENTRAL GOVERNMENT DEBT RATIOS 30% 25% 20% 15% 10% 5% 0% 4% 3% 2% 1% 0% 24,5% 2.9% Debt to GDP Ratio 23,1% 23,0% Debt Service to GDP Ratio 3.2% 2.9% 24,9% 24,7% 3.5% 26,8% * 3.2% Interest Payment to Revenue and Expenditure Ratio Interest Payment to Tax Revenue & Central Government Expenditure Ratio 9% * * to Tax Revenue to Central Gov't Expenditure Notes: Using GDP at Current Market Prices [2010 Version] * Preliminary Figures 24 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 12% 12% 11% 11% 10% 10% * Interest to Revenue Interest to Expenditure

25 RISK INDICATORS Interest Rate Risk Exchange Rate Risk *) Variable rate ratio [%] Refixing rate [%] *) FX Debt to GDP ratio (%) **) FX Debt to total debt ratio (%) Average Time To Maturity Average Time To Maturity Debt Maturing Debt Maturing *) ATM (in years) *) in < 1 year (%) in < 3 year (%) in < 5 year (%) *) Preliminary figures Risk indicators are improving amidst pressure from rupiah depreciation Risk indicators show improvements in interest rate risk and stability in exchange and refinancing risks 25

26 Divider title END OF PRESENTATION Directorate General of Budget Financing and Risk Management Ministry of Finance of Republic of Indonesia Directorate of Government Debt Securities Frans Seda building, 4 th Floor Jl. Wahidin Raya No. 1, Jakarta Pusat Postal Code: Phone: Fax. : Website: