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Analyst: The government should set SBR008 minimum coupon lower than ST005

03 September 2019 06:48

JAKARTA. Analysts suggest that the government should lower the minimum coupon for SBR008 which will soon be issued. If not, investors may move their funds from deposits to retail government securities (SBN).

Desmon Silitonga, Research Analyst at Capital Asset Management, said that if the government set the SBR008 coupon at the same level as ST005, there were concerns that the migration of funds from deposits to retail SBN would increase. This can disrupt banking liquidity, which in the last few years has started to find difficulties in obtaining third party funds (DPK).

"Even though some banks have started to reduce deposit interest rates as a form of adjustments to BI monetary policy," he said on Monday (2/9).

He also estimated that the minimum coupon of SBR008 would be at least 7%. This means that there will be a decrease of 40 bps compared to ST005 and 50 bps when compared to SBR007.

Judging from the current 2-year SUN yield movement, Desmon assessed that the SBR008 minimum coupon is still very attractive to investors. The reason is, there is still a fairly wide margin between the two instruments, with the condition that the government is setting SBR008 minimum coupon not lower than 7%.

Not only that, SBR008 is believed to still be superior compared to deposits from the yield side. This is supported by the yield tax of SBR008 which is only 15% or lower than deposits which reached 20%. Not to mention, the risk of SBR008 is also low because it is guaranteed by the government. (AM/AR)

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