The previous bond auction preview (31-Mar): rebounding demand as expected, with foreign bids accelerating. Demand in the conventional bond auction on 31-Mar rebounded as expected, with the total incoming bids improving to Rp58.2tn (vs. Rp50.9tn in the previous auction; YTD average: Rp70.4tn). This was in line with our forecast range of Rp50tn-60tn. The increase was driven by both the SPN and FR series. The demand for Treasury bills (SPN) series rose to Rp12.5tn (vs. Rp8.8tn previously; YTD average: Rp17.2tn). Meanwhile, demand for fixed-rate (FR) series also increased to Rp45.7tn (vs. Rp42.2tn previously), although it was still below the YTD average per auction of Rp53.2tn.
By series, demand was concentrated in the 5-yr FR109 and 10-yr FR108, which recorded bids of Rp19.9tn and Rp12.2tn, respectively (vs. Rp10.8tn and Rp14.7tn in the previous auction), accounting for 34.2% and 21% of total bids. According to DMO data, both offshore and onshore bids rebounded, with domestic investors continuing to dominate overall demand. Onshore bids also increased to Rp50.9tn (vs. Rp47.8tn previously; YTD average: Rp64tn), while offshore bids rose, doubling to Rp7.4tn (vs. Rp3.1tn previously; YTD average: Rp6.4tn). Note that the awarded portion to foreign investors remained high at Rp5.4tn, equivalent to around 73.5% of the total offshore bids (vs. 49.9% previously; YTD average: 51.3%).
The previous bond auction result (31-Mar): higher cost of funds, with shortening tenors. In line with the increasing demand, the government issued Rp40tn, above the new initial target of Rp36tn and higher than the Rp34.1tn issued in the previous auction. The weighted average cost of funds increased to 6.49% (vs. 6.25% previously), while the average tenor shortened to 9.91 years (vs. 14.16 years). Including the latest sukuk auction issuance, the total gross SBN issuance has reached Rp506.1tn YTD, equivalent to 32.3% of the FY2026 APBN financing target.
Domestic banks continued to play a central role in primary market activities. Based on DMO data, in the last conventional bond auction on 31-Mar, we estimate that onshore banks maintained their dominance, securing Rp12.7tn (31.8% of total issuance). This was followed by insurance companies and pension funds (Rp11.7tn or 29.1%), other investors (Rp5.9tn or 14.8%), mutual funds (Rp5.8tn or 14.6%), foreign investors (Rp3.2tn or 8.1%), retail investors (Rp0.4tn or 1%), and other investors (Rp0.3tn or 0.7%). Furthermore, on a year-to-date basis, cumulatively, onshore banks have continued to be the largest net buyers of conventional bonds in the primary market, with Rp107.9tn (or 47.7% of total bond issuance).
Including secondary market transactions, insurance & pension funds emerged as the largest net buyers (+Rp69.9tn), followed by onshore banks (+Rp42tn), Bank Indonesia (+Rp36.1tn), and mutual funds (+Rp21.4tn). Meanwhile, retail investors, foreign investors, and other investors became net sellers, posting -Rp144.9tn, -Rp22.4tn, and -Rp20.6tn, respectively, according to DMO data with settlement date as of 10-Apr-2026.
Insurance companies and pension funds emerged as the largest net buyers (+Rp56.9tn), followed by onshore banks (+Rp37.5tn), other investors (+Rp34.1tn), Bank Indonesia (+Rp31.5tn), mutual funds (+Rp18.2tn), and retail investors (+Rp12.1tn, mostly from primary retail bond issuances). Meanwhile, foreign investors remained the only net sellers (-Rp29.4tn; settlement date: 27-Mar-2026).
Auction preview (14-Apr): demand is likely to continue growing. We expect that demand will likely continue growing, within a range of Rp70tn-80tn, following some factors: 1) The liquidity projection in the banking system is still ample and has reached Rp89.5tn as of 13-Apr (vs. Rp83.8tn in the previous conventional bond auction on 31-Mar). There will be Rp134.5tn of maturing bond series (coming from the maturity of FR0086 series), and there is coupon payment this week totaling Rp37.6tn. 2) The rupiah against the USD remained stable a day before the bond auction. However, we also see an awarded amount trend in SRBI auctions, with an increasing weighted average yield awarded, and this might negatively affect the bids in today s bond auction.
We forecast the fair yields for the bond series to be auctioned today as follows: 4.90% (range: 4.85-4.95%) for the 1-mo SPN, 5.30% (range: 5.25-5.35%) for the 3-mo SPN, 5.50% (range: 5.45-5.55%) for the 1-yr SPN, 6.29% (range: 6.24-6.34%) for the 4.9-yr FR109, 6.58% (range: 6.53-6.63%) for the 10-yr FR108, 6.70% (range: 6.65-6.75%) for the 14.3-yr FR106, 6.67% (range: 6.62-6.72%) for the 19.3-yr FR107, 6.84% (range: 6.79-6.89%) for the 28.3-yr FR102, and 6.85% (range: 6.80-6.90%) for the 38.3-yr FR105.
Handy Yunianto
