Indonesia delays Panda Bond debut as Chinese investor demand surges
In a press briefing in Jakarta on Friday, Purbaya said additional time was needed to allow several financial managers and major banks in the country to complete internal investment approval processes before the bonds were issued.
“Apparently, (investor interest) increased. Some major fund managers and banks were late in learning, so they asked us to postpone it slightly so they had time to submit their proposals to their investment committees,” Purbaya said.
He explained that the government’s higher-than-expected investor enthusiasm was the main reason for adjusting the schedule for the issuance of the yuan renminbi-denominated bonds.
The minister viewed the request as a positive signal of high Chinese investor interest in the Indonesian financing instrument. Therefore, the government chose to provide additional time to optimize investor participation.
“I think it’s good. It means there’s a strong interest, so I postponed it until the end of July,” Purbaya added.
By delaying the issuance schedule, the number of participating investors is expected to increase, enabling the funds raised to meet the set target.
In addition to the increased interest from fund managers, Purbaya revealed that several large financial institutions in China have also begun to show interest in participating in the Panda Bond issuance.
Several banks have also requested the opportunity to act as underwriters to help expand the marketing of Indonesian debt securities in the Chinese market.
“Some of them have also asked to act as underwriters so they can issue more. I said next time I’ll allow them to act as underwriters so that more of our bonds can be sold there,” he said.
The government sees the Panda Bond issuance as part of a strategy to diversify state financing sources while expanding the international investor base beyond traditional markets, which have been dominated by US dollar-denominated instruments.
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Translator: Bayu Saputra, Cindy Frishanti Octavia