New Trends in Sovereign Financing: Indonesian Islamic Bond Auction Attracts Less Capital, but Bidding Enthusiasm Rises

⑴ On Tuesday, the Indonesian Ministry of Finance raised 8.85 trillion rupiah (approximately $496 million) from an Islamic bond auction, which is below the indicative target of 12 trillion rupiah. ⑵ The auction included three Islamic Treasury bills and five project bonds, with weighted average yields as follows: 6.20000% for the note maturing in July 2026, 6.40000% for the November 2026 maturity, and 6.68000% for the March 2027 maturity. ⑶ For the project-based Islamic bonds, the yield for the July 2028 maturity was 6.68857%, November 2030 maturity at 6.69714%, June 2039 maturity at 6.84870%, April 2043 maturity at 6.79546%, and December 2049 maturity at 6.90830%. ⑷ Although the amount raised fell short of the target, total bids reached 26.05 trillion rupiah, higher than the previous auction on May 19, which had 18.8 trillion rupiah in bids, indicating growing market enthusiasm.