What is Bond?
Bonds are debt security consist of statement of debt from debtor to creditor, including agreement to pay off the principal with its coupons in a pre-determined time.
Laws of the Republic of Indonesia number 24 of 2002
Government Bonds are securities in the form of debt acknowledgement letters denominated in Rupiah and foreign currencies, that are guaranteed interest and principal payments by the Republic of Indonesia, in accordance with the validity period.
Type of bonds
1. Government Bonds
The government has officially lowered the income tax rate (PPh) on bond interest earned by local investors to 10%. Click here for more information
The Letter of Debt issued by the Government of the Republic of Indonesia which is available in either Rupiah and US Dollar whereas the payment of its principal and coupon is guaranteed under Law by the Government of the Republic of Indonesia in terms of its maturity.
2. Government Bonds Retail
Government bonds for retail investors are investment products issued by the government and sold to individual Indonesian citizens (WNI) through a Selling Agent. Consists of 2 types, namely conventional and sharia, for conventionally known as Obligasi Negara Ritel (ORI) dan Savings Bond Ritel (SBR). While the types of sharia are Sukuk Negara Ritel (SR) dan Sukuk Negara Tabungan (ST).
Click Here for Government Bonds Retail Form
Bonds Product
| Product Name | Product Info |
|---|---|
| Sukuk Tabungan Seri ST006 | Product info click here |
| Sukuk Tabungan Seri ST005 | Product info click here |
| Sukuk Tabungan Seri ST004 | Product info click here |
Benefits
Government Bonds issued by the Government of the Republic of Indonesia are guaranteed by Law No. 24 tahun 2002, where the Government shall guarantee the payment of coupons payments along with the amount of capital invested at its maturity.
Generally coupons are offered higher than the average deposit interest rate of State owned Bank.
The periodic income in a form of coupon rate which will be transferred directly to customer’s account which appointed in the beginning.
Customers / investors can withdraw Bonds according to market prices at any time. Except for Sukuk Tabungan Bonds (ST) and Saving Bond Ritel (SBR), customers / investors can process bond selling and buying transactions through the secondary market mechanism.
Capital gains opportunities if the bonds are sold at a price greater than the selling price after calculating the transaction costs in the secondary market.
Risks
1. Market Risk
Risk of changes in interest rate: when interest rate increases, bonds price would depreciate and investors might suffer potential capital loss.
2. Liquidity Risk
Risk that may arise when the bond cannot be sold in secondary market.
Important notes
Maybank Indonesia only acts as a Selling Agent. This information is only a summary of information on product features and characteristics, therefore cannot be considered as a complete product information document. Please contact our Relationship Manager to get more information.
Investments in bonds are not included in the Government Deposit Guarantee Program (LPS). This information is only a general information and should not be regarded as an offer, recommendation, request for any transaction or hedging, trading or investment strategy, related to any securities or financial instruments.
This information is only a general evaluation, that does not take into account the investment objectives, financial situation, the particular needs of individuals or certain parties, and is not prepared specifically for individuals or certain parties.
Trading foreign currencies carries the risk of foreign exchange market movement. You are required to read and understand the transaction risks before doing transactions with the Bank. The Bank is not responsible for any losses that may be incurred from the decision you have taken.
Investment in Bonds has Market Risk, Interest Rate Risk, Liquidity Risk, Credit Risk, and other risks, including the possibility of losing the entire principal of the Bond investment. Investors are required to read and understand all risk factors, fees and other details that arise before deciding to invest in bonds.
Past performance of bonds is not entirely an indication of future performance, this is because the price of bonds can be determined from market conditions, country conditions and other factors.
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