Make the most of the easy investment management through DBS Treasures, seize the opportunities of attractive coupon or yield, as the Credit Default Swap is predicted to stay stable until the end of this year1 . The ease of bond investment makes it an attractive diversification option for your investment portfolio. Among the available bonds on the market, the article will highlight government bonds. Government bonds tend to be safer than other types of bonds, and for now the focus will be on Obligasi Ritel Indonesia (ORI) and Sukuk Ritel (SR).
In this article, you can discover the ease of investing independently in government bond products; (1) deep dive into government bond products, and (2) easy tips in analysing bond products.
Deep Dive into Government Bond Products
As the safest category of bond investments (because the risk of default only exists if the country is declared bankrupt), it is also necessary to know the characteristics of these government bond products:
1. ORI (Obligasi Ritel Indonesia) Like other types of bonds, Obligasi Ritel Indonesia have a coupon rate, coupon period, and potential capital gains. Coupon rate is the interest rate offered by the bond issuer on the nominal amount of the listed bonds, which is usually expressed as an annual percentage. The coupon rate offered on this type of bond is in the form of a fixed rate coupon. The coupon term is the period determined by the bond issuer in making payments on the determined interest to bondholders. In ORI, coupons are paid monthly. Meanwhile, these bond products also offer the potential for capital gains, as they can be traded on the secondary market. Capital gain is obtained when the resale price of the bond is greater than the initial purchase price, and capital loss is when the selling price is less than the initial purchase price.
Coupon rate
Fixed
Coupon term
Monthly
Capital gain
Gain / loss
The newest ORI product on the market is ORI0202 , with a tenor of 3 years, due on October 15, 2024, coupon rate of 4.95% p.a, and 1 coupon payment minimum holding period on the 15th of each month.
2. SR (Sukuk Ritel) Sukuk Ritel is managed with sharia principles, and it can be traded in the secondary market between domestic investors. Among the available Sukuk Ritel in the market is SR0153 , with a yield of 5.10% p.a, monthly payout term, and with a tenor of 3 years.
Yield rate
Fixed
Yield term
Monthly
Capital gain
Gain / loss
Easy Tips in Analysing Bond Investment Products
After learning the characteristics of government bond products in general, there are also tips in selecting bond products:
1. Selection of coupon or yield value, term or tenor, coupon or yield period The coupon or yield value will determine the profit percentage that will be obtained from the purchase of the bonds. You can calculate the coupon or yield rate based to the term or tenor of the bond. Naturally, there is an option to resale the bonds if the profits to maturity are not optimised. The coupon or yield period determines when the bond issuer will make a payment to holders of the bond in the market. This is important, because if we expect a coupon or yield on the payment, then we must hold the bond until the nearest payment date. Now that the coupon value or yield, tenor, and coupon or yield period in bond investment have been explained, another thing to take note of is the term yield-to-maturity. In short, yield-to-maturity refers to the profit gained when investors hold the bonds until maturity.
2. Bonds Resale This is an exit option for bond buyers, where the selling price of bonds in the secondary market may be higher or lower than the purchase price. This option allows capital gains if the selling price is higher than the purchase price. Should you choose the option of holding bonds until maturity, and the initial value of the bonds purchased will be returned 100%. In the trade of bonds themselves, there are terms such as bonds sold/purchased at discount, par, and premium prices. An easy analysis on the sale of a bond is discount/par/premium4 , namely from the comparison of the market price of the bond and the principal nominal stated on the bond.
Market Price < Bond Principal Nominal
Discount
Market Price = Bond Principal Nominal
Par
Market Price > Bond Principal Nominal
Premium
Government Bond Investment with DBS Treasures
Bond investment through DBS Treasures can optimise your government bond transactions, as below:
Bonds issued by the government are bonds guaranteed by law. A wealth of term options, and available in two currencies: Indonesian rupiah and US dollars. As with bond investments in general, bondholders receive regular coupons or yield.
In addition to optimising the trade of government bonds, DBS Treasures also provides the following features and benefits of investing in ORI and SR:
Investors can buy and sell bonds before its maturity date, opening the possibilities of rising bond prices in the market.
The percentage of profit offered by bond issuers is above the average fixed deposit interest rate.
Bond transactions are free of additional fees.
Single Investor Identity (SID) registration and transactions of various bond products are available on the digibank by DBS Application anytime, anywhere.
How to Invest in Bonds with DBS Treasures
Enjoy the convenience and benefits of investing in bonds through DBS Treasures as a priority banking customer. With a minimum fund placement of IDR 500,000,000 as a priority banking customer, you also gain an intuitive wealth management strategy, so you can make the right move, at the right time, confidently.
Mari Diskusi bersama kami sekarang untuk mulai berinvestasi obligasi ritel.
