Indonesia plans its first-ever dimsum, kangaroo bonds this year
[JAKARTA] Indonesia is planning to sell bonds denominated in the Chinese yuan and Australian dollar for the first time ever, as the government seeks to diversify its debt portfolio.
The government will 'strongly consider' to sell dimsum and kangaroo bonds this year, subject to market conditions, Suminto, head of the finance ministry's debt management office, told reporters on Friday (May 23).
The move may help Indonesia lower its exposure to volatility in the US dollar, while potentially helping it strengthen financial ties with China – its biggest trading partner. A successful bond issuance in diverse foreign currencies will demonstrate growing investor confidence in Indonesia and its financial system.
It reflects an effort to reduce reliance on traditional funding currencies such as the US dollar and euro, and tap a new pool of investors, said Wee Khoon Chong, senior Apac market strategist at BNY. 'Typically, the choice of bond issuance is demand-led.'
Indonesia's plan comes as governments around the world are exploring ways to diversify away from US dollar bonds as volatility remains elevated in US markets. South Korea issued its first-ever kangaroo debt last year.
Foreign-denominated bonds typically make up less than 20 per cent of the Indonesian government's debt issuance – primarily denominated in US dollars. The announcement comes just hours after Indonesia priced a 103.2-billion yen, multi-tranche samurai bond deal on Friday. BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
AsiaOne
an hour ago
- AsiaOne
China rejects Trump's accusation that it breached Geneva trade deal, World News
China said on Monday (June 2) that US President Donald Trump's accusations that Beijing had violated the consensus reached in Geneva trade talks were "groundless", and promised to take forceful measures to safeguard its interests. The comment by the commerce ministry was in response to Trump's remarks on Friday that China had breached a bilateral deal to roll back tariffs. The ministry said China had implemented and actively upheld the agreement reached last month in Geneva, while the US had introduced multiple "discriminatory restrictive" measures against China. Those measures included issuing guidance on AI chip export controls, halting sales of chip design software to China and revoking visas for Chinese students, the ministry added. "The US government has unilaterally and repeatedly provoked new economic and trade frictions, exacerbating uncertainty and instability in bilateral economic and trade relations," the ministry said in a statement. It did not elaborate on what forceful measures it might take in response. Beijing and Washington agreed in mid-May in Geneva to pause triple-digit tariffs for 90 days. In addition, China also promised to lift trade countermeasures that restricted its exports of the critical metals needed for US semiconductor, electronics and defence production. Trump on Friday also announced a doubling of import tariffs on steel and aluminium to 50 per cent. While China is the world's largest steel producer and exporter, it ships very little to the United States after a 25 per cent tariff imposed in 2018 shut most Chinese steel out of the market. China ranks third among aluminium suppliers. [[nid:717864]]
Straits Times
an hour ago
- Straits Times
Global airlines body Iata cuts traffic and profit forecasts for 2025 amid trade turbulence
Mr Willie Walsh, director-general of the International Air Transport Association, called for the aviation sector to be spared from increased tariffs. PHOTO: BLOOMBERG – Global airlines on June 2 revised down their traffic and profit forecasts for 2025, citing 'headwinds' for the global economy. The International Air Transport Association (Iata) estimates fewer than five billion air journeys will take place this year, compared with the previously forecast 5.22 billion. 'The first half of 2025 has brought significant uncertainties to global markets,' Mr Willie Walsh, Iata's director-general, told its annual general meeting in New Delhi, India. At the same time, the industry is benefiting from lower oil prices, which are in turn trimming airlines' fuel bills – the biggest single expense for carriers. Mr Walsh added: 'Considering the headwinds, it's a strong result that demonstrates the resilience that airlines have worked hard to fortify.' Cumulative airline profits will reach US$36 billion (S$46.5 billion) in 2025, US$600 million less than expected, IATA said. Commercial aviation revenues are expected to remain below the US$1 trillion forecast in the previous December projections, with IATA now reporting US$979 billion. Mr Walsh, addressing Iata delegates, called for the aviation sector to be spared from increased tariffs – though he did not name US President Donald Trump, who launched a trade war in early April. In 2024, the industry earned a collective US$32.4 billion on a margin of 3.4 per cent. Mr Walsh said profitability remains 'wafer thin': 'Any new tax, increase in airport or navigation charge, demand shock or costly regulation will quickly put the industry's resilience to the test. 'Policymakers who rely on airlines as the core of a value chain that employs 86.5 million people and supports 3.9 per cent of global economic activity, must keep this clearly in focus.' The organisation also expects 69 million tonnes of cargo to be transported by air in 2025, down from the 72.5 million previously expected. Airlines – particularly in the United States – have been forced to scale back their outlooks in recent weeks after price-sensitive passengers reconsidered their travel plans and some high-profile accidents discouraged bookings. In March, Delta Air Lines slashed its first-quarter profit guidance and also reduced its outlook for revenue growth and operating margin. That was a sharp reversal from the start of2025, when it saw a steady demand environment. Mr Walsh said in an interview with Bloomberg Television that he remains optimistic, considering some of the events restraining growth are 'short-term in nature'. 'It won't have a long term impact on the growth in the industry,' Mr Walsh said. 'Demand for aviation, demand for flying, will remain strong.' AFP, BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
2 hours ago
- Business Times
New World's distress worsens after shock delay on bond interest
[HONG KONG] Hong Kong developer New World Development is sliding deeper into distress after jolting investors by delaying interest payments on some bonds, marking the latest flashpoint in a years-long crisis in China's property market. New World, which is grappling with HK$210.9 billion (S$272 billion) of liabilities, said in a filing late on Friday (May 30) that it's planning the deferment for coupons on four perpetual notes. In total, that means it's postponing US$77.2 million of debt obligations, according to Bloomberg calculations. The bonds concerned slid to record lows. Its 6.15 per cent perpetual notes dropped about 3 US cents to 23 US cents on the US dollar after tumbling more than 30 US cents on Friday, on pace for its lowest level since issuance. Its 4.8 per cent perpetual securities fell 10 US cents to 15.5 US cents, also on track for a record low and the biggest daily decline since October 2022. Its shares slid as much as 11 per cent, the biggest intraday drop in about two months. 'While this will not trigger a default, the total amount to be repaid will pile up so the headwind should remain in the long run,' said Jeff Zhang, an analyst at Morningstar. A company spokesperson said on Friday that the company was continuing 'to manage its overall financial indebtedness whilst taking into account the current market volatility and continues to comply with its existing financial obligations'. While the market moves on Monday underscore how investor unease is worsening, there have also been some more positive developments for the builder, which is controlled by the family empire of tycoon Henry Cheng. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Bloomberg reported earlier Monday morning that as at May 30, the company had received written commitments from banks for 60 per cent of HK$87.5 billion of loan refinancing that it's seeking by the end of June, according to sources familiar with the matter. New World did not immediately respond to a request for comment on Monday morning. The company also said on Friday that total contracted sales year-to-date amount to about HK$24.8 billion, representing over 95 per cent of the annual sales target, according to its monthly business update. But markets clearly need more certainty on debt repayment plans after a years-long property slump in the city and mainland China has left New World with one of the highest debt burdens of any Hong Kong developer. Investors have also become increasingly sceptical after New World reported its first loss in 20 years for the financial year that ended last June. The company's stock is trading at a price-to-book ratio of just 0.06, with a market capitalisation of US$1.4 billion versus about US$17 billion at its peak in 2019. BLOOMBERG
