OTC Bonds

Debt Securities (Bonds)

Debt Securities (Bonds) are one of the Securities listed on the Exchange alongside other Securities such as Shares, Sukuk, Asset Backed Securities and Real Estate Investment Funds. Bonds can be grouped as debt securities alongside Sukuk. Bonds can be described as transferable medium to long term debt securities, which contain a promise from the issuing party to pay compensation in the form of interest over a certain period and repay the principal at a predetermined time to the party purchasing the bond. Bonds can be issued by corporations or the state.

A. Primary Market
A market that trades securities for the first time before being listed on the Stock Exchange

 

 

B. Secondary Market
A market that trades securities after they are listed on the Stock Exchange

 

 

Types of Debt Securities and Sukuk

To date, there are several debt and sukuk securities that can be cleared at KPEI, including:

1. Corporate Bonds, namely bonds issued by National Private Companies including BUMN and BUMD.

2. Sukuk are Sharia Securities in the form of certificates or proof of ownership that have the same value and represent an inseparable or undivided share (syuyu'/undivided share) of the underlying assets.

3. Government Securities (SBN) are Government Securities consisting of Government Debt Securities and State Sharia Securities. Government Debt Instruments (SUN) are securities in the form of debt acknowledgment letters in rupiah or foreign currency which are guaranteed to be paid interest and principal by the Republic of Indonesia in accordance with their validity period. Provisions regarding SUN are regulated in Law Number 24 of 2002 concerning Government Debt Securities. State Sharia Securities (SBSN) or State Sukuk are state securities issued based on sharia principles, as proof of participation in SBSN assets, both in rupiah and foreign currency. Provisions regarding SBSN are regulated in Law Number 19 of 2008 concerning State Sharia Securities.

4. Asset-Backed Securities (EBA) are debt securities issued with Underlying Assets as the basis for the issuance.

Benefits of Buying Debt Securities

The following are the advantages of buying Debt Securities, including:

1. Receive periodic coupons/fees/ratios from purchased debt securities. In general, the coupon/fee/ratio rate is above the Bank Indonesia interest rate (BI rate).
2. Obtain capital gains from selling debt securities in the secondary market.
3. It has relatively lower risk compared to other instruments such as shares, where share price movements are more fluctuating than the price of debt securities. Debt securities issued by the government can be said to be risk-free instruments.
4. There are many choices of debt securities series that investors can choose from in the secondary market.