ORI (Indonesian Retail Bonds): Definition, Characteristics, Benefits, and Risks

Bonds are one of the investment options that are in great demand by investors. Bond provide benefits in the form of interest received by investors on a regular basis every predetermined period of time. Bonds are also considered to have a lower investment risk when compared to bonds stock investment, where the stock price is volatile.

Bonds as an investment instrument have various types, while if you look at the issuer, bonds can be divided into 3 types. This type of bond is a bond issued by the government (government bonds), company (corporate bonds), and local government (municipal bonds). Bonds issued by the government are often an investment option sought by many people.

The reason why there are so many people looking for bonds issued by the government is because these bonds are known to have very minimal risk, especially since these instruments are guaranteed by the state. One of the bonds issued by the Indonesian government is ORI or Indonesian Retail Bonds. Lots of people are waiting for this latest series of bonds.

Reporting from Indonesia Stock Exchange official website, ORI 2022 series ORI022 will be published or hold an offer period from September 26 to October 20, 2022. The previous ORI series, ORI021 has an offer period from January 24 to February 17 2022.

Do you want to know more details about ORI? Check out the discussion regarding the definition, characteristics, benefits, investment methods, and this list of ORI (Indonesian Retail Bonds) partners!

Definition of ORI

ORI stands for Indonesian Retail Bonds. ORI is one of the State Securities (SBN) assets offered to Indonesian Citizens (WNI) through Distribution Partners in the Primary Market.

This investment instrument has a special naming code that indicates the series to how many bonds are offered to the public. For example, ORI 021 is used for the 21st ORI series issued by the government and transactions are carried out automatically online through e-SBN.

ORI as an investment product has the form of bonds, namely debt securities that provide returns in the form of interest or bond coupons for investors. This interest will be paid every month in the same amount. That way, even if the securities market fluctuates, ORI interest will still be paid at the same value.

The advantages that investors can get other than interest are: capital gain, where investors can earn profits from the sale of ORI in the secondary market by transactions with other investors.

The principal value of the bonds will be paid at maturity and guaranteed by law. The ORI coupon series ORI021 which was issued yesterday has a value of 4,9% wherein the coupon still needs to be deducted by 10% tax. For this reason, the net coupon for ORI series ORI021 is approximately 4,41%. ORI coupon payments are made on the 15th of every month.

ORI features

Bonds have special characteristics and characteristics that distinguish ORI from other securities instruments. The following are the characteristics of Indonesian Retail Bonds (ORI)

• Coupons or fixed value bonds (fixed-rate)
• ORI has a scriptless form (scriptless) and can be traded with domestic investors when it is in the secondary market
• ORI sales have the potential to earn capital gain nor risk capital loss
• The minimum purchase is IDR 1 million and the maximum is IDR 2 billion

10 ORI Investment Benefits

ORI investment is loved by many people because it is known for its security and minimal risk offered. The following are the advantages of investing in ORI.

• Interest or coupons are paid regularly every month
• Coupons with the same interest rate (fixed-rate) to maturity
• The interest offered is higher than the interest on state-owned bank deposits
• Interest and principal guaranteed by law
• ORI can be traded in the Secondary Market (ORI can only be traded to Indonesian citizens)
• Investors can have the opportunity to earn capital gain
• May be loaned or pledged to other parties (depending on distribution partner's policy)
• ORI can be traded at organizedOTC with Electronic Trading Platforms (AND P)
• There is a purchase price quote (bid price) from Distribution Partners
• Buying ORI means that investors support national development financing

How to Invest ORI

Are you interested in investing in ORI products? Currently, ORI offers can be made quickly, safely, and easily by offering this product online with e-SBN. In addition, the government together with the Financial Services Authority (OJK) are currently collaborating with various distribution partners and payment channels to facilitate bond offering transactions. Reported from Ministry of Finance, here's how to invest ORI

Registration

Registration to buy ORI can be done at any time, even before the offer time opens. Potential investors can register in the digital system provided by ORI Distribution Partners by inputting data. The information asked includes personal data, phone number, Single Investor Identification (SID), Fund Account number and Securities Account number. SID or Single Number Investor Identity is a special code issued by the Indonesian Central Securities Depository (KSEI). Potential Investors who do not have an SID number, Fund Account, or Securities Account can discuss with the Distribution Partner where the potential investor registers.

Booking

After carrying out the registration process, potential Investors can place an ORI order which previously the prospective investor must read the terms and conditions in the Information Memorandum. ORI orders can only be made during the ORI offer period.

Pembayaran

After the order is verified, potential investors will get a code billing via email or sms (according to Distribution Partner policy). Potential investors can also make payments with this code through the Perception Bank (Plate, ATMs, internet banking, mobile banking) and other perception agencies within the specified time limit.

Confirmation

After making the payment, the potential investor will receive an NTPN (State Revenue Transaction Number) and a notification that the ORI order has been completed. Prospective investors will receive an ORI allocation on the specified issuance date. After the issuance of securities, investors can request proof of ownership of ORI from Distribution Partners. 

ORI Investment Risk

In addition to the considerable benefits, the Ministry of Finance also presents a few risks that bondholders may experience when investing in ORI. The following are the risks in ORI investment

Market Risk

One of the risks of ORI investment is market risk. Market risk for ORI investment products is the risk of loss when ORI prices fall in the Secondary Market. Potential market risk will arise when investors sell bonds before maturity.

Liquidity Risk

Similar to market risk, liquidity risk will arise when investors sell bonds before maturity. That way, investors may find it difficult to sell ORI at fair value in the Secondary Market.

ORI Distribution Partner and ORI Payment Channel

As the name suggests, ORI which stands for Indonesian Retail Bonds are bonds issued by the government and can be traded through distribution partners (retail).

ORI distribution partners in yesterday's ORI021 series were 18 banks, 3 securities companies, 3 companies fintech peer to peer lending, and 4 companies fintech APERD (Mutual Funds Selling Agent).

Banking partners serving ORI distribution include Bank BNI, Bank BRI, Bank Mandiri, Bank BCA, OCBC NISP, and other well-known banks. The three securities companies that serve ORI distribution are Trimegah, BRI Danareksa, and Mandiri securities.

Then, 3 fintech peer-to-peer lending  distribution partners are Investree, Koinworks, and Modalku. Lastly, 4 companies fintech APERD participating in offering ORI are Bibit, Tanamduit, Fundtastic, and Bareksa. 

In addition, payments for ORI can now be made more easily. Payment of this investment instrument can be through various channels that have been facilitated by various banking institutions and other perception institutions (of course with the approval of the government together with OJK).

The ORI payment channel consists of 89 banks/posts/perception institutions including 4 perception institutions namely BukaLapak, Pos Indonesia, Tokopedia, Finnet, and Taxku.

ORI is often an attractive option for investors who want minimal risk for their investment. The breadth of distribution channels and the ease of payment offered make this investment product more affordable for the public. Are you interested in investing in one of these investment instruments with minimal risk?

Reference:

Slide Marketing ORI021 from the Ministry of Finance's Official Website

Details of the Investment ORI021 Coupon Simulation from the Ministry of Finance's Official Website

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