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Investigating Factors Affecting Investor Decision to Sell Indonesia Government Retail Bonds Portfolio

In: The Finance-Innovation Nexus: Implications for Socio-Economic Development

Author

Listed:
  • Ahmad Danu Prasetyo
  • Taffy Ukhtia Panduputri
  • Prawira Fajarindra Belgiawan
  • Yunieta Anny Nainggolan
  • Subhan Noor
  • Riky Candra
  • Sri Putri Siregar
  • Yuddy Hendranata

Abstract

Government bonds are debt securities issued by the central government, where investors are to receive returns in the form of an annual coupon rate periodically. This leads investors tend to hold their portfolio after purchasing due to the guaranteed returns of the government bonds. However, another strategy for gaining returns is to sell the eligible portfolios in the secondary market. This research aims to investigate the factors behind investors’ decisions whether to sell their government retail bonds portfolio and the length of their portfolio hold days. Towards a secondary dataset of existing government retail bonds investors in Indonesia and secondary market rate, logistic regression analysis was employed to inspect their selling decisions, while the decision tree classification method investigated their hold days. Results show that both the decision to sell bonds portfolio in the secondary market and the period of hold days are highly affected by its comparative return performance towards other investment alternatives, represented by excess returns. This study contributes to the behavioural finance field by answering the lack of investigation for investors’ selling decisions, particularly for government retail bonds, which will enhance the understanding of portfolio rebalancing in portfolio management studies.

Suggested Citation

  • Ahmad Danu Prasetyo & Taffy Ukhtia Panduputri & Prawira Fajarindra Belgiawan & Yunieta Anny Nainggolan & Subhan Noor & Riky Candra & Sri Putri Siregar & Yuddy Hendranata, 2024. "Investigating Factors Affecting Investor Decision to Sell Indonesia Government Retail Bonds Portfolio," International Symposia in Economic Theory and Econometrics, in: The Finance-Innovation Nexus: Implications for Socio-Economic Development, volume 34, pages 73-89, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:isetez:s1571-038620240000034006
    DOI: 10.1108/S1571-038620240000034006
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    More about this item

    Keywords

    Decision tree; excess return; logistic regression; government bonds; SBN retail; E62; G41; H63;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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