Yield FR0091 is below 7%. Investors responded positively to the August BI 7DRRR survey, which remained at 3.50%. Bloomberg data project that the BI 7DRRR in August will remain at 3.50%. NHKSI Research sees that the government is still maintaining the momentum of economic growth, taking advantage of BI’s low interest rates. The government is optimistic that FY22E GDP will grow +5.2%, after 1Q22 and 2Q22 grew 5.01% YoY and 5.44% YoY, respectively.
Corporate Bonds
EXCL: Approved for Right Issue. The EGMS of PT XL Axiata Tbk (EXCL) approved capital addition through a rights issue of a maximum of 2,750,000,000 new shares at a par value of IDR100 per share. The Company revealed that this corporate action can strengthen the capital structure in order to develop its business activities. (Emiten News)
Domestic Issue
State Budget Surplus at IDR 106 Trillion in July 2022. The Minister of Finance said that the state budget until July 2022 once again recorded a positive performance. This is reflected in the state budget which is back to a surplus of IDR 106.1 trillion or 0.57% of gross domestic product (GDP). This realization made the state finances in a surplus for seven consecutive months since January 2022. This APBN surplus occurred due to state revenues which reached IDR 1,551 trillion or grew 50.3% YoY, higher than the realization of expenditures at IDR 1,444.8 trillion as of July 31, 2022. (CNN Indonesia)
Recommendation
Producer level deflation, confirms that Consumer level inflation has reached its peak. US Final Demand PPI July MoM posted -0.5% deflation (Vs. Jun. +1.0%), as Headline CPI eased to 8.5% (Vs. Jun. 9.1) over the same period. Gasoline demand sloped in the summer, pushing the average retail price below USD4/Gallon or the lowest level since March 2022, while keeping US inflation under control. For the record, the price of gasoline had reached a record USD5.02/Gallon last June. The PPI and CPI ramps up bets on the Futures market, that the September FFR rises by +50Bps (Vs. Prev. +75Bps).
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