Today’s Outlook:
The US central bank is still staunchly on the hawkish path, as reported by the comments of two Federal Reserve officials who cautioned that US Core Inflation has not budged and rate hikes are still necessary as US Inflation is still far from their target of 2%. Traders are now pricing in the possibility of the Fed cutting rates in December, following an expected 25 bps rate hike at the July FOMC Meeting, as reported by CME Group Fedwatch Tool. A survey from University of Michigan showed that market sentiment and expectations are improved, with expectations of consumer price inflation falling to its lowest point this June and the outlook over the next five months improved significantly. Moreover, the US capital markets will be closed on Monday for a national holiday.
The Bank of Japan maintained its ultra-loose monetary policy, and China’s central bank began to cut borrowing costs. Meanwhile, after the ECB voted to raise its benchmark interest rate by 25 basis points last week; ECB President Christine Lagarde emphasized that there are no plans to stop this trend of rising interest rates. Gold prices found support as the US Dollar Index trended to a 5-week low below 103. However, analysts believe that the US Federal Reserve may still raise the benchmark interest rate two more times this year.
Corporate News
Hary Tanoe’s Issuer (BMTR) Releases Bonds Global Mediacom Tbk (BMTR), an issuer owned by Hary Tanoesoedibjo, issued sustainable bonds IV and sustainable sukuk ijarah IV in 2023. The total value of these debt securities reached IDR 1.7 trillion. Global Mediacom held a sustainable public offering (PUB) IV phase I with a maximum bond issuance of IDR 850 billion. The bonds are divided into three tenors, namely 370 calendar days, 3 years, and 5 years. Bond coupons are in the range of 8.75-9.25% for the 370-day tenor, 9.75-10.25% range for 3 years, and 10.75-11.25% for 5 years. Bond interest is paid every quarter, in accordance with the bond interest payment date. (Investor Id)
Domestic Issue
Multifinance Industry Getting More Aggressive in Issuing Bonds Multifinance companies are getting more aggressive in issuing bonds. This step is taken to boost financing, which has increased, as the domestic economy recovers. PT Pemeringkat Efek Indonesia (Pefindo) noted that until May 2023 there will be seven multifinance companies that will issue bonds. The emission value is estimated at IDR 6.6 trillion. “Among them are Mandala Multifinance Tbk and Adira Dinamika Multifinance,” said Ahmad Nasrudin, Fixed Income Analyst Pefindo. Meanwhile, until May 2023, the value of debt securities issuance, including bonds in the multifinance industry, has reached IDR 13.51 trillion. Ahmad said that this figure is around 49.87% of the bond issuance carried out by multifinance companies throughout 2022 and the value of bonds issued by multifinance companies is also higher than that realized by issuers in other industries. (Kontan)
Recommendation
US10YT is almost at the end of the pattern, where it has to decide whether YIELD will break Resistance 3.83% or break Support 3.74%. ADVISE: Wait & See; wait for the breakout direction for Average Up decision or even reduce position.
ID10YT is still at rest moving in a downtrend, where MA10 acts as the nearest Resistance in the range of yield: 6.46%. ID10YT almost touched the lowest Yield level in October & August in the range: 6.144% – 6.036% which may be able to become a Support level as RSI has entered Oversold territory. ADVISE: Hold; Wait & See.
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