US & European Markets Managed to Close Last Week in Positive Territory

US & European markets managed to close last week in positive territory, as Treasury yields consolidated and investors digested a number of economic data, which managed to slightly erase global concerns over the rising interest rate trend that is likely to last until the end of the year. The S&P Global Composite PMI (Feb.) released last Friday concluded that US economic is entering an expansionary zone at 50.1 ( an increase from the previous month’s 46.8); supported by high growth in Services PMI (Feb.) at 50.6 (exceeding forecast of 50.5 & Jan. data at 46.8). US Treasuries halted its rally as the 10-year yield left the 4%, dropping to 3.960%, from Thursday’s high of 4.091%. The 2-year yield, also contracted 4.3 bps to 4.859%.

The expansion in Eurozone business activity was also reflected in their Composite PMI (Feb.) figure, which crept up to 52 (vs. the previous 50.3); as was noticeable in PMI growth in France, Germany, and the UK. Germany’s Trade Balance (Jan.) managed to pocket a surplus of EUR 16.7 billion, much higher than the EUR 11 billion forecast or the previous month’s EUR 10 billion. However, Eurozone government bond yields are still hovering around yearly highs after their CPI data boosted market expectations that the ECB will bring the benchmark interest rate peak to 4%. The benchmark 10-year German government bond is at 2.688%, the highest level since 2011. Asian stock markets were also green on the back of optimism for China’s economic growth as reflected in the Caixin Services PMI data (Feb.) which rose to 55 (stronger than forecast 54.7 & Jan. position at 52.9). Japan managed to tame its Inflation rate to 3.3% YoY (Feb.) from 4.3% (Jan.), a 40-year high.

Corporate News
A Subsidiary of Sarana Menara Nusantara Issues IDR 2.9 Trillion Bonds PT Sarana Menara Nusantara Tbk (TOWR), through its subsidiary, PT Profesional Telekomunikasi Indonesia (PRTL) or known as Protelindo, issued Protelindo Phase III Sustainable Bonds in 2023 with a principal amount of IDR 2.9 trillion. Based on information disclosure to the Indonesia Stock Exchange (IDX) on Sunday (5/3/2023), these bonds consist of two series. For details, the amount of the series of bonds offered is IDR 2.76 trillion with a fixed interest rate of 6.35% per year. The term of series A bonds is 370 calendar days from the date of issuance. Meanwhile, the amount of series B bonds offered by this subsidiary of Sarana Menara Nusantara is IDR 145.35 billion with a fixed interest rate of 6.60% per year. The term of series B bonds is three years from the date of issuance. After deducting issuance costs, all funds obtained from the proceeds of the ongoing public offering of Protelindo Sustainable Bonds III Phase II Year 2023 will be used to pay off and partially repay the company’s bank debt. (Liputan6)

Domestic Issue
IDX: IDR 16.73 T in Bond and Sukuk Issuances Throughout 2023 The Indonesia Stock Exchange (IDX) recorded that in 2023, there were 14 bond and sukuk issuances from 13 issuers worth IDR 16.73 trillion. With this listing, the total bond and sukuk emissions recorded on the IDX are 516, with an outstanding nominal value of IDR 450.86 trillion and USD 47.5 million, issued by 126 issuers. The amount of Government Securities (SBN) listed on the IDX is 188 series with a nominal value of IDR 5,436.54 trillion and USD 452.11 million. There are also 8 EBA issuances worth IDR 3.27 trillion. (Investor Id)

Recommendation
US10YT stopped its rally and left the 4% psychological level around the first Support, MA10/3.956%. The Bearish Engulfing Candle that occurred in the resistance (psychological) area at the time of RSI Overbought is very likely to indicate a further pullback toward the second Support: MA20 / 3,886-3,956; However, there is no significant risk that will end this short-term Uptrend. ADVISE: set your Trailing Stop, and take profit accordingly. ID10YT rallied steadily through the 7% psychological resistance to 7.083%, the highest yield so far this year. Although the RSI has entered the Overbought territory, the Uptrend looks strong; therefore, it is not urgent to take profit yet. There is a high probability that ID10YT will head towards its TARGET yield in the 7,189-7,202 area as an upside result of the PARALLEL CHANNEL pattern (blue) downtrend break. ADVISE: set your Trailing Stop, and let your profit run.

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