China released data on January inflation which fell 0.3% on an annual basis. This figure indicates that the purchasing power of the Chinese people is again being depressed. This condition is in line with the discovery of new cases of the Covid-19 virus at the end of January 2021. Although annual Chinese inflation has decreased, it will continue to rise to 1% on a monthly basis in January 2021. A number of market players have also responded to domestic sentiment, bearing the case of the Covid-19 virus in Indonesia. The Ministry of Health noted that the number of positive patients with Covid-19 reached 1,174,779 people. The average addition of new patients was 11,602 people per day, a decrease compared to the average of the previous two weeks. Yesterday, investors were relatively interested in short tenors compared to long tenors, in anticipation of the stock exchange holiday tomorrow. The 10-year tenor SUN yield stood at 6.26%.
Oversubscribed IDR 2 Trillion PNM Bonds. Microfinance State Owned Enterprises (BUMN), Permodalan Nasional Madani (Persero) or PNM is in the process of initial bidding for sustainable bond bookbuilding with a target fund of IDR 666.2 billion. The bonds were oversubscribed by more than IDR 2 trillion. This bond is the fifth phase of the PNM Sustainable Public Offering (PUB) III with a total issuance of IDR 6 trillion. The last time PNM issued bonds was in December 2020 with an issuance value of IDR 1.73 trillion. This is Sustainable Bonds III PNM Phase IV Year 2020. These bonds are issued in three series, namely series A amounting to IDR 904.8 billion and coupon of 6.5%, with a 370-day tenor. Then series B of IDR 537 billion with an interest rate of 7.5% and a 3-year tenor. Finally, series C is worth IDR 292 billion with an interest rate of 8.75% and a 5-year tenor. (CNBC Indonesia)
BI Bought IDR 35.72 Trillion SBN. Throughout this year until February 4, the central bank has purchased Government Securities (SBN) from the primary market reaching IDR 35.7 trillion. This amount includes purchases through the main auction of IDR 13.1 trillion and through green shoe options of IDR 22.6 trillion, bringing the total to IDR 35.7 trillion. Due to this development, the position of SBN ownership by the central bank until February 4, 2021 reached IDR 908 trillion. The purchase of SBN refers to the agreement letter with the minister of finance (menkeu) on April 16, 2020. Based on the agreement letter that was extended to December 31, 2021, BI purchases SBN based on market mechanisms. (Investor Daily)
Decline in Risk Profile Boosts Interest in Long Tenors. Indonesia’s 5-year Credit Default Swap (CDS) is at the level of 67.22, or better than the January 2021 period which was around level 70.This better investment profile, is likely to encourage investor interest in longer tenors, providing yield rate is more attractive. Yield is a reference for investors’ profit in the debt securities market compared to price because it reflects the coupon, tenor and risk in one number. Investors are increasingly optimistic that Indonesia’s economy will recover, even though it does not fully recover like the era before the Covid-19 virus. Investors can start to look at FR0088, FR0083, and FR0089, which are medium and long tenors that have the opportunity to be offered at the SUN auction next week