Chinese Economic Data Positive, encouraging strengthening earlier in the week. Prices of all benchmark series Government Securities (SUN) closed higher on Monday (19/10). This increase continues the strengthening trend last week, in line with the positive data on China’s economic growth released yesterday. FR0082 is the benchmark SUN which recorded the deepest drop in yield, dropping 8 bps to 6.64%. Then, it was followed by FR0081 which fell 7.8 bps to the level of 5.51%. Data on China’s gross domestic product (GDP) in 3Q20 recorded a positive growth of 4.9% YoY. However, under market consensus it grew 5.2%. However, the Chinese economy recorded an expansion from the previous quarter which grew 3.2%. This growth indicates China’s economy is approaching pre-pandemic levels. China’s economic recovery will provide hope for the Indonesian economy, along with the potential to increase demand for goods and services from China.

Tunas Baru Lampung Accelerates MTN Repayment of IDR 411 Billion. Palm oil producer Tunas Baru Lampung Tbk (TBLA) paid the IDR 411 billion medium term note (MTN) obligation. Payment of the debt securities is faster than the maturity date. For the record, TBLA issued MTN on 15 December 2017 with a coupon of 9.5% and a 3-year tenor. Regarding performance, TBLA earned an increase in operating income by 37.86% to IDR 5.68 trillion in 1H20, compared to the same period last year IDR 4.12 trillion. The management of TBLA said that the increase in revenue was obtained from the growth in revenue from related parties to IDR 2.12 trillion and third parties which was recorded at IDR 3.56 trillion. However, the net profit attributable to the owner of the parent company decreased by 10.58% from IDR 359.13 billion to IDR 321.11 billion. (Investor Daily)

Budget Deficit of 4.16% of GDP. The Ministry of Finance (Kemenkeu) noted that during the January-September 2020 period, the 2020 State Budget (APBN) deficit reached IDR 687.5 trillion. This deficit is equivalent to 4.16% of Indonesia’s gross domestic product (GDP). Ministry of Finance data shows that the deficit has reached 65.6% of the year-end outlook of IDR 1,039.2 trillion. Meanwhile, when compared to the realization in the same period in 2019, namely IDR 252.41 trillion, the January-September 2020 deficit grew 170.2%. In terms of state revenue, the realization during January-September 2020 amounted to IDR 1,159 trillion, equivalent to 68.2% of the APBN-Perpres 72/2020 target of IDR 1,699.9 trillion. This realization also recorded a negative growth of 13.7% when compared to the realization in January-September 2019 which amounted to IDR 1,342.25 trillion. The condition of state revenue in the past nine months needs to be watched out for. This is because the percentage of weakening is already above the year-end state revenue target, which is predicted to be only minus 10% year on year (yoy). (Kontan)

China’s GDP and US stimulus, colors the SUN auction. The release of Chinese economic data, which was below market consensus, depressed the rupiah exchange rate yesterday. Meanwhile, investors are keeping a close watch on plans for the United States (US) to launch stimulus before the upcoming presidential election. Today, the government will again hold a SUN auction with a target of up to IDR 20 trillion absorption. Of the seven series that will be auctioned, one of them is the new series SPN03210121 (New Issuance). The rest of the reopening series are SPN12210701, FR0086, FR0087, FR0080, FR0083, and FR0076. Investors can watch the FR0087 and FR0080 in this auction. For the record, the two series recorded high incoming bids, which reached IDR 15.4 trillion and IDR 10.3 trillion respectively in the previous auction. Early in the week, the rupiah closed down 0.07% lower at IDR 14,708 / USD on the spot market. Meanwhile, BI’s middle rate strengthened 0.16% to IDR 14,741 / USD.

-REVIEW (Okt. 19, 2020)-
FR0081 (5yr): -7.8 Bps to 103.99 (5.51%)
FR0082 (10yr): -8.0 Bps to 102.55 (6.64%)
FR0080 (15yr): -1.7 Bps to 102.13 (7.26%)
FR0083 (20yr): -4.6 Bps to 102.15 (7.29%)

FR0086 (6yr): -4.2 Bps to 99.74 (5.55%)
FR0087 (11yr): -2.7 Bps to 98.47 (6.70%)

UST 2yr: +0.004 point to 0.14%
UST 5yr: +0.013 point to 0.33%
UST 10yr: +0.025 point to 0.77%
UST 30yr: +0.032 point to 1.56%
German Bund 10yr: -0.007 point to -0.62%
UK Gilt 10yr: -0.013 point to 0.16%

CDS 2yr: +0.37% to 41.84
CDS 5yr: -4.34% to 94.28
CDS 10yr: +0.18% to 160.28

WTI: -0.12% to USD40.83/Barrel
BRENT: -0.72% to USD42.62/Barrel
Source: Bloomberg