Yesterday’s postponement of the buyback auction by means of exchange (debt switch) made the prices of some Government Securities (SUN) strengthen. Debt switch is a government purchase of SUN series with a tenor of less than 3-years with low volatility. If a debt switch occurs, NHKSI Research projects that the government will buy series such as: FR0035 (1.2-year); FR0039 (2.4- year); FR0043 (1.3-year); FR0046 (2.3-year); FR0061 (1.1-year); and FR0063 (2.1-year). SUN which is less actively traded ahead of maturity are offered in exchange for SUN on the benchmark series. Trading benchmark SUN prices on Thursday (25/03) closed mixed, amid pressure from the Jakarta Composite Index (JCI). Pressure on the domestic stock market, due to negative sentiment on the re-rise of Covid-19 cases in a number of regions in the Continent of Europe. The benchmark 10-year yield of FR0087 rose 2.6 bps to 6.69% based on Bloomberg data.
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