Government Bonds
A number of market players are interested in long tenor Government Securities (SUN), amid the potential for the domestic economy to erode again. Previously, the Minister of Finance had a discourse on extending the implementation of emergency Community Activity Restrictions (PPKM) for up to 6 weeks. SUN is considered a safe-haven instrument, amid potential economic pressures.

Corporate Bonds
Adhi Karya Issues IDR 673.50 Billion Bonds. PT Adhi Karya Tbk (ADHI) will offer Shelf-Registered Bonds III Phase II 2021 worth IDR 673.50 billion. Adhi Karya offers these bonds in two series. First, series A with a principal amount of IDR 200 billion, a fixed interest rate of 7.5% for a 370-day tenor. Second, Series B with a principal amount of IDR 473.5 billion with a fixed interest rate of 9.55% for a 3-year tenor. The Company has obtained a rating from the Indonesian Securities Rating Agency (Pefindo) idA-. (Liputan 6)

Minister of Finance: Emergency PPKM Up to 6 Weeks. The Minister of Finance (Menkeu) revealed that the scenario for the Implementation of Emergency Community Activity Restrictions (PPKM) could last up to 6 weeks. This was done to reduce the spread of COVID-19. The Minister of Finance explained that the increase in the number of Covid-19 cases would have an impact on Indonesia’s economic growth, which is estimated to be in the range of 4% to 5.4% in 3Q21. The projection is 4% for the severe scenario, while 5.4% is made for the moderate scenario. (CNN Indonesia)

Positive Sentiment Decline in UST Yield. The 10-year and 30-year UST yields fell 2 bps, to 1.33% and 1.96%, respectively. Market participants resumed buying UST ahead of the Fed’s semi-annual monetary policy report on Wednesday and Thursday. This positive sentiment also has the opportunity to support the Sukuk auction. In addition to the SPNS14012022 (0.5-year), the government offers the PBS027 series (1.8-year); PBS017 (4.3-years); PBS029 (12.7-years); PBS004 (15.6-years); and PBS028 (25.3-year) in today’s Sukuk auction.