The Central Statistics Agency reported that Indonesia’s economic growth in 2020 grew negatively, or contracted -2.07%. This figure is much lower than the previous year’s growth or expansion of up to 5.02%. Meanwhile, Indonesia’s economy in the 4Q20 period contracted -2.19% YoY. Accordingly, the domestic economy has contracted for three consecutive quarters. For the record, the last time Indonesia experienced an economic contraction was during the economic crisis in 1998. The majority of SUN prices closed higher in trading last Friday, in line with investor interest in safe haven instruments. 10-year benchmamrk yield to a level of 6.19%.
Pupuk Indonesia Offers IDR 2.5 Trillion Bonds. Pupuk Indonesia (Persero) is preparing to hold a Phase II Sustainable Bonds II offering worth IDR 2.5 trillion. Fund from debt securities issuance to repay (refinancing) bank loans and bonds debt. Fitch Ratings has assigned an AAA rating for Pupuk Indonesia’s latest bond issuance. This bond is part of the Shelf Registration Bond II which has a total ceiling of up to IDR 8 trillion. Fitch assessed that the Indonesian government’s support for Pupuk Indonesia was very strong. The Company regularly receives subsidies for the production and distribution of subsidized fertilizers. The allocation of fertilizer subsidies in the 2021 State Budget reaches IDR 25.3 trillion for the production of 8.2 million tons or around 14.4% of Indonesia’s total 2021 subsidy budget. In addition, food security is also one of the government’s priorities in 2021, with a budget allocation of IDR 99 trillion, up more than 20% from 2020. (Investor Daily)
Indonesia’s Foreign Exchange Reserves Touch USD 138 Billion. This foreign exchange reserve is the highest record in history. Bank Indonesia (BI) reported that foreign exchange reserves as of January 2021 amounted to USD 138 billion, or an increase from the previous month’s USD 135.9 billion. Foreign exchange reserves of USD 138 billion are the highest in Indonesia’s modern history. The previous record was set in August 2020, namely USD 137 billion. The increase in the position of foreign reserves in January 2021, continued the BI report, was mainly influenced by the issuance of government global bonds and tax revenues. The position of foreign exchange reserves is equivalent to financing 10.5 months of imports or 10.0 months of imports and servicing of government external debt, and is above the international adequacy standard of around 3 months of imports. (CNBC Indonesia)
Lack of Domestic Sentiment Colored the Trade This Week. On the other hand, market players are still watching the Enforcement of Public Activity Restrictions (PPKM) period II which will end on February 8, 2021. front. For the record, the number of positive cases of Covid-19 in Indonesia reached 1.15 million, while globally it reached 106 million. External sentiment is the progress of trimming the US fiscal stimulus package, which is worth USD 1.9 trillion. Meanwhile, other important data releases such as inflation in the US, China and India. Market participants can start looking at PBS027, PBS017, PBS029, PBS004, and PBS028. The five sukuk are series that will be offered at the Sukuk auction on Tuesday, February 9, 2021.