The Central Statistics Agency (BPS) recorded that Indonesia’s exports in February 2021 were valued at USD 15.2 billion, growing by 8.5% YoY. This made Indonesia’s trade balance surplus again. On the other hand, the growth in imports after falling for 19 months in a row due to the Covid-19 pandemic has actually been the driving force for the increase in yield on trading SUNs earlier this week. The growth in imports indicates a sign of recovery in the domestic economy which is beginning to stretch. For government securities (SUN) market players, the economic recovery in Indonesia has the opportunity to make investors release bonds, which are safe haven assets, and begin to switch to riskier assets such as stocks. The benchmark 5-year and 10-year SUN yields closed at 5.82% and 6.71%, respectively, based on data from NH Korindo Sekuritas Indonesia.

Tunas Baru Lampung Offers Coupons of Up to 8%. Tunas Baru Lampung Tbk (TBLA) will issue UDS 400 million bonds, equivalent to IDR 5.6 trillion. Tunas Baru Lampung will issue this bond with a 5-year tenor or at another agreed time. The company said that the indicative interest rate is in the range of 6% to a maximum of 8%. The value of this global bond issuance is equivalent to 95.8% of TBLA’s equity as of December 2020 with the exchange rate at the end of last year of IDR 14,105 per US dollar. Meanwhile, Tunas Baru will use these bond funds to: First, buy back or pay off or pay guaranteed senior notes of USD 250 million with 7% interest issued by TBLA International and will mature in 2023. Second, pay off TBLA bonds debt of IDR 1 , 5 trillion, which is part of the Sustainable Bond Phase I Tunas Baru Lampung and will mature in 2023 and 2025. Third, reduce TBLA’s short-term debt. (Kontan)

Trade Balance Surplus USD 2 Billion. The Central Statistics Agency (BPS) recorded Indonesia’s trade balance surplus of USD 2 billion on a monthly basis in February 2021. This realization was higher than the surplus of USD 1.9 billion in January 2021, but still lower than the surplus of USD 2.3 billion in February 2020. In total, Indonesia’s accumulated trade balance surplus reached USD 3.9 billion in January-February 2021. The value was higher than the USD 1.8 billion surplus in January-February 2020. BPS said that the trade balance surplus occurred because the export value reached USD 15.2. billion in February 2021 or down 0.19% from USD 15.3 billion in January 2021. Annually, the value increased by 8.5% from February 2020. Meanwhile, the import value reached USD 13.2 billion. Its value was down 0.4% from USD 13.3 billion in the previous month. However, on an annual basis it is still up 14.8%. (CNN Indonesia)

High Yield Expectations and the Wait for BI 7-DRRR. This sentiment will color today’s SUN auction, offering series FR0086, FR0087, FR0088, FR0083, and FR0089; as well as SPN03210616 and SPN12220303. Investors are still watching the high yield on UST and Indonesia’s trade balance surplus as well as the recovery in Indonesia’s import levels. The increase in Indonesia’s imports indicates a signal of recovery in the domestic economy, potentially making investors more interested in investing in stocks rather than safe-haven bonds. As for the previous review of SUN auction, both the results of the SUN auction (02/03) and the Green Shoe Option auction (03/03), in total did not meet the minimum indicative target set by the government of IDR 30 trillion.