Government Bonds
The government has extended the Implementation of Community Activity Restrictions (PPKM) level 4 in a number of regions until August 9, 2021. This has made market participants again carry out selective buying of State Securities (SBN). IHS Markit reported that manufacturing activity fell to 40.1 from 53.4 previously. Indonesia’s manufacturing PMI contracted, post-expansion for the 8th month in a row.

Corporate Bonds
Pegadaian Bonds and Sukuk Achieve idAAA Rating. Pegadaian (Persero) received idAAA ratings for its two bonds and one sukuk from the Indonesian Securities Rating Agency (Pefindo). Pegadaian received a rating of idAAA for its Shelf-Registered Bonds IV Phase II Year 2020 Series A, and Shelf-Registered Bonds I Phase I Year 2011 Series C. Then, it was assigned an idAAA(sy) rating for Sukuk Mudharabah I Phase III Year 2020 Series A. Pegadaian’s readiness to pay off debt securities This is supported by monthly internal cash flows of around IDR 11 trillion, and unused banking facilities of around IDR 12.3 trillion. (Bisnis Indonesia)

Manufacturing Purchasing Managers’ Index Drops to 40.1. Indonesia’s manufacturing sector contracted in July amid an increase in Covid-19 cases, leading to PPKM Level 4 and greater restrictions on population mobility. The effect of this condition is two-fold as the economic recovery is stalled along with slowing demand, production, and employment figures. Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) released by IHS Markit fell to a level of 40.1 in July from 53.5 in June. (Bisnis Indonesia)

Contract Manufacturing Avoid Risky Assets. On the other hand, market participants have the opportunity to return to interest in safe haven instruments. Today, a total of five fixed rate series are offered in the SUN auction. In addition to SPN12211104 (Reopening), and SPN12220527 (Reopening); The government again offers FR0090, FR0091, FR0088, FR0092, and FR0089. As for external sentiment, also came from the growth of the US manufacturing sector which slowed in July. The ISM said that the US national factory activity index fell to 59.5; or the lowest number since January.