Extension of PSBB Pressures the SUN Market. A number of market players have responded negatively to the DKI Jakarta government’s decision to extend the PSBB until 27 August. This decision, amidst the number of confirmed positive cases of Covid-19 in Jakarta, has become 27,863 cases. Investors also responded to the negative external sentiment, namely the absence of agreement on the US government’s stimulus. On the other hand, investors are relatively interested in short tenor government securities with 5-year tenors, recording a decrease in yield to the level of 5.84%. Meanwhile, BI is actively entering the SBN market as part of a burden sharing scheme between BI and the government. BI ownership in SBN increased to IDR 535.4 trillion as of August 12, or up 96% from the position at the beginning of the year valued at IDR 273.2 trillion.
Mayora Indah Issues IDR 500 Billion Bonds. Mayora Indah Tbk (MYOR IJ) offers bonds with a maximum emission target of IDR 500 billion. These emissions are part of PUB II with a total value of IDR 2 trillion. Mayora will issue 4 bond series, namely: Series A 370-day tenor; Series B 4-year tenor; Series C 5-year tenor; and a 7-year Series D tenor. Meanwhile, the proceeds from the bond issuance will be used to provide loans to Mayora Indah’s subsidiary, Torabika Eka Semesta, to finance working capital. The funds will be used for operational activities of the subsidiary, such as purchasing raw materials, packaging materials, and paying for other operational costs that may arise. The initial bond offering period will take place on 14-25 August 2020. Meanwhile, the public offering is scheduled for 2–4 September 2020. Protelindo’s ongoing bonds have an AA rating from the Indonesian Securities Rating Agency (Pefindo). These bonds also have no special guarantees. (Indonesian Business)
The 2021 RAPBN Accommodates Economic Uncertainty. The government is optimistic that the 2021 State Revenue and Expenditure Budget Draft (RAPBN) will accommodate economic uncertainties that occur. With this uncertainty, the poverty rate has increased in 2020. Fiscal policy plays a role when economic activity relatively stops due to enormous uncertainty. The government has prepared a posture to accommodate assistance to the poor, with the amount of social assistance continuing to increase. At the same time, assistance for Micro, Small and Medium Enterprises (UMKM) will also be provided. The government is still preparing for additional uncertainty, therefore the deficit (APBN) is widened, even though it is still lower than the 2020 deficit. If in 2020 it is 6.34% then in 2021 this will remain in the context of fiscal discipline even though the expenditure does not decrease. (Investor Daily)
Investors Pay Attention to PBS028. The increasing number of positive cases of Covid-19 has made PSBB re-implement in the Jakarta area. This policy made the rupiah exchange rate weaker. Yesterday, the rupiah closed 0.1% lower at IDR 14,775/USD on the spot market. Meanwhile, BI’s middle rate weakened 0.7% to IDR 14,877/USD. The movement of the rupiah yesterday was also in the midst of awaiting the president’s budget accountability speech. From the external side, the waiting for the results of the congressional meeting and the US government regarding the pandemic stimulus package will weigh on the US dollar. This can provide a little positive sentiment for the movement of the rupiah. Investors can start to watch PBS028, ahead of the Sukuk auction next Tuesday. In the previous auction, the government was aggressively winning the long tenor PBS028 worth IDR 5 trillion (bid to cover ratio) from the bid to enter this series worth IDR 9.7 trillion.