Foreign investors support SUN market at the beginning of the week. This selective action of buying foreign investors is ahead of the US presidential election on November 3, 2020. Market players expect market volatility and global uncertainty to subside so that if the election goes well, interest in risk on investment will increase. This causes capital inflow to emerging markets, especially Indonesia. This week, the Indonesian capital market has only been running for two days, causing the benchmark SUN price to close mixed. Market players are interested in the medium tenor FR0080, which offers a yield that is still above the 7% level. This 15-year benchmark SUN, recorded a decline in yield of more than 4 bps to 7.15%. Meanwhile, yield on 10-year benchmark SUN rose 1 bps to 6.60%.

IIF Issues IDR 1.5 Trillion Bonds. Indonesia Infrastructure Finance (IIF) issues IDR 1.5 trillion bonds. Meanwhile, the funds obtained from the PUB Sustainable Bond I Phase II will be used by the company to pay off all the outstanding Series A Bonds from the PUB Sustainable Bond I Phase I and the rest will be used by the company for expansion. The bond issuance is part of the PUB I Indonesia Infrastructure Finance with a principal amount of IDR 3 trillion. Based on the company’s financial report, total assets until 1H20 reached IDR 12.08 trillion or a decrease of 1.86% YtD. However, net loans increased 22.92% YtD to IDR 7.66 trillion. The decline in total assets was mostly influenced by the company’s cash and cash equivalents, which fell 68.65% YtD to IDR 761.37 billion. In terms of liabilities or liabilities, Indonesia Infrastructure Finance recorded a decrease of 1.75% YtD to IDR 9.98 trillion. Thus, total equity reached IDR 2.10 trillion or a slight decrease of 2.37% YtD. (Investor Daily)

The Government Decides the Minimum Wage Does Not Increase. This was explained by the Minister of Manpower through this Circular Letter Number M / 11 / HK.04 / 2020 concerning the Determination of the Minimum Wage in 2021 during the Corona Virus Disease 2019 (Covid-19) Pandemic. The letter contains considerations of Indonesia’s economic conditions during the Covid-19 pandemic and the need for national economic recovery, asked the Governor to make adjustments to the determination of the value of the Minimum Wage in 2021 to the value of the 2020 Minimum Wage. 26 October 2020. Furthermore, the 2021 minimum wage will officially be determined and announced by all local governments at the end of October 2020. (Kontan)

Foreign Investors Opportunity to Interested in Sukuk Auction. Positive domestic sentiment, likely to encourage foreign investor interest, and surpass previous auctions. NHKSI Research sees that, although domestic investors will still dominate, the share of foreign investors will also increase, making the bid for the auction this time likely to reach IDR 30 trillion to IDR 40 trillion. For the record, the government will offer as many as five series with an indicative target of IDR 10 trillion. The five series are: SPNS14042021 6-month tenor, PBS027, PBS026, PBS025, and PBS028. Foreign investors are watching the domestic bond market, as the economy recovers, increased liquidity and attractive yields. This positive domestic sentiment is supported by the continuing downward trend in low interest rates by central banks in the world until the middle of next year.

-REVIEW (Okt. 26, 2020)-
FR0081 (5yr): +0.1 Bps to 104.17 (5.46%)
FR0082 (10yr): +1.1 Bps to 102.85 (6.60%)
FR0080 (15yr): -4.3 Bps to 103.11 (7.15%)
FR0083 (20yr): +0.7 Bps to 102.78 (7.23%)

FR0086 (6yr): +0.6 Bps to 99.86 (5.52%)
FR0087 (11yr): -1.1 Bps to 99.30 (6.59%)

UST 2yr: -0.006 point to 0.15%
UST 5yr: -0.025 point to 0.35%
UST 10yr: -0.041 point to 0.80%
UST 30yr: -0.049 point to 1.59%
German Bund 10yr: -0.004 point to -0.58%
UK Gilt 10yr: -0.005 point to 0.27%

CDS 2yr: +2.60% to 38.75 (as of Oct. 23)
CDS 5yr: -0.92% to 94.00 (as of Oct. 23)
CDS 10yr: +1.75% to 162.89

WTI: -3.23% to USD38.56/Barrel
BRENT: -3.13% to USD40.46/Barrel
Source: Bloomberg