FR0081 and FR0082 undersupply, after the two reference series began not being offered at the SUN auction this week. Based on data from the Directorate General of Financing and Risk Management (DJPPR), the new series FR0086 (6-year) and FR0087 (11-year) begin to replace the reference series FR0081 and FR0082 in the auction of Government Securities (SUN) tomorrow (11/08) tomorrow. Not being offered the two series, has the opportunity to make FR0081 and FR0082 undersupply, amidst high investor interest. The release of Indonesia’s Gross Domestic Product (GDP) data, which has been expected by a number of market players, has made the demand for SUN auction tomorrow will be strong. Apart from that, investor optimism was also supported by Indonesia’s economic conditions which contracted less deeply than neighboring countries. For the record, the government managed to absorb IDR 22 trillion worth of incoming bids worth IDR 72.8 trillion in the previous SUN auction.

As many as 5 Listed Debt Securities in a Week. A total of four bonds and one sukuk mudharabah were listed last week, namely: Dharma Satya Nusantara Tbk (DSNG IJ); Indomobil Finance Indonesia; Bussan Auto Finance; and Waskita Karya Tbk (WSKT IJ). Along with the listing of the five series of bonds, the total recorded issuances of bonds and sukuk throughout 2020 were 50 issuances from 35 companies. Total emissions this year are worth IDR 39.28 trillion. Meanwhile, total issuances of bonds and sukuk listed on the IDX totaled 439 issuances with an outstanding value of IDR 423.17 trillion and USD 47.5 million. Meanwhile, there were 96 series of SBN valued at IDR 3,177.01 trillion and USD 400 million.

Stimulus to Boost Economic Growth. Disbursement of stimulus as the key to pushing Indonesia out of economic contraction. This absorption acceleration will simultaneously trigger economic growth. Previously, BPS released data on Indonesia’s GDP which contracted -5.32% which was at the same time predicted earlier, due to the Covid-19 pandemic. Economic contraction, but no inflation as the government quickly provided social assistance that maintained people’s purchasing power. To support this, the provision of stimulus to micro entrepreneurs (MSMEs) must be given quickly and not be complicated, will revive the community’s economy. To date, the total PEN stimulus has reached IDR 695.2 trillion, by transferring IDR 238.9 trillion from the total PEN budget into social assistance.

Foreign investors are interested in long tenors, after the yield offer in Indonesia tends to be low. Foreigners are interested in the higher yields in the long tenor series. Investors can observe FR0080 and FR0083, apart from FR0081 and FR0082 which are beginning to experience undersupply. The positive domestic sentiment comes from the cash assistance policy in Indonesia which will boost people’s purchasing power. Investors are also watching Indonesia’s foreign exchange reserves which have again set record highs, which have the opportunity to strengthen the rupiah exchange rate earlier this week. Based on Bloomberg data, the rupiah closed 0.27% lower at IDR 14,625/USD on the spot market. Meanwhile, BI’s middle rate weakened 0.41% to the level of IDR 14,647/USD.


Foreign Exchange Reserves Reach USD 135.1 Billion

Bond Credit Rating in A Week

Stimulus Pushes Gross Domestic Product

-REVIEW (Aug. 7, 2020)-
FR0081 (5yr): +0.5 Bps to 102.69 (5.85%)
FR0082 (10yr): +1.2 Bps to 101.63 (6.77%)
FR0080 (15yr): +0.1 Bps to 102.38 (7.23%)
FR0083 (20yr): +0.1 Bps to 101.31 (7.37%)

UST 2yr: +0.013 point to 0.13%
UST 5yr: +0.018 point to 0.23%
UST 10yr: +0.028 point to 0.56%
UST 30yr: +0.036 point to 1.23%
German Bund 10yr: +0.022 point to -0.51%
UK Gilt 10yr: +0.030 point to 0.13%

CDS 2yr: +0.45% to 45.02
CDS 5yr: -2.14% to 115.28 (as of Jul. 31, 2020)
CDS 10yr: +0.34% to 174.30

WTI: -1.74% to USD41.22/Barrel
BRENT: -1.53% to USD44.40/Barrel
Source: Bloomberg