FR0082 at Par. A number of investors responded positively to the attractive yield spread between FR0082 and UST 10-years which reached 640 bps. Market participants take selective buying action, pushing FR0082 closed at the level at par in trading Wednesday (07/22) yesterday, based on Bloomberg data. In addition to the continuing low interest rate trend, monetary stimulus from the central banks of developed countries, made investors interested in bonds that still offer high yields. In addition to Indonesia’s attractive SUN yields, concerns about financing the budget deficit are also reduced, along with the burden sharing policy between the government and BI. On the other hand, foreign investors as the largest portion of SBN ownership, are still watching a number of global geopolitical risks and the realization of Indonesia’s domestic fiscal.

Bank BTN Issues Continuous Bond IV Coupon 8.90%. Bank Tabungan Negara Tbk (BBTN IJ) has again carried out a continuous public offering (PUB) Phase IV Bonds worth IDR 1.5 trillion this year. The bonds are offered with a coupon range of 6.25% to 8.90%, consisting of three series. The 370-day Series A tenor has a coupon indication of 6.25% -7.15%; Series B 3-year tenor coupon indication 7.40% -8.40%; and Series C 5-year tenors with a coupon indication between 7.90% -8.90%. The coupon indications are more attractive than the same tenor SUN, namely the 1-year tenor has a yield of 4.79%; 3-year 6.05%; and 5-year SUN have a yield of 6.45%. Meanwhile, the funds from the issuance are to strengthen the development of the housing finance business.

Investment Realization Decrease. BKPM recorded investment realization in the 2Q20 period valued at IDR 191.9 trillion, down 4.3% YoY. Meanwhile, the 1H20 investment realization period amounted to IDR 402.6 trillion or slightly up compared to the same period the previous year IDR 395.6 trillion or up 1.8%. In detail, the realization of domestic investment (PMDN) in 2Q20 was valued at IDR 94.3 trillion, down 1.4% YoY. Meanwhile, the realization of foreign investment (PMA) for the same period was IDR 97.6 trillion, down 6.9% YoY. BKPM considers the Covid-19 pandemic to have helped to reduce investment realization during this period, making employment absorption levels also low.

Economic Improvement Optimism. Market participants are still responding positively to the discovery of the corona virus vaccine, and a number of industrial sectors have reopened. Meanwhile, the rupiah exchange rate is projected to strengthen as the need for the US dollar gradually decreases. Dividend payments have decreased and the index dollar has also fallen. Yesterday, the rupiah exchange rate in the spot market strengthened 0.65% to a level of IDR 14,650 / USD. Meanwhile, the BI middle rate strengthened 1.06% to the level of IDR 14,655 / USD. Investors can watch FR0082, FR0080, and FR0083 supported by investor interest in attractive yields and high liquidity.


-REVIEW (July 22, 2020)-
FR0081 (5yr): -8.9 Bps to 101.54 (6.12%)
FR0082 (10yr): -8.8 Bps to 100.57 (6.91%)
FR0080 (15yr): -11.4 Bps to 101.25 (7.35%)
FR0083 (20yr): -9.3 Bps to 100.92 (7.40%)

UST 2yr: +0.009 point to 0.15%
UST 5yr: +0.010 point to 0.27%
UST 10yr: -0.003 point to 0.59%
UST 30yr: -0.016 point to 1.29%
German Bund 10yr: -0.030 point to -0.49%
UK Gilt 10yr: -0.015 point to 0.11%

CDS 2yr: -1.85% to 48.07
CDS 5yr: -2.39% to 117.68
CDS 10yr: -1.45% to 183.83

WTI: -0.04% to USD41.90/Barrel
BRENT: -0.06% to USD44.29/Barrel
Source: Bloomberg