The results of the debt switch auction yesterday, the government managed to offer FR0086, FR0087, FR0088, and FR0083 worth IDR 4.7 trillion. The government also managed to offer FR0089 worth IDR 209 billion. The destination bonds were successfully offered in exchange for a number of source bonds series, namely FR0063 (1.9-year) worth IDR 2.1 trillion; FR0046 (2.1-year) IDR 191 billion; FR0077 (2.9-year) IDR 1 trillion; FR0081 (4-year) IDR 1.3 trillion; and FR0040 (4.2-year) worth IDR 288 billion. On the other hand, the government failed to absorb source bonds FR0061 (0.9-year); FR0035 (1-year); FR0043 (1.1-year); FR0039 (2.2-years); and FR0070 (2.7-years).

Corporate Bonds
GIAA: Delays Payment of USD 500 Million Global Sukuk. Garuda Indonesia Tbk (GIAA) has again postponed the payment of global sukuk of USD 500 million due to debt pressure that still surrounds it. As a result, GIAA said it postponed the periodic distribution which was due on June 3, 2021. Previously, the Company used a 14-day deadline for Garuda’s sukuk, which was far due on June 3, 2021. This means that the deadline will fall on June 17. Garuda Indonesia also added a financial advisor to Guggenheim Securities, LLC to evaluate the company’s strategic alternatives to face the challenges caused by the pandemic. (Cash)

BI Holds Reference Interest Rate. The Board of Governors Meeting of Bank Indonesia (RDG BI) decided to maintain the benchmark interest rate (7 Days Reverse Repo Rate/BI 7-DRRR) at 3.5% in June 2021. Likewise with interest rates deposit facility and lending facility interest remained at 2.75% and 4.25%, respectively. This policy takes into account global and domestic economic conditions. From a global perspective, the global economic recovery is still continuing, although uncertainty has not subsided. This can be seen from the economic improvement in the United States (US) and China. In addition, a number of countries in Europe have also improved after a surge in Covid-19 cases some time ago. (CNN Indonesia)

Weekend Sideways Movement. NHKSI Research projects that weekend SUN market movements tend to be sideways. Market participants have predicted that the BI 7-DRRR benchmark interest rate will remain at 3.50%. On the other hand, the increase in positive cases of Covid-19, especially in the DKI Jakarta area, is still a negative sentiment. In the short term, investors can look back at FR0086, FR0087, PBS027, and PBS017.