Yesterday, the government won the auction of State Sharia Securities (SBSN / Sukuk) worth IDR 6.4 trillion, or lower than the indicative target set at IDR 12 trillion. This prompted the government to hold an additional Sukuk auction (Green Shoe Option) on Wednesday (24/03). Meanwhile, capital outflow sentiment and the increase in Indonesia’s risk profile were the negative sentiments in the auction yesterday. Earlier this week, Indonesia’s 5-year Credit Default Swap (CDS) was at the 86.29 bps level, or exceeding the previous range of 67.5 bps to -86 bps throughout 2021. Meanwhile, Indonesia’s 10-year CDS the level of 146.05 bps, or approaching the upper limit in the range 126.50 bps to 151.85 bps in this year’s movement. The depreciation of the rupiah exchange rate also adds to the risk of the domestic bond market.
Download full report HERE.
