The increase in US Treasury (UST) yields occurred again, a day after the Fed will maintain an extra loose monetary policy. The US Central Bank’s policy is maintained, amid projected inflation that could touch 2.2%. High inflation has boosted the yield on UST. The impact is capital outflows from emerging markets such as Indonesia. Based on data from the Directorate General of Financing and Risk Management (DJPPR), foreign investors’ capital outflow in ownership of Government Securities (SBN) almost reached IDR 20 trillion in the first two weeks of March. This figure is higher than February’s capital outflow which was only IDR 15 trillion. At the end of the week, the yield on the benchmark 10-year FR0087 Government Bond (SUN) rose 7 bps to 6.82%.

Mandala Finance Bonds Matured. Issuer in the field of motorcycle financing, Mandala Multifinance Tbk (MFIN), said that there is a bond payment due date of IDR 100 billion on April 12, 2021. The company said that the funds to be prepared for the payment of maturing bonds will come from the Company’s internal sources. Previously on December 7, 2020, MFIN had listed new bonds on the Indonesia Stock Exchange with a nominal value of IDR 351 billion, these bonds are divided into 2 series, each Series A with a 370-day tenor with a principal value of IDR 300 billion and Series B of IDR 15 billion. with a 3-year tenor. These bonds are issued in order to meet the working capital requirements of the Company. (Investor Daily)

Corporate Financing Needs Decreased in February. This is indicated by Weighted Net Balance (WNB) of 8.2%, although it is slower than the previous month with WNB 9.2%. Even so, Bank Indonesia (BI) said, there are several sectors that are experiencing increased financing needs. Meanwhile, the highest increases were in the Agriculture, Fisheries and Forestry sectors. In detail, the sector recorded WNB 2.1% or an increase from 1.2% in the previous month. Then, there are also mining and quarrying areas which also recorded WNB 1.9% or an increase from 1.2% in January 2021. The power supply sector also shows an indication of increasing demand for financing. It can be seen from WNB of 0.3% in February 2021. The increase in financing needs in these sectors is mainly to support operational activities by 69.3%, pay obligations due of 39.6%, and support post-new normal recovery of 38 , 6%. (Kontan)

Fair Yield to Close Sukuk Auction Period 1Q21. The increase in UST yield at this time, does not indicate the tight monetary policy of the Fed. On the other hand, the 10-year UST yield was at the level of 1.75%. Fair yield levels in market players are expecting some consolidation in the United States (US). Therefore, NHKSI Research projects the UST yield to remain within this range for now. For the record, the Fed projects that the US Gross Domestic Product (GDP) will increase to 6.5% in 2021, higher than the projection in December 2020 at the level of 4.2%. Next week, DJPPR will offer PBS027, PBS017, PBS029, PBS004, and PBS028 on the planned Sukuk auction Tuesday (23/03). This auction is the last Sukuk auction for the 1Q21 period.