Investors digested the Fed and BI rate hikes. The yield on SUN Benchmark short tenor FR90 rose 8 bps. Apart from the FFR increase which was in line with expectations, investors were also watching the September BI 7DRRR increase of +50 bps. Meanwhile, the ADB’s upward revision of Indonesia’s economic growth projection from 5.0% to 5.4% in 2022 is another positive sentiment.

Corporate Bonds
JSMR: Participating in Tendering 3 Toll Road Sections. PT Jasa Marga Tbk (JSMR) participated in the tender for three toll roads tendered by the Ministry of PUPR. The tenders participated by the company include the Patimban Access Toll Road, which is currently in the auction negotiation stage because the Jasa Marga Consortium is a single bidder. The second is the tender for the Bogor-Serpong Toll Road (Via Parung) and the third is the Sentul Selatan-Karawang Barat Toll Road where Jasa Marga has been declared to have passed the prequalification. (Kontan)

Domestic Issue
BI Interest Rate Hike 50 bps to 4.25%. Bank Indonesia (BI) has decided to raise the benchmark BI 7 Days Reverse Repo Rate by 50 basis points (bps) to 4.25%, with the deposit facility rate increasing to 3.5% and the lending facility rate to 5%. This decision was stipulated in the September 2022 BI Board of Governors Meeting, Thursday (22/9/2022). The RDG was held in two days to determine the direction of the central bank’s interest rates and monetary policy. (CNBC Indonesia)

BI closed 3Q22 with BI 7DRRR +50Bps increase. Investors responded positively to BI’s efforts to reduce the potential for soaring inflation, following the increase of more than 30% in domestic subsidized fuel prices. BI’s tight monetary policy continued, raising the September BI 7DRRR by +50bps to 4.25%; after previously in August rose +25Bps. From a global perspective, the US labor market’s Lagging Indicator remains solid, the Fed’s continued Hawkish justification in November and December. US jobless claims for the week ended September 17, rose a modest 2% to as many as 213K claims, indicating the labor market remains resilient, amid the Fed’s aggressive tight monetary policy to cool inflation. Risk-Off occurred in the bond market, Yield Inversion spread between UST2Y Vs. UST10Y widened to close to 50Bps, or yields breached the 4% and 3.5% levels, respectively, the highest levels since the Subprime Mortgage crisis.

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