Investors are Again Interested in FR0087 and FR0080, book incoming offers of up to IDR 25.3 trillion and IDR 21.2 trillion. The bids for the two series reached more than 56% of the total bid for the SUN auction yesterday valued at IDR 83 trillion. Investors are interested in the series of 10-year benchmark candidate FR0087, recording the weighted average yield at the level of 6.69%. The incoming yield bids were in the range of 6.65% -6.83%, with the highest yield won reaching 6.70%. In addition, the yield spread between FR0087 and UST 10-year is more than 600 bps, making foreign investors also interested in this series in yesterday’s auction. For the record, the SUN auction results were also influenced by the positive economic conditions in China which gave positive perceptions to investors. China’s economic growth, which grew positively in 3Q20, had a positive impact on the bond market in developing countries. China’s economy managed to grow by 4.9% 3Q20, making China a country that was able to anticipate the impact of the recession. Meanwhile, a number of investors are also interested in SUN because the BI 7-DRRR benchmark interest rate is still in the range of 4%.
Surya Esa Subsidiary Issues USD 650 Million Global Bond. Surya Esa Perkasa Tbk (ESSA) through its subsidiary, Panca Amara Utama (PAU) will issue global bonds with a maximum value of USD 650 million. The funds raised from this transaction will be used to refinance all of PAU’s debt to the International Finance Corporation. Surya Esa Perkasa will guarantee the company (corporate guarantee) in the issuance of these bonds. In addition, the company will guarantee all PAU shares owned by the company. Then, PAU will also pledge all assets owned by PAU to guarantee this transaction plan. The company management explained that the outstanding value of PAU’s principal debt as of September 30, 2020 was USD 436.68 million. In detail, these bonds will be offered with a maximum tenor of seven years, with a fixed interest rate in the range of as high as 8% per annum. (Investor Daily)
Realization of Tax Revenue Decreased by 16.86%. Realization of tax revenue throughout January-September 2020 was only worth IDR 720.62 trillion. Based on the 2020 State Budget (APBN) report, this amount is equivalent to 62.61% of the year-end outlook which is pegged at IDR 1,198.82 trillion. The tax revenue realization also showed a negative growth of 16.86% YoY compared to the same period last year, namely IDR 902.79 trillion. The cause of this low tax revenue trend is the impact of the corona virus (Covid-19) pandemic on the economy. Based on the description of revenue per post tax, income tax (PPh) on oil and natural gas (oil and gas) had the deepest contraction, reaching 45.28% YoY with a realization of IDR 23.63 trillion. This condition is in line with the decline in oil and gas prices and volumes. Meanwhile, the realization of non-oil and gas PPh was IDR 418.16 trillion minus 16.91% YoY. Value added tax (PPN) and sales tax on luxury goods (PPnBM) amounting to IDR 290.33 trillion minus 13.61 YoY. Land and building tax (PBB) and other taxes IDR 18.5 trillion weakened by 8.86% YoY. Even so, the growth in gross tax revenue began to show recovery in the last three months, namely July, August and September, respectively growing at minus 26.1%, minus 21.5% and minus 16.86%. (Kontan)
External Sentiment US stimulus. The movement of the rupiah exchange rate is projected to continue today. A number of market players are interested in risky assets, in line with expectations of US stimulus will be realized before the presidential election. Yesterday, the rupiah strengthened 0.34% to IDR 14,658 / USD on the spot market. Meanwhile, BI’s middle rate also strengthened 0.08% to IDR 14,729 / USD. Next week, the government will offer five series at the Sukuk auction Tuesday (27/10). Based on data from the Directorate General of Financing and Risk Management (DJPPR Ministry of Finance, the government will offer five series consisting of SPNS14042021, PBS027, PBS026, PBS025, and PBS028, with an indicative target of IDR 1 trillion.