Investors responded negatively to June Retail Sales data, which fell 2.1% MoM, as June’s high inflation reached 0.61% MoM (Vs. May 0.40% MoM) and 4.35% YoY (Vs. May 3.55 %YoY). All SUN Benchmarks posted higher yields earlier in the week, with FR0091 at 7.28%. The rupiah exchange rate is still stable in the range of IDR15,000/USD.
Corporate Bonds
MEDC Issues IDR 3 Trillion Bonds. PT Medco Energi Internasional Tbk (MEDC) will issue debt securities with a value of IDR 3 trillion. MEDC will use the proceeds from the bond issuance after deducting issuance costs to pay off four bonds maturing in rupiah in 2023 with a total value and to buyback some global bonds with a value of IDR 1.68 trillion. (Kontan)
Domestic Issue
Retail Sales Increase in June 2022. Bank Indonesia said retail sales performance increased on an annual basis last June, although it fell 2.1% on a monthly basis. This increase was reflected in the Rlllvm Sales Index (IPR), which was 229.1 or grew 15.4% YoY in June. The increase occur in clothings, food, beverage and tobacco, and the spare parts and accessories group. In the period of May 2022, the results of the Retail Sales Survey (RSS) indicated that retail sales continued to grow on an annual basis. This is reflected in the IPR in May 2022 which was recorded at 234.1, or grew by 2.9% YoY. (CNN Indonesia)
Recommendation
Lower Target. The government has set an indicative target for the Sukuk auction this time at IDR 7 trillion, or lower than the previous Sukuk auction of IDR 9 trillion. On the other hand, the Government issues a number of SBN through the Private Placement scheme to meet the APBN. NHKSI Research sees that this auction is in the midst of waiting for the release of US inflation data and the discourse of an FFR increase of 75 bps at the end of July.
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