High yield expectations, the Government did not win PBS34. Bids entered in yesterday’s Sukuk auction were IDR 24.1 trillion, lower than the previous Sukuk auction of IDR 28.5 trillion. Furthermore, the Government only absorbed IDR 9 trillion from the total incoming bids or in accordance with the indicative target. Meanwhile, the Government’s decision not to win at all PBS34, made the absorption of the Sukuk auction this time down compared to the auction two weeks ago which reached IDR 12.1 trillion.
Corporate Bonds
SMGR: Books 4.28% Profit Increase. PT Semen Indonesia Tbk (SMGR) until 1H22 posted a net profit of IDR828.76 billion or grew 4.28% YoY. The increase in profit was due to a 9.7% decrease in selling expenses to IDR1.261 trillion. Meanwhile, sales fell 2.07% to IDR15.876 trillion. (Emiten News)
Domestic Issue
Some PSN Will Be Completed Soon. The government is working on a number of infrastructure projects that are included in the National Strategic Project (PSN) which can be completed soon. Some of them are the Trans Sumatra toll road, the Semarang-Demak toll road, then the land acquisition mechanism with consignment and PSN certainty for the State Capital (IKN) infrastructure project. Meanwhile, the IKN project was asked to be included in the PSN, to facilitate and accelerate its development. (Kontan)
Recommendation
Investors watched Powell’s speech and the ECB’s decision. Service sector growth boosts the probability of a +75 bps increase in the FFR. US services sector, ISM Services Index Aug. rose to 56.9 points (Vs. Jul. 56.7 points), making investors see a 74% probability of a +75Bps Fed rate hike next September based on CME FedWatch data. Apart from focusing on Powell’s speech on Thursday, investors are also anticipating the European Central Bank’s monetary policy on the same day. Based on a Bloomberg survey, the ECB Main Refinancing Rate Sept. up +75Bps to 1.250% (Vs. Aug. 0.500%)
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