Amid the Wall Street holiday commemorating Labor Day, rising gas prices and continued contraction in manufacturing in the Eurozone made the majority of European stock markets close lower. The Nord Stream 1 pipeline was running at 20% capacity before being discontinued last Friday, pushing up the price of the Dutch TTF Gas Options October 2022 contract to EUR245.9/Mwh, up 15.6% from Friday’s close or more than 400% YoY. The rise in gas is currently holding back manufacturing activity, with the S&P Global Eurozone Composite PMI data contracting further in August 48.9 (Vs. Jul. 49.2). Of note, Gazprom stopped indefinitely the supply of natural gas to the Eurozone via the Nord Stream 1 pipeline due to a technical malfunction.

Corporate Bonds
ELSA: Expects Contract Realization to Exceed Target. PT Elnusa Tbk (ELSA) in early September 2022 recorded the realization of on-hand consolidated work contract at 80% of the company’s 2022 work plan and budget. Seeing this, the Company is confident that it will be able to book better financial performance, supported by an increase in upstream oil and gas service activities, especially seismic activities and well services as well as an increase in the demand for fuel. (Emiten News)

Domestic Issue
Fuel Price Increase is Projected to Hoist Inflation by 1.9%. The increase in the price of fuel will have an impact of 1.9% on inflation this year. Thus, it is estimated that inflation at the end of 2022 will reach 6.6% to 6.8%. The Fiscal Policy Agency of the Ministry of Finance said it had calculated the impact of the fuel increase. Meanwhile, this year’s economic growth is predicted to stay at 5.2%. (CNN Indonesia)

Investors pay attention to the transfer of fuel subsidy allocation to productive and strategic sectors. The increase in subsidized fuel prices provides certainty for business actors. Yesterday’s movement in the government securities market was also in the midst of heavy sentiment on the Wall Street stock exchange which was on holiday to commemorate Labor Day on Monday. On the other hand, investors are still keeping an eye on the impact of the Eurozone energy crisis, after Russia closed indefinitely one of its main gas supply pipelines to the Eurozone.

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