The result of the additional auction (Green Shoe Option) for Government Securities (SUN) yesterday, recorded an incoming bid of only IDR 15 trillion. SUN yield this time is less attractive, in line with the increase in US Treasury (UST) yields. This low bid, amid the unfulfilled indicative auction target of IDR 25.3 trillion, has made the government win all bid to cover this time (1x bid to cover ratio). On the other hand, taking into account the state treasury conditions and the 2021 State Budget (APBN) financing strategy, the government decided to close the main auction and the Green Shoe Option auction with a total of IDR 19.8 trillion of SUN won. From here, NHKSI Research sees the potential for BI intervention worth IDR 4.8 trillion, as well as closing the last SUN auction in 1Q21. Meanwhile, the 10-year UST yield again rose to the level of 1.77% or the highest level in the last 14 months. The increase in UST yield was in line with expectations of widespread US economic recovery, which in turn had an impact on rising inflation.
Several Multifinance Companies Issue Bonds. Starting from Astra Sedaya Finance, which will issue bonds worth IDR 2.5 trillion, which is part of the Continuous Bond V Phase II Year 2021. The offering period will take place on April 8-12 2021. This subsidiary of Astra Group still intends to issue bonds once again with the remaining This year. In addition, WOM Finance is also interested in issuing bonds around 2Q21 – 3Q21. This is because conditions and projections on the capital market have improved compared to the previous year. Moreover, the company is also in need of new funding. Previously, Sinar Mas Multifinance will issue bonds of IDR 732.5 billion in February. The Sinar Mas Multifinance II Phase II Sustainable Bond in 2021 has an A + rating from the Indonesian Credit Rating. The Company also provides guarantees to bondholders in the form of receivables from business activities that are due or have not been paid up to 90 calendar days from the due date of the installments on each of these receivables. The collateral value is 60% of the principal amount of the outstanding bonds. (Kontan)
ADB Approves USD 450 Million Loan for Vaccination Distribution. The Asian Development Bank (ADB) approved a USD 450 million loan to Indonesia, particularly Bio Farma, for vaccination purposes. The loan is included in the ADB program entitled Resposive Covid-19 Vaccines for Recovery (RECOVER) which is supported by the Asia Pacific Vaccine Access Facility (APVAX) worth USD 9 billion and was launched in late 2020. This project is expected to be able to support the availability of vaccines quickly and fairly for ADB developing countries. To be eligible for financing through APVAX, vaccines must meet at least one of three criteria. First, vaccines are provided through the Covid-19 Vaccines Global Access Facility (COVAX). Second, vaccines meet World Health Organization (WHO) prequalification requirements. Or third, get authorization from a strict regulatory authority or the Stringent Regulatory Authority (SRA). (Kontan)
Sentiment on Tantrum without Tapering. Starting the new 2Q21 period, market players are again paying close attention to the tantrum without tapering sentiment. Market volatility sentiment occurred, amid the Fed’s decision not to raise its benchmark interest rate. NHKSI Research sees this as an opportunity for market movements to not depend on the strength of the Fed’s intervention. Previously, the Fed had the opportunity to intervene in Treasury yields by purchasing long-term debt securities from the market. The goal is to control inflation expectations. Yesterday, the rupiah exchange rate was again under pressure against the US dollar, or weakened in 3 consecutive days. Based on Refinitiv data, the rupiah is traded in the range of IDR 14,470 / USD to IDR 14,565 / USD. The yield for FR0087 was closed at 6.81% level.