Manufacturing Data Support SUN Market. INDOBeX Government Total Return is relatively flat or edged up 0.02% to 278.64. A number of investors responded positively to the rise in Indonesia’s manufacturing index from May 28.6 to June 39.1. This manufacturing improvement is proof that easing restrictions designed to control the Covid-19 pandemic are able to increase processing industry activity. Yields on the reference series FR0081 and FR0082 fell 1.6 bps to 6.51% and 7.19% respectively. On the other hand, investors also continue to pay close attention to the uncertainty of global political conditions, making investors avoid medium and long tenors. The ratification of Hong Kong’s security law by the Chinese government has the potential to increase regional tensions. Yields FR0080 and FR0083 edged up to the levels of 7.60% and 7.63%.

SBN Issuance Reached IDR 630.5 Trillion. Realization of the country’s debt is equivalent to 41.2% of the total target of 2020 gross SBN worth IDR 1,530.8 trillion. The debt achievement during January-June 2020 came from the auction. Meanwhile, the realization of this positive SBN can be seen from the results of the issuance of global bonds which reached USD 4.3 billion. Then followed by a global green sukuk Indonesia tenor of 5-year and 30-year which is well realized. The remaining 2H20 SBN issuances worth IDR 900.3 trillion. Issuance of SBN through auctions on the domestic market, issuance of retail SBN as much as IDR 30 trillion – 40 trillion, special scheme SBN to BI, private placement, and issuance of foreign currency SBN. (Kontan)

PLN Issues USD 1.5 Billion Bonds, on June 30 and has been listed on the Singapore Stock Exchange. The issuance of Government Electricity Company (PLN) bonds is part of the existing Global Medium Term Notes of USD 15 billion. The PLN bonds consist of two series: First, fixed interest bonds worth USD 500 million with a tenor of 10 years and up to 3%; and Second, fixed interest bonds worth USD 1 billion in 30-year tenors and over 4.00%. Meanwhile, the funds from this issuance will mostly be used for capital expenditure on electricity projects. (Kontan)

Indonesian Manufacturing Still Depressed. IHS Markit noted the Indonesian Manufacturing PMI for June at 39.1. The figure is up 10.5 points from the previous month 28.6. The index also shows Indonesia’s manufacturing industry is still below the expansionary level of 50, which means there is still a substantial decline in the manufacturing sector. On the other hand, the June PMI increase is evidence that easing restrictions designed to control the Covid-19 pandemic are able to increase manufacturing industry activity. Meanwhile, PMI to return to level 50, depends on the speed of realization of the stimulus of the business world which is only 6.8%. (Kontan)

Investors Await FOMC Minutes. The movement of the rupiah today is influenced by the release of the minutes of the FOMC meeting, indicating the Fed’s central bank is still dovish. This Fed policy will make a limited strengthening of the US dollar against major world currencies. Thus, the pressure on the rupiah will not be too great. In addition to PBS002 and PBS026, investors can start looking at PBS022 and PBS005, the series that will be offered at the Sukuk auction on Tuesday (07/07) next week.

-REVIEW (July 2, 2020)-
FR0081 (5yr): -1.6 Bps to 99.93 (6.51%)
FR0082 (10yr): -1.6 Bps to 98.62 (7.19%)
FR0080 (15yr): +0.6 Bps to 99.08 (7.60%)
FR0083 (20yr): +0.6 Bps to 98.57 (7.63%)

UST 2yr: -0.009 point to 0.15%
UST 5yr: -0.015 point to 0.29%
UST 10yr: -0.007 point to 0.67%
UST 30yr: +0.004 point to 1.42%
German Bund 10yr: -0.034 point to -0.43%
UK Gilt 10yr: -0.024 point to 0.18%

CDS 2yr: -0.62% to 53.57
CDS 5yr: -4.12% to 124.06
CDS 10yr: -0.50% to 190.86

WTI: +2.08% to USD40.65/Barrel
BRENT: +2.64% to USD43.14/Barrel