Market mixed at the beginning of the week

-GOVERNMENT BONDS-
Market mixed at the beginning of the week, in line with the increasingly heated US politics amid the increase in positive cases of the Corona virus. Based on Bloomberg data, the 15-year and 20-year benchmark SUN experienced lower prices. Meanwhile, the 5-year and 10-year price increases. Yields on SUN FR0081 and FR0082 fell 1 bps to 5.61% and 6.88%, respectively. Meanwhile, the yields of FR0080 and FR0083 edged up to 7.40% and 7.42%, respectively. On the other hand, market players doubt the availability of a vaccine that will be able to overcome this outbreak in a short time. This was stated by Malik Eiris and Gabriel M Leung from the School of Public Health, The University of Hong Kong. They also questioned the effectiveness of vaccines in building up antibodies en masse. On the other hand, there is a report that says Antibody Dependent Enhancement (ADE) which allows the corona virus to be more immune due to less effective antibodies.

-CORPORATE BONDS-
Waskita Beton Achieves BBB- Rating from Pefindo. Indonesian Securities Rating (Pefindo) assigns a BBB- rating to the 2019 Phase I and II Sustainable Bonds Waskita Beton Precast Tbk (WSBP) worth IDR 2 trillion Apart from bonds, Pefindo also pinned BBB- for the Company (obligor). WSBP is a precast and ready mix concrete production company with the largest production capacity in Indonesia which was officially formed as a subsidiary of Waskita Karya (Persero) Tbk (WSKT) on 7 October 2014. The company listed its first shares on the Indonesia Stock Exchange (IDX) on September 20, 2016. As a company that has 9 plants, 73 Batching Plants, 5 Quarries, and major infrastructure projects. (Investor Daily)

-MACROECONOMY-
BI Accumulated SBN IDR 183.48 trillion as of September 24. Bank Indonesia (BI) accumulated government securities (SBN), through burden sharing with the government. Until September 24, 2020, BI has purchased SBN through a direct purchase mechanism or private placement to finance public goods recovery, amounting to IDR 183.48 trillion. In addition, BI has also realized burden sharing for APBN funding in the non-public goods category, particularly for the recovery of MSMEs amounting to IDR 44.38 trillion. Public goods in this case include the health budget, social protection, as well as sectoral, ministries and institutions (K / L), and local governments whose financing is estimated at IDR 397.56 trillion. BI also bears the debt burden for financing non-public goods, especially for MSMEs and non-UMKM corporations, amounting to IDR 177.03 trillion. In this case, the Ministry of Finance will bear interest at 1% below the reverse repo rate. Meanwhile, BI will cover the rest. The Ministry of Finance fully supports the financing of other non-public goods worth IDR 329 trillion by following market interest rates. (Kontan)

-RECOMMENDATION-
Investors Pay Attention to Long Tenor PBS025 and PBS028. The trend of low interest rates makes long tenor bonds an investment choice for capital gains. In the previous sukuk auction, the incoming bids for PBS025 and PBS028 were the highest. Based on data from DJPPR, PBS025 recorded an incoming bid of IDR 7.31 trillion with a weighted average yield of 7.12% and a return of 8.37%. Meanwhile, PBS028 received a total incoming bid of IDR 5.92 trillion with a weighted average yield that was won 7.53% and a yield of 7.75%. The total bids submitted to the sukuk auction in mid-September were recorded at IDR 20.79 trillion, lower than the previous auction of IDR 38.32 trillion. Bids entered into the auction of state sukuk this time are the lowest since May 2020. Yesterday, the rupiah exchange rate weakened 0.18% to IDR 14,900 / USD on the spot market. Meanwhile, BI’s middle rate edged down 0.05% to the level of IDR 14,959 / USD.

-REVIEW (Sept. 28, 2020)-
-PRICE OF BENCHMARK SERIES-
FR0081 (5yr): -1.2 Bps to 103.59 (5.61%)
FR0082 (10yr): -1.0 Bps to 100.85 (6.88%)
FR0080 (15yr): +0.4 Bps to 100.86 (7.40%)
FR0083 (20yr): +1.2 Bps to 100.74 (7.42%)

FR0086 (6yr): +0.8 Bps to 99.60 (5.58%)
FR0087 (11yr): +0.7 Bps to 97.66 (6.81%)

-YIELD OF GLOBAL BONDS-
UST 2yr: -0.005 point to 0.12%
UST 5yr: -0.009 point to 0.25%
UST 10yr: -0.002 point to 0.65%
UST 30yr: +0.014 point to 1.41%
German Bund 10yr: +0.002 point to -0.52%
UK Gilt 10yr: +0.015 point to 0.21%

-CDS OF INDONESIA BONDS-
CDS 2yr: -2.63% to 49.90
CDS 5yr: -3.10% to 116.32
CDS 10yr: -2.17% to 178.37

-CRUDE OIL PRICES-
WTI: +0.86% to USD40.60/Barrel
BRENT: +1.21% to USD42.43/Barrel
Source: Bloomberg