Mixed SBN Market Ahead of the US Presidential Election. Market players have been watching, as well as wait and see ahead of the US (US) presidential election, causing the Government Securities (SBN) market to move mixed yesterday. The presidential election brings the incumbent Republican Donald Trump against Joseph Joe Biden from the Democratic Party. A number of market players project that if Trump wins the presidential election again, there will be no significant changes from the current policy. Trump will still finish the trade war with China, and tax policy will not change, after being cut back in his current administration. On the other hand, if Joe Biden wins the presidential election, it is certain that there will be a change in policy. Meanwhile, a trade war with China will not occur, making the world economy recover faster. Meanwhile, mixed movements in the SBN market indicate investors are realizing profits and switching to riskier assets such as stocks. Yesterday, the yield on 10-year government securities fell 1.1 bps to 6.60%, and 30-year tenors fell 0.4 bps to 7.35%.
Indika Energy Raises USD 675 Million from Global Bonds. Indika Energy Tbk (INDY) has completed a series of global bond offerings worth USD 675 million with an interest rate of 8.25%. The bonds that will mature in 2025 are issued in two stages, namely as much as USD 450 million in the initial stage and an additional USD 225 million followed. The bonds were issued by the company through Indika Energy Capital IV Pte Ltd and completed the roadshow and pricing in connection with the US $ 225 million global bond offering on October 28. This process complements the bid for the USD 450 million global bond which was completed on October 17. The bonds are consolidated and form a series, which are then listed on the Singapore Stock Exchange. For information, Indika’s subsidiaries acting as guarantor for global bond issuance include PT Indika Inti Corporindo, PT Tripatra Engineering, PT Tripatra Multi Energi, PT Tripatra Engineers and Constructors, and Tripatra (Singapore) Pte Ltd. (Investor Daily)
Investment realization outside Java Island has increased. The Investment Coordinating Board (BKPM) noted, in 3Q20 investment realization originating from outside Java reached IDR 110.4 trillion, up 17.9% compared to the same period last year. Meanwhile, investment realization in Java Island in the July-September 2020 period fell 12% to IDR 98.6 trillion. The larger portion of investment realization outside Java compared to Java is the first time since the 4Q16 investment realization data. Meanwhile, one of the factors driving equal distribution of investment realization outside Java is adequate infrastructure and availability of raw materials. (Kontan)
Indonesia’s 3Q20 GDP Expectations are Improving. Today’s market movements tend to be influenced by investors’ expectations of improving Indonesia’s economy for the 3Q20 period. By consensus, Indonesia’s 3Q20 Gross Domestic Product (GDP) is projected to contract by 3%, or better than the 2Q20 quarter which contracted by 5.32%. This projection is in line with industrial activity and community mobility in July-September 2020 which began to rise. Market participants will also return to choosing riskier assets such as stocks after the US presidential election. This also creates capital inflow to emerging markets. Yesterday, the rupiah strengthened 0.38% to IDR 14,585 / USD on the spot market. Meanwhile, BI’s middle rate strengthened 0.74% to IDR 14.609 / USD.