The SUN market is under pressure, amid the potential for high inflation in 3Q22. Investors are looking again at the Headline Inflation in July, approaching 5% YoY due to the increase in Administered Prices, especially non-subsidized energy prices. Meanwhile, the discourse on the increase in Pertalite and Solar fuel prices this week will push inflation back to high in September. NHKSI Research sees the increase in Pertalite fuel will directly reduce purchasing power, then reduce public consumption and ultimately disrupt the domestic economic recovery process. Currently, the government is maintaining GDP growth above 5%. Meanwhile, the absence of an increase in Administered Prices and a decrease in the prices of a number of food commodities has the opportunity to make the August period record deflation.

Corporate Bonds
WSKT: Offers 8.72 Bn Shares in Rights Issue. PT Waskita Karya Tbk (WSKT) will offer a rights issue with a maximum of 8.72 billion shares with a nominal value of IDR100/share. The funds will be used for the completion of toll road projects, working capital, indirect costs of construction projects, and investment in the development of the company’s subsidiaries. Meanwhile, the company will hold an Extraordinary General Meeting of Shareholders on September 26, 2022. (Emiten News)

Domestic Issue
Current Account Surplus Declines. Bank Indonesia (BI) claims that Indonesia’s external resilience strengthened in 2Q22. During this period, Indonesia recorded two surpluses, the Indonesian Trade Balance and Balance of Payments (BOP). Based on BI data, BOP in 2Q22 recorded a surplus of +USD2.4B, after experiencing a deficit of -USD1.8B in 1Q22. The BOP surplus also boosted the current account surplus to +USD3.9 billion or 1.1% of Gross Domestic Product (GDP). (Kontan)

PBoC Dovish Week, BI and the Fed. Monday, the PBoC is projected to cut 1Y and 5Y Loan Prime Rates by 10Bps to 3.60% and 4.35%, respectively. This consensus, as the PBoC earlier last week unexpectedly cut the 1Y Medium-Term Lending Facility Rate Aug. to 2.75% to encourage credit demand. Meanwhile, BI’s commitment to maintain the momentum of FY22E GDP growth above 5%, has the opportunity to make BI 7DRRR Aug. on Tuesday, BI’s RDG remained at the level of 3.50%. Meanwhile, investors expect the Fed’s Dovish speech at the Annual Jackson Hole Symposium on Aug. 25-27. The latest economic data shows that the inflation rate is slowing down, potentially making the September FFR increase only by 50 bps.

Download full report HERE.