Yesterday, the government conducted an additional sukuk auction (Green Shoe Option), offering the PBS029, PBS004, and PBS028 series through the Bank Indonesia auction system. The total bid entered into the auction was IDR 7.4 trillion, with a total nominal value of IDR 7 trillion won. This result also meets the indicative target of a Sukuk auction of at least IDR 12 trillion. For the record, the government’s Sukuk auction on Tuesday (23/02) only managed to win less than IDR 5 trillion. The lack of interest in the Sukuk auction at that time, amid the attractive yield of US Treasury (UST) was at the level of 1.35%, or the highest level since March last year. Meanwhile, the Green Shoe Option auction results show the highest incoming bid in the PBS028 series which matures on October 15, 2046 worth IDR 3.5 trillion, with a weighted average yield of 7.12% and a nominal IDR 3 trillion won. Then followed by PBS004, maturing February 15, 2037 with a total incoming bid of IDR 2.1 trillion, with a weighted average yield of 6.52% and a nominal amount won of IDR 2.1 trillion.

Merdeka Copper Will Release IDR 1.5 Trillion Bonds. Merdeka Copper Gold Tbk (MDKA) intends to issue Phase I Sustainable Bonds II worth IDR 1.5 trillion. The bonds will be issued in two series, namely: Series A 367-day tenor and Series B 3-year tenor. The company stated that around 23% of the proceeds from the bond issuance will be used for the payment of principal debt under a single currency revolving facility of USD 25 million on December 23, 2020. Then, around 11% will be used by Bumi Suksesindo (BSI) to fund exploration activities for the copper project. Seven Hills. Meanwhile, the bonds are part of the Sustainable Bonds II with a total of IDR 3 trillion. (Investor Daily)

Within a month Realization of Tax Revenue Minus 15.3% YoY. The 2021 State Budget (APBN) report shows that in January, the realization of tax revenues was IDR 68.5 trillion. Within one month, the country’s main revenue contracted 15.3% YoY. This achievement has only reached 5.6% of the outlook for tax revenue at the end of this year of IDR 1,229.6 trillion. In detail, the realization of tax revenue last month was divided into two major items. First, the realization of income tax (PPh) on oil and gas (oil and gas) of IDR 2.3 trillion. This figure is minus 19.8% YoY compared to the position in the same period last year of IDR 2.9 trillion. Second, the non-oil and gas tax realization was IDR 66.1 trillion, minus 15.2% YoY compared to the realization per January 2021 of IDR 77.9 trillion. (Kontan)

Positive Sentiment for Powell’s Speech. The movement of the Government Securities (SUN) market today continued the positive external sentiment. A number of investors responded positively to the speech of the Fed, Jerome Powell, who gave testimony before the US Senate Banking Committee. Powell said that the current US economic condition is still far from the desired goal, namely maximum employment and price stability of 2%. US inflation is still low, with the average in the last 12 months still below the 2% level. Previously, the UST UST yield hike was in line with the market asking for more yields to compensate for the potential high inflation. However, Powell’s speech, managed to push back the UST yield. This has resulted in a strengthening of the rupiah exchange rate and a decrease in yield on a number of SUN. Yesterday, the 10-year benchmark FR0087 SUN was again trading at a premium, with the 5-year benchmark FR0086 heading for par.