Today’s Outlook:
Investors expect the Federal Reserve will soon stop the upward trend of US interest rates as data emerged that Inflation managed to flatten and jobless claims rose. The US PPI (Apr.) rose 0.2% MoM, lower than the 0.3% economists had expected, and slowed to 3.2% YoY from 3.4% in the previous month. Weekly Initial Jobless Claims increased by 22k to 264k for the week ended May 6, the highest claims in 1.5 years. This pattern of jobless claims suggests growth in labor wages and a slowdown in labor demand. From Asia, China reported Inflation (Apr.) which is still slipping further now at 0.1% YoY (from 0.7% previous month), and even deflation on month basis -0.1% (vs 0.0% forecast). Their producer-level inflation or PPI also dropped more than expected at minus 3.6%, a worse deflation than both forecast and previous period. While from Europe, the Bank of England solidified their interest rate upward trend with another 25bps hike, bringing the UK benchmark interest rate to 4.5%. Later in the day, 1Q23 GDP and Manufacturing Production (Mar.) figures from the UK will be monitored to find out if the threat of recession has come to Europe, as reflected earlier in the US and China’s weak economy.

Corporate News
MNC Energy Releases IDR 1.5 Trillion Bonds and 2.5 Billion New Shares Coal issuer owned by tycoon Hary Tanoesoedibjo, PT MNC Energy Investment Tbk, has taken several corporate actions to seek additional working capital. According to IDX information disclosure on Thursday (11/5), the issuer with the IATA code will issue bonds, sukuk or other debt securities from non-bank financial institutions worth IDR 1.5 trillion and issue 2.5 billion new shares. The proceeds from the bonds are planned to strengthen the capital and financial structure, but are not limited to reserves for increasing working capital and subsidiaries. However, the use of funds may change and be adjusted to the needs of the company in a way that the board of directors will propose to the board of commissioners. (Katadata)

Domestic Issue
Government Will Offer ST010T2 and ST010T4 Savings Sukuk, Is it Worth Collecting? The government will sell the ST010T2 Series Savings Sukuk and the ST010T4 Series Retail Sukuk. Analysts consider the instruments offered to be attractive amidst high economic uncertainty. HPAM’s Head of Business Development Division Reza Fahmi said that the instruments that will be offered by the government are attractive amid the trend of rising benchmark interest rates. It is because the ST010 has a floating yield with a minimum limit (floating with floor). Similarly, President Commissioner of HFX International Berjangka Sutopo Widodo also believes that among the two sukuk offered, he considers the sukuk with a two-year tenor to be more attractive. Both analysts also assessed that given the volatile market conditions, many investors are interested in ST010.

US10YT is currently in the Support area from the previous Low level around yield 3.368% – 3.321%, while RSI shows a positive divergence. ADVISE: BUY ON WEAKNESS; with gradual Average Up after the breakout of MA Resistance in the range: 3.441% – 3.517%. TARGET: 3.613% – 3.644%. ID10YT seems to be testing the Support again from the previous Low level at 6.402% yield, while currently RSI still shows a positive divergence. ADVISE: BUY ON WEAKNESS, anticipate technical rebound towards the nearest Resistance: MA10 / 6.484%.

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