SUN Strengthening Ahead of Inflation Data. The benchmark 10-year SUN yield was at 7%, with FR0093 and FR0092 at 7.31%, respectively. May inflation is projected at 0.43% MoM, lower than April’s 0.95% MoM inflation, as a number of commodities experienced a decline in prices, such as cooking oil. This projection is inline with BI’s decision to maintain the BI 7DRRR at its lowest level of 3.50%.
Corporate Bonds
SMAR Issues IDR 1.5 Trillion Bonds in Three Series. PT Sinar Mas Agro Resources and Technology Tbk (SMAR) will issue Shelf Registration Bond IV SMART Phase I Year 2022 worth IDR 1.5 trillion. The Phase I bonds are part of SMART’s Continuous Public Offering (PUB) IV with a target of raising funds to reach IDR 6 trillion. The bonds will be offered in three series, namely Series A with a tenor of 370 days, Series B with a tenor of three years, and Series C with a tenor of five years. Information regarding the amount of principal and fixed interest for each series will be notified later. (Kontan)
Domestic Issue
Government Does Not Extend Tax Incentives. The government plans not to extend tax incentives for handling Covid-19, which will expire in June. The tax incentives include the provision of tax incentives for Income Tax (PPh) Article 25, PPh Article 22 Imports, and final PPh on construction services borne by the Government (DTP) for the Program for the Acceleration of Improvement of Irrigation Water Use (P3-TGAI), which valid until June 2022. (Kontan)
Recommendation
Government Targets IDR 9 Trillion Fresh Funds. Today, the Government will auction six series of state Sukuk, namely SPN-S 15112022, PBS031, PBS032, PBS030, PBS029, and PBS033. Meanwhile, the rewards offered are SPN-S 15112022 (discounted), PBS031 of 4%; PBS032 4.875%; PBS030 5.875%; PBS029 6.375%; and PBS033 by 6.75%. The Sukuk auction this time, amid the appreciation of the rupiah 0.13% to the level of IDR 14,558/USD.
Download full report HERE.
