Yield FR0091 is below 7%. Selective buying sent the benchmark 10-year SUN FR0091 down to 6.99%. Market participants responded positively to Indonesia’s May inflation which was low or at the level of 0.41% MoM (Vs. Apr. 0.95%), or inline with BI’s Dovish stance which maintained BI’s 7DRRR at its lowest level of 3.50%. Meanwhile, entering the month of June, investors are again looking at the effectiveness of the Fed’s Hawkish stance, as US inflation for the May period is projected at 0.7% MoM, higher than the previous month’s inflation of 0.3% MoM. NHKSI Research sees that if US inflation has not slowed down, then the Fed reacts more aggressively beyond expectations, potentially causing the market to fluctuate again.
Corporate Bonds
KRAS Issues Mandatory Convertible Bonds Series B. PT Krakatau Steel Tbk (KRAS) plans to issue Mandatory Convertible Bonds (OWK) Series B, a maximum of IDR 800 billion which will be converted into new shares in KRAS. This Series B OWK has a tenor from the date of issuance until December 30, 2027. (Kontan)
Domestic Issue
Export Ban for Deflationary Cooking Oil. The Central Statistics Agency (BPS) said cooking oil deflation of 1.06% in May 2022 in line with the ban on exports of Crude Palm Oil (CPO) and its derivatives. In more detail, cooking oil contributed to deflation of 0.01%. Cooking oil prices fell after President Joko Widodo (Jokowi) banned the export of CPO and its derivatives from April 28, 2022 to May 22, 2022. (CNN Indonesia)
Recommendation
Economic Data and Rupiah Appreciation Support the SUN Market. Expansive manufacturing and inflation remain positive sentiment for SUN trading today. Indonesia’s manufacturing activity is still in the expansion zone, or S&P Global noted, the Indonesian Manufacturing Purchasing Manager’s Index (PMI) in May 2022 was 51.8. On the other hand, despite the expansion, it decreased compared to April 2022 which was 51.9 in April 2022.
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