Positive Sentiment Trade Balance Surplus. The benchmark SUN recorded a slight increase in yield between 0.1 bps-5.4 bps. Data shows that the trade balance in May was a surplus of USD 2.9 billion (vs. April of USD 7.6 billion), in line with the CPO export ban during that period. Investors were also relatively wait and see yesterday, waiting for the release of FFR data for the June period which is speculated to rise +75 bps (Vs. Cons. +50 bps).
Corporate Bonds
LTLS: Prepare IDR 200 Billion Fund to Pay Off Bonds. PT Lautan Luas Tbk (LTLS) has prepared funds for the repayment of the Lautan Luas Shelf-Registered Bonds II Phase I which will mature on 21 June 2022. The Company has prepared IDR 200 billion in funds, using internal cash and bank credit facilities. For the record, the company’s total cash and bank as of March 31, 2022 amounted to IDR 527 billion. (Liputan6.com)
Domestic Issue
April 2022 Foreign Debt Down. Bank Indonesia (BI) noted that the foreign debt (ULN) as of April 2022 was USD 409.5 billion, a decrease of USD 2.6 billion compared to the previous month which was USD 412.1 billion. This development was mainly due to a decline in the position of public sector external debt (Government and Central Bank). (CNN Indonesia)
Recommendation
Survey: BI 7DRRR June Fixed at 3.50%. Based on Bloomberg survey data, BI will keep the BI 7DRRR at the level of 3.50% at the RDG June 22-23 next week. BI stated that the current inflationary fluctuations did not have to be responded to by an increase in the BI 7DRRR, and BI had also normalized policies in terms of absorption of market liquidity in the banking system by increasing the Statutory Reserves. Previously, FFR hike in June +75 Bps (Vs. Cons. +50 Bps), the Fed’s aggressive action dampened May high inflation at consumer CPI level (1.0% MoM; 8.6% YoY); as well as PPI producers (0.8% MoM; 10.8% YoY).
Download full report HERE.
