The running of regional head elections has pushed the bond market back to consolidation. Yesterday’s trade was also supported by external sentiment, the election of Janet Yellen as US Treasury Secretary will bring a pro-stimulus policy. The end of the auction of Sovereign Debt Instruments (SUN) and Sukuk in 2020, resulting in a low supply of the bond market. Yesterday, FR0086 and FR0087 returned to record yields towards the psychological level of 5% and 6%, respectively. The Asian Development Bank (ADB) cut its projection for Indonesia’s economic growth in 2021 from the previous projection of 5.3% to 4.5%. On the other hand, ADB projects that Indonesia’s domestic demand will only recover in 2022. This lower projection has made Indonesian capital market players interested in government bonds. Meanwhile, the Composite Stock Price Index (JCI) was under pressure after touching the psychological level of 6,000 and the announcement of a 12.5% increase in cigarette excise rates in 2021.
Download full report HERE.