Profit Taking after Rupiah High Appreciation. Prices of all benchmark series Government Bonds (SUN) turned downward due to profit taking by investors. Apart from the appreciation of the rupiah, the yield movement has decreased since October 2020 and amidst strong sentiment regarding the success of the Pfizer vaccine. The final stage clinical trial of the Covid-19 vaccine from Pfizer which is claimed to be 90% effective and without harmful side effects. This news makes life expectancy back to normal. Meanwhile, business activity increased again, which then prompted the economy to rise. Investors tended to release all benchmark SUN yesterday, except for the 1-year tenor. Yield on 1-year government securities fell 8.5 bps to 3.87%. Meanwhile, the yield on 10-year SUN FR0082 rose 3.1 bps to 6.28%.

Pefindo Affirms IdA’s Rating for Mandala Finance Bonds. Pefindo said the company was ready to pay off the bonds because it was supported by cash and cash equivalents worth IDR 267.9 billion at the end of September 2020. As noted, Mandala Finance provides financing for new and used motorbikes. Mandala Finance’s majority shareholder is Jayamandiri Gemasejati, and its affiliated company, Lautan Teduh Interniaga, is a Yamaha sales agent in West Java and Lampung. As of June 30, 2020, Mandala Finance was owned by Jayamandiri Gemasejati 70.42%, Alex Hendrawan 5.06%, and the public 24.52%. (Kontan)

September Retail Sales are still Contracting. On a monthly basis, September retail sales recorded a decrease of 1.4% MoM or a decrease of 8.7% YoY. On the other hand, the value is better than before. Given, retail sales in August 2020 actually contracted 9.2% YoY. Meanwhile, growth improvement occurred in most groups, such as the food, beverage and tobacco group. This group did experience positive growth of 3.1% YoY in September. This increase was also better than the growth that occurred in August 2020 for this group, which was only 2.9% YoY. In addition, the improvement in retail sales contraction was also influenced by a decrease in contraction in the clothing sub group, which initially contracted 64.9% YoY to a contraction of 59.7% YoY. In addition, the motor vehicle fuel sub-group also appears to have improved contraction, from minus 23.5% YoY in August 2020 to minus 18.7% YoY in September 2020. (Kontan)

Investors’ Selective Buying Action. Investors can start to look at the benchmark series SUN which has recorded a price decline in the last two trading days. Apart from FR0080 and FR0083, market players can also take selective buying action for FR0086 and FR0087. For the record, the four series have the potential to be offered again at the SUN auction next Tuesday. Yesterday, the rupiah exchange rate edged down 0.19% to IDR 14,085 / USD on the spot market. On the other hand, investors are still anticipating profit taking in line with the strengthening of the rupiah exchange rate in the past week.

-REVIEW (Nov. 11, 2020)-
FR0081 (5yr): +3.3 Bps to 104.57 (5.36%)
FR0082 (10yr): +3.1 Bps to 105.15 (6.28%)
FR0080 (15yr): +1.7 Bps to 106.03 (6.83%)
FR0083 (20yr): +2.6 Bps to 103.02 (7.20%)

FR0086 (6yr): +1.6 Bps to 100.69 (5.34%)
FR0087 (11yr): +3.8 Bps to 101.11 (6.34%)

UST 2yr: -0.000 point to 0.18%
UST 5yr: -0.000 point to 0.45%
UST 10yr: +0.018 point to 0.97%
UST 30yr: -0.000 point to 1.74%
German Bund 10yr: -0.022 point to -0.50%
UK Gilt 10yr: +0.012 point to 0.41%

CDS 2yr: -1.06% to 28.30
CDS 5yr: -7.88% to 72.39 (as of Nov. 10 2020)
CDS 10yr: -0.83% to 133.43

WTI: +0.21% to USD41.45/Barrel
BRENT: +0.43% to USD43.80/Barrel
Source: Bloomberg