Short-term volatility, investors are interested in FR0083. Investors are still responding negatively to the uncertainty over the end of the pandemic in Indonesia, as positive cases increase to record highs again. Previously, market players had also observed the imperfect economic recovery. Investors are looking for alternatives that provide attractive yields, taking selective buying actions for long tenor SUN. Yield FR0083 remained at the level of 7.41%, amidst other benchmark SUN which recorded an increase in yield. Meanwhile, the 10-year FR0082 yield, which is the benchmark for government bond yields, posted a yield of 6.86 percent. On the other hand, the short tenor FR0081 recorded the highest yield increase of more than 3 bps to the level of 5.60%. For the record, cases of Covid-19 infection in Indonesia continue to grow. The number of positive cases recorded rose to 257,388 cases, up 4,465 cases. This increase is the highest record since the Covid-19 pandemic was first announced on March 2.

Only Four Banks Issued Bonds. Quote from KSEI, during 3Q20 there were only four banks that issued bonds. Even in September, there were no banks that issued debt securities at all. The four banks are MUFG Bank which issued a Negotiable Certificate Deposit (NCD) worth IDR 720 billion in July. Then in August, Bank Tabungan Negara Tbk (BBTN) issued IDR 1 trillion bonds, IDR 1 trillion Commonwealth Indonesia bonds, and IDR 880 billion NCD Bank Maybank Indonesia Tbk (BNII). President Director of Bank Maybank Taswin Zakaria explained that the issuance of NCD by the company was not actually done because of tight liquidity. On the other hand, the company’s liquidity is now very loose. The NCD issuance worth Rp. 880 billion was called Taswin because the issuance schedule was due soon. The NCD is offered in three series, each Series A IDR 350 billion with a 6-month tenor with a 5% coupon, Series B IDR 50 billion with 9 months tenor and 5.06% coupon, and Series C IDR 480 billion with 12 months tenor and coupons 5.12%. (Kontan)

Excise Revenues Growing Amidst the Pandemic. Excise revenues until the end of August 2020 reached IDR 97.71 trillion or 56.74% of the target. Excise revenues, which consist of excise on tobacco products (HT), drinks containing ethyl alcohol (MMEA), and ethyl alcohol (EA), grew by 4.93% compared to August 2019. Judging from the level of cumulative growth, the growth of excise on EA became the highest was 140.43% YoY. Although lower than the previous month. The Minister of Finance said that the increase in EA excise revenue was driven by the increase in demand for use in making hand sanitizer products. Although the figure is very small, only IDR 200 billion. Then, the MMEA excise revenue this year amounted to IDR 3.09 trillion or a 23.21% YoY slowdown compared to the same period in 2019. The slowdown in domestic MMEA production growth was due to the decline in production that occurred since 2Q20, due to pandemic conditions that hit the national tourism sector. (Kontan)

External Sentiment Still Pressing Rupiah. US home sales data for August period is better than the previous month. August home sales reached 6 million, or the highest level in the last 14 years. In addition, the PMI index for the US manufacturing sector for September reached 53.5. This figure is better than market expectations of only 52.5 and also better than the August realization of 53.1. Meanwhile, domestic sentiment on the recession issue still put pressure on the rupiah. Yesterday, the rupiah closed 0.2% lower at IDR 14,815 / USD on the spot market. Meanwhile, BI’s middle rate weakened 0.35% to the level of IDR 14,835 / USD. In the short term, investors can take advantage of the momentum of the FR0087 and FR0083 movements.

-REVIEW (Sept. 23, 2020)-
FR0081 (5yr): +3.5 Bps to 103.67 (5.60%)
FR0082 (10yr): -0.9 Bps to 100.98 (6.86%)
FR0080 (15yr): +0.3 Bps to 100.94 (7.39%)
FR0083 (20yr): +0.0 Bps to 100.84 (7.41%)

FR0086 (6yr): +3.2 Bps to 99.68 (5.56%)
FR0087 (11yr): -4.3 Bps to 97.98 (6.77%)

UST 2yr: +0.005 point to 0.14%
UST 5yr: +0.005 point to 0.27%
UST 10yr: +0.001 point to 0.67%
UST 30yr: -0.006 point to 1.41%
German Bund 10yr: +0.000 point to -0.50%
UK Gilt 10yr: +0.015 point to 0.21%

CDS 2yr: +0.95% to 48.11
CDS 5yr: -0.51% to 109.95
CDS 10yr: +0.73% to 173.51

WTI: +0.32% to USD39.93/Barrel
BRENT: +0.11% to USD41.77/Barrel
Source: Bloomberg