-GOVERNMENT BONDS-
SUN Benchmark Closed Strengthening at the Weekend. A number of market players, especially foreign investors, responded positively to Biden’s victory. This has benefited emerging market countries such as Indonesia, following the end of the trade war between the US and China. Foreign investors are also looking for a fiscal stimulus that will be bigger than it was during the Trump administration. Democrats previously proposed a USD 2.2 trillion fiscal stimulus, which the Trump administration disagreed with and rejected by Republicans. Bank Indonesia (BI) shows that in the period between November 2 and 5, 2020, foreign investor transactions on the domestic financial market booked a net purchase of IDR 3.81 trillion. In detail, net buying on the Government Securities (SBN) market was IDR 3.87 trillion and net selling on the stock market was IDR 60 billion.
-CORPORATE BONDS-
Tower Bersama Offers IDR 750 Billion Bonds. Tower Bersama Infrastructure Tbk (TBIG) plans to offer Phase II bonds worth IDR 750 billion in December 2020. The proceeds from the bond issuance will be used for debt refinancing. Fitch Indonesia has assigned an AA- rating to the issuance of Sustainable Bond IV Phase I. The Tower Bersama IV Sustainable Bond program has a total target fund of up to IDR 7 trillion which is valid for two years. Previously, the company had also obtained shareholder approval for the plan to issue global bonds with a maximum of USD 700 million issued in 2021. This agreement is valid for one year and this issuance action will provide an alternative funding for the company. (Investor Daily)
-MACROECONOMY-
2021 Infrastructure Budget Up 47.2%. The Ministry of Finance increases the budget for infrastructure development in 2021 to IDR 413.8 trillion or an increase of 47.2% from this year’s budget of IDR 281.1 trillion. The increase in the budget is to accommodate many projects that have been delayed in construction this year due to the impact of the Covid-19 pandemic. In addition, the construction of new projects will be carried out in 2021. In addition, the additional infrastructure budget and the construction of new projects will support the level of equal distribution of infrastructure in various remote areas, such as road construction, bridge connectivity, airports, energy and ICT. Some of them are the strategic output targets for 2021, namely related to basic services for the construction of 10,706 flats and special houses, 53 units of dam construction with details of 43 on-going and 10 new projects, construction of irrigation networks. Then the output for connectivity includes road construction of 678.0 km, construction of bridges, 446.56 km of railway lines and 10 units of airport. (Investor Daily)
-RECOMMENDATION-
Investors Pay Attention to Current Account Data, which is projected to record a surplus. Influenced by improving exports and import adjustments in line with domestic demand that is not strong enough. If this is realized, it will record a surplus for the first time in 9 years. For the record, the current account has been in deficit since 4Q11. Makes BI to raise interest rates in order to attract foreign investors in the capital and financial account, so that it is expected to offset the current account deficit, which in turn can support the strengthening of the rupiah.
-REVIEW (Nov. 13, 2020)-
-PRICE OF BENCHMARK SERIES-
FR0081 (5yr): -2.6 Bps to 104.70 (5.32%)
FR0082 (10yr): -2.1 Bps to 105.25 (6.27%)
FR0080 (15yr): -3.6 Bps to 106.26 (6.81%)
FR0083 (20yr): -3.5 Bps to 103.24 (7.18%)
FR0086 (6yr): -2.1 Bps to 100.76 (5.33%)
FR0087 (11yr): -3.6 Bps to 101.29 (6.32%)
-YIELD OF GLOBAL BONDS-
UST 2yr: +0.003 point to 0.18%
UST 5yr: +0.015 point to 0.40%
UST 10yr: +0.016 point to 0.89%
UST 30yr: +0.010 point to 1.64%
German Bund 10yr: -0.012 point to -0.54%
UK Gilt 10yr: -0.010 point to 0.33%
-CDS OF INDONESIA BONDS-
CDS 2yr: +1.83% to 29.92
CDS 5yr: -7.88% to 72.39 (as of Nov. 10 2020)
CDS 10yr: +1.56% to 139.39
-CRUDE OIL PRICES-
WTI: -2.40% to USD40.13/Barrel
BRENT: -1.72% to USD42.78/Barrel
Source: Bloomberg
