SUN Benchmark strengthened earlier in the week, amid investors still calculating the impact of the increase in subsidized fuel. Previously, BI reported that the inflation rate until the second week of September 2022 was 0.77% MoM, with the main commodities contributing to inflation including gasoline, rice and transportation fares.
Corporate Bonds
PTPP: Injects Capital to Business Entity. PT PP (Persero) Tbk (PTPP) injected capital of PP Semarang Demak worth IDR333.75 billion. Capital strengthening is carried out to meet operational needs. Meanwhile, the transaction is in the realm of affiliation in terms of share ownership, where the company controls 75% of PP Semarang Demak’s shares and then there are company representatives who serve as commissioners and/or directors of PP Semarang Demak. (Emiten News)
Domestic Issue
Energy Subsidy Spending in 2023 Agreed at IDR 211.9 Trillion. The government and the House of Representatives’ Budget Agency (Banggar) have agreed that energy subsidy spending next year will reach IDR 211.9 trillion. This figure is higher than in Presidential Regulation (Perpres) 98/2022 which only amounted to IDR 208.9 trillion. In next year’s energy subsidy spending, it includes fuel oil (BBM) subsidies of IDR 21.54 trillion, 3 kg LPG subsidies worth IDR 117.84 trillion and electricity subsidies of IDR 72.57 trillion. (Kontan)
Recommendation
September 2022 seen as the peak of the Fed’s Hawkish stance. Investors combined projections that the US is entering a period of deflation, with a forecast of a +75Bps hike in September FFR, drawing the conclusion that the Fed’s Hawkish peak will occur this month. US deflation is projected to occur at the consumer and producer levels. CPI and PPI Final Demand Aug. The US is projected to post -0.1% MoM deflation each. Meanwhile, the CME FedWatch survey estimates the probability of a September FFR hike of +75Bps to reach the level of 92%
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