SUN Benchmark Mixed amid Cadev Increase. The movement of the SUN Benchmark yesterday, amid the release of Cadev data in June which rose to the level of USD136.4 billion. Previously, we projected that Cadev in June could be under pressure again, due to the depreciation of the Rupiah, payment of USD denominated debt, and the absence of the June Global Bond issuance based on DJPPR data. For the record, Cadev as of May was at the level of USD135.6 billion. Next week, the Government will offer six series in the Sukuk auction, namely SPNS 10012023, PBS031, PBS032, PBS029, PBS034, and PBS033.

Corporate Bonds
GIAA: Right Issue Jumbo. PT Garuda Indonesia Tbk (GIAA) will receive state capital participation through a rights issue. The government will carry out its rights issue and deposit new capital in Garuda Indonesia of IDR 7.5 trillion. The Company hopes that this can strengthen the capital structure and increase the ability of cash to meet working capital needs. (Kontan)

Domestic Issue
Tax Amnesty Volume II Raise Cadev. Bank Indonesia (BI) reported that Indonesia’s foreign exchange reserves at the end of June 2022 were recorded at USD 136.4 billion. This amount has increased compared to the position of foreign exchange reserves at the end of May 2022 of USD 135.6 billion. The increase in the position of foreign exchange reserves in June 2022 was influenced, among other things, by the issuance of government global bonds as well as tax and service revenues. To note, in early June 2022, Indonesia succeeded in issuing Samurai Bonds with a nominal benchmark size of JPY 81 billion or equivalent to IDR 9.04 trillion. (Kontan)

Recommendation
The issuance of JPY81B Samurai Bonds propelled the June Cadev up to the level of USD136.4 Billion. This positive sentiment amidst the flatness of the rupiah at the psychological level of IDR15,000/USD. Investors are still watching the Core CPI of 2.63% YoY, which is still below the middle value of BI’s 2%-4% target, making some market players see that BI will not necessarily increase the BI 7DRRR this July, even though the Headline CPI has exceeded BI’s annual target. Next week, the Government will offer six series in the Sukuk auction, namely SPNS 10012023, PBS031, PBS032, PBS029, PBS034, and PBS033.

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