SUN benchmark mixed, amid positive domestic economic data. Controlled inflation and continued expansion of manufacturing were positive catalysts for the government securities market. On the other hand, investors are still keeping an eye on external sentiment, which still stems from the potential for the Fed’s aggressive Hawkish to increase the FFR in September.

Corporate Bonds
INDY: Not to Increase Investment in Coal Sector. PT Indika Energy Tbk (INDY) has committed not to increase investment in the coal sector. The Company will focus on developing business diversification including in the electric vehicle sector, new and renewable energy, nature-based solutions, gold mining, logistics and infrastructure. Meanwhile, the company has begun to assemble its non-coal business diversification agenda, one of which is the electric motor industry through PT Ilectra Motor Group (IMG). (Kontan)

Domestic Issue
BPS: Indonesia Books 0.21% Deflation in August 2022. Statistics Indonesia (BPS) reported that in August 2022 there was a deflation of 0.21%, where there was a decline in the Consumer Price Index (CPI) from 111.80 in July 2022 to 111.57 in August 2022. Meanwhile, the main commodities contributing to deflation in August 2022 are shallots, red chilies, cayenne pepper, cooking oil, meat, and purebred chicken. Meanwhile the inflation rate for the calendar year (August 2022 to December 2021) is 3.63% and year-on -year inflation (August 2022 to August 2021) is 4.69%. (SindoNews)

Investors are observing the normalization of Statutory Reserves. Positive domestic economic data, with manufacturing expanding and inflation kept under 5%. Data shows S&P Global Indonesia PMI Mfg Aug. expands to level 51.7 (Jul. 51.3); and CPI Headline Aug. recorded deflation on a monthly basis at -0.2% (Jul. +0.6%); annual inflation was maintained +4.69% (Jul. 4.94%). In addition to BI which has raised BI 7DRRR +25Bps, the normalization of the rupiah statutory reserve requirement to 9% as of September, has the opportunity to make deposit rates increase gradually, in line with rising inflation expectations. The increase in CoF has forced banks to adjust loan interest rates in order to maintain NIM.

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