Government Bonds
The Government Bond (SUN) market closed mixed, after investors paid close attention to the Fed chairman’s statement. That the increase in US inflation will be temporary. This statement also emphasizes that the US economy is strengthening, even though it is still affected by the Covid-19 pandemic. The movement of SUN yesterday, amid rising UST yields, after two Fed officials warned that high inflation may last longer than market anticipation.
Corporate Bonds
idAAA Rating for Bank CIMB Niaga Bonds. The Indonesian Securities Rating Agency (Pefindo) has affirmed its idAAA rating for Bank CIMB Niaga’s Shelf-Registered Bonds II Phase IV 2018 Series B of IDR 137 billion which will mature on September 20, 2021. CIMB Niaga’s readiness to pay the maturing bonds is supported by its placement in Bank Indonesia amounting to IDR 13.5 trillion as of April 30, 2021. (Kontan)
Macroeconomy
World Bank Suggests To Increase Excise Tariffs on Tobacco Products. The World Bank in its report entitled Indonesia Economic Prospects suggested that the Indonesian government increase the excise rate on tobacco products (CHT) or cigarettes in 2022. This method is believed to be able to increase state revenues next year. The World Bank also believes that the Indonesian government can simplify the current CHT structure, which consists of ten layers. Thus, more and more cigarette industries are depositing excise taxes at higher rates than currently. (Kontan)
Recommendations
New Daily Cases of Covid-19. The increase in new daily cases of Covid-19 in Indonesia has become the main focus of the weekend government securities market. From the global side, investors are also watching the release of one of the inflation data. In addition to the short tenor SUN, market participants can start paying close attention to PBS027 (1.9-year); PBS017 (4.3-years); PBS030 (7.1-years); PBS029 (12.7-years); and PBS028 (25.3-years). The five Sukuk series will be offered at auction next week.
