The SUN market responded to the Fed’s commitment, all benchmark government securities recorded a decline in yields yesterday. Earlier, June’s FFR hike was 75 bps, or above the consensus of 50 bps. The Fed’s aggressive action is to reduce May’s high inflation, both at the consumer and producer levels. Meanwhile, based on Bloomberg survey data, BI will maintain the BI 7DRRR at the level of 3.50% at the RDG June 22-23 next week.
Corporate Bonds
MEDC: Profits Soar Over 1,000%. PT Medco Energi Internasional Tbk (MEDC) managed to record revenue of USD489.34 million or grew 62.06% YoY supported by rising oil and gas prices. Revenue from oil and gas sales contracts contributed 92.89% to revenues of USD454.55 Million. Meanwhile, the company’s net profit managed to soar 1,659.15% YoY to USD192.83 million. (Kontan)
Domestic Issue
The Minister of Finance will Press the State Budget Deficit. The Minister of Finance (Minister of Finance) will reduce the deficit in response to the US central bank The Fed which will raise interest rates up to 75 bps. Currently, the Ministry of Finance is focused on maintaining the State Revenue and Expenditure Budget (APBN) and reducing the country’s vulnerability to debt. Referring to Law No. 2, next year the deficit must be below 3%, or this year the deficit is smaller than 4.5% of Gross Domestic Product. (CNN Indonesia)
Recommendation
Global central banks adopted an aggressive Hawkish stance, disturbing concerns for both stock markets and domestic bond markets. The Swiss National Bank raised interest rates for the first time in 15 years. Meanwhile, the Bank of England raised its benchmark interest rate again, for the fifth time in a row this year, to 1.25% or the highest level since the global financial crisis in 2009. The last SUN auction was 2Q22, the government offered SPN03220921 (New Issuance), SPN12230622 (New Issue), FR0090, FR0091, FR0093, FR0092, and FR0089, on Tuesday next week.
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