Government Bond Highlights
At the government bonds auction (Surat Utang Negara, “SUN”) dated April 10, 2018, the Indonesian government absorbed the fund of IDR21.85 trillion from the total incoming bid of IDR37.72 trillion. The amount absorbed was lower that the indicative target of IDR17 trillion. FR64, the SUN with the 10-year tenor and the amount of IDR11.3 trillion obtained the biggest bid. Indonesia Composite Bond Index (ICBI) nudged up by 0.05% into 245.93.
President Xi Jinping’s speech subdued global market conditions and boosted investors’ confidence. The more conducive global markets amid the expectancy of China’s stable GDP growth allowed investors to focus on the recovery in the domestic consumption.
In the domestic outlook, the positive sentiment derived from the rebound in retail sales and upgraded rating of Indonesia’s government bonds from Baa3 into Baa2. The upgraded rating subdued investors’ concerns about the looming headwind of Indonesia’s unstable fiscal and macroeconomics conditions triggered by authority leaving the tariff of subsidized fuel unchanged.
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