Government Bond Highlights

At the government bond (Surat Utang Negara, “SUN”) auction dated 07/10/18, the government secured the proceeds of IDR8.0 trillion from the total inflow bid of IDR12.53 trillion. The amount of secured funds was higher than the indicative target of IDR4 trillion. SPN-S 11012019, SUN with 6-month tenor obtained the biggest bid of IDR5.07 trillion. Indonesian Composite Bond Index (ICBI) closed on a high note of 1.1% to 236.85 last week.

The spreads between 2-year bond yield and 10-year bond yield tumbled at 2-year lowest level. SUN is settling at flat curve due to the dollar liquidity tightening. Despite Bank Indonesia (BI)’s stance of higher benchmark rate aiming at cushioning jitters of rupiah depreciation, rupiah is still depreciated as investors’ concerns about the ever-escalating trade war between the U.S. and China.

In this week investors eye on BI’s stance of 7-Day Reverse Repo Rate. The consensus showed that BI held its 7-Day Reverse Repo Rate unchanged.


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