Government Bond Highlights
At the government bonds (Surat Utang Negara, “SUN”) auction dated 05/02/2018, the Indonesian government absorbed the fund of IDR1.38 trillion from the total incoming bid of IDR5.53 trillion. The absorbed fund was lower the indicative target of IDR8 trillion. SPN-S 03112018, SUN with 6-month tenor obtained the biggest bid of IDR3.43 trillion. Indonesia Composite Bond Index (ICBI) closed higher by 0.25% into 242.01 in last week.

Global investors’ concerns on the U.S. monetary tightening pace was a logical takeaway for capital outflow from the emerging economies. From the domestic outlook, investors, particularly foreign investors negatively considered the release of under-controlled inflation in Indonesia. Indeed, investors noted that the Indonesian government’s concerted intervention in managing inflation likely disturbed the budget reforms.

The release of Indonesia’s 1Q18 GDP gives clues to the consistent growth acceleration. From the global outlook, China is estimated to post the April’s trade surplus after posting the March’s deficit.


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