Company Update

29 Desember 2021

Fixed Income Report - December 29, 2021

Global Market Update

• The 10-year U.S. treasury left unchanged at 1.48% on Monday (12/27/21). U.S. treasury yields slightly rose by 1-2 bps along the curve.
• U.S. stocks market varied last night with DJI gained 0.26%, hitting its 5-days streak. At the same time, S&P 500 fell 0.10% while Nasdaq Composite edged down 0.56%.
• U.S. Centers for Disease Control and Prevention recently loosened the recommendation for isolation and quarantine time to 5 days for those who tested positive or were exposed to someone with Covid-19.
• The house price in the U.S. increased 18.4% YoY in Oct-21, to a level of 273.8 as reported by S&P/Case Shiller index. This pace softened from the previous period’s at 19.1% YoY and slightly lower than the consensus of 18.5% YoY.
• Japan’s industrial production surged to 7.2% MoM in Nov-21, well above the market projection at 4.8% MoM shown in its Ministry of Economy, Trade and Industry’s preliminary report.
• This huge jump primarily driven by the improvement within the auto sector as the global supply for parts recovered, in which the cars production increased 43.1% from the prior month.
• Consumer confidence in South Korea lowered to 103.9 in Dec-21, below the Nov21’s figure of 107.6.
• Bank of Korea noted that the households were less optimistic upon the current and future state of economy, as well as their future spending amid tighter social restrictions being applied until the first week of Jan-22.

Domestic Market Update
• The 10-year Indo GB inched up 2 bps to 6.34% on Tuesday (12/28/21), remained in line with our daily forecast range of 6.25-6.35%.
• The value of IDR against USD slightly unchanged at IDR14,228/USD yesterday. Meanwhile, 5-year Indo CDS dropped to 73.32 bps.
• Indonesian Ministry of Health reported the first local transmission of Covid-19 Omicron variant bringing the total cases to 47.
• Recent research and publications have shown that Omicron variant has lower risk of hospitalization compared to Delta.
• However with the fast spreading of the virus variant and now is found in more than 100 countries only in a month, it remains the downside risk to the economic recovery.

Market Projection
• Given the recent development, we expect the 10-year Indo GB yield to move within range of 6.25-6.35% today.
• Attractive Indo GB series to be traded today: FR0081, FR0084, FR0086, FR0090, FR0071, FR0078, FR0082, FR0087, FR0091, FR0092.

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