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Company Update

29 November 2021

Fixed Income Report - November 29, 2021

Global Market Update

• The 10-year U.S. treasury dropped 16 bps to 1.48% on Friday (11/26/21). U.S. treasury yields fell 4-18 bps along the curve.

• U.S. stocks market tumbled with DJI plunged 2.53%, S&P 500 decreased 2.27% and Nasdaq Composite edged down 2.23%. This significant drop further reflected in soaring S&P Volatility Index (VIX) that jumped 51% last Friday.

• U.S. oil price recorded a downfall of 13.04% to USD68.15 per barrel which considered as the lowest since Apr-20. While the international benchmark, Brent crude futures slipped 11.5% to USD72.72 per barrel.

• The huge fall in global market was attributable to the rising concern on Omicron, new Covid-19 variant from South Africa claimed to have a larger number of mutations. This variant has been widely spread to the U.K., Germany, Belgium, Netherlands, Denmark, Israel, Hongkong and Australia.

• Facing the surging of weekly deaths to 4,200 across EU and Central Asia, Italy, Czech Republic and Netherlands decided to introduce new pandemic restrictions. Meanwhile, Germany implements a tighter Covid passport rule, the U.K. suspends flights from six Southern Africa countries and Austria started to apply national lockdown.

• China reported an increase in its industrial profit to CNY818.7 bn (+24.6% YoY) in Oct-21, higher than the previous month’s of 16.3% YoY.

• Meanwhile throughout Jan to Oct-21, China’s industrial profit decelerated to a pace of 42.2% YoY. This figure was 2.5% lower than the Sep-21’s figure of 44.7% YoY, in line with the increase in its producer prices posing a great warning.

 

Domestic Market Update

• The 10-year Indo GB inched higher to 6.07% on Friday (11/26/21), still aligned with our daily forecast of 6.00-6.10%. • The value of IDR against USD depreciated to a level of IDR14,303/USD last Friday. Meanwhile, 5-year Indo CDS increased to 87.54 bps.

• During November 22-25, non-residents booked a net sell of IDR1.77tn in domestic tradable government bond (SBN) market.

• Bank Indonesia (BI) projected the Indonesian economy will grow to 4.7-5.5% in 2022, up from a range of 3.2-4.0% during 2021.

• This rise was attributable to the continuous global economic recovery, sustaining Indonesia’s strong export performance and boosting domestic demand due to the increase in consumption and investment. However, Covid-19 mutations remain a downside risk.

 

Market Projection

• Due to the increasing pressure in financial market globally due to the spread of new Covid-19 variant, we expect the 10-year Indo GB yield to move up towards a range of 6.05-6.15% today.

• Attractive Indo GB series to be traded today: FR0081, FR0084, FR0086, FR0071, FR0078.

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