Global Market Update
• On Monday (09/06/21), was set as U.S. public holiday commemorating Labor Day.
• Last week poor job reports was disappointing with the Non Farm Payroll (NFP) figure was far lower than the expected.
• U.S. reported an addition of only 235,000 jobs in August-21 according to the Labor Department. Economist surveyed by Dow Jones had been looking for 720,000 new hires.
• The 10 year U.S. treasury yield rose 5 bps to 1.33% on Friday (09/03/21). While U.S. stock market closed mixed last week.
• DJI and S&P 500 experienced a correction of 0.21% and 0.03% respectively. The tech heavy Nasdaq Composite added 0.21%.
• Government bond yield in some DM countries such as U.K, Germany and Japan rose on a weekly basis.
Domestic Market Update
• ICBI closed at 328.06 yesterday gaining 0.05% from last day of the previous week trading session mainly driven by the government bond. The 10 year Indo GB yield was flat at 6.098%. IDR continued its appreciation against USD to 14.228/USD.
• Meanwhile at the same time 5 year Indo CDS remained stable below 70 bps.
• During period of Aug 30 – Sep 2, foreign investors recorded a net buy in the government bond market with the total amount of IDR10.57tn.
Market Projection
• On Tuesday (09/07/21), government will conduct a sovereign sharia securities for 6 series.
• The 6 series to issued are : SPN-S 08032022 (new issuance) and 5 series of Project Based Sukuk (PBS) including PBS031, PBS032, PBS029, PBS004 and PBS028 with the indicative target set at IDR 10tn.
• We expect the indicative target can be achieved driven by several catalysts such as : 1) investors ample liquidity; 2) high demand for fixed income assets amid limited supply of less risky asset in 2H21; and government cuts on Bond Income Tax for domestic investor to 10% from previously 15%.
• We foresee 10 year Indo GB yield to move within range of 6.10%-6.20% today.
• Attractive Indo GB series to be traded : FR0086, FR0071, FR0078, FR0082, FR0087, FR0068 and FR0080.
Disclaimer
