Company Update

29 September 2021

Fixed Income Report - September 29, 2021

Global Market Update

• The U.S. treasury yields curve experienced a steady increase with the 10 year rate rose more than 6 bps to 1.56% on Tuesday (09/28/21). • Meanwhile the longer maturity of 30-year tenure added nearly 10 bps reaching to 2.1%. This weas the highest yields since June-21.

• The Fed’s official said that the economy continued to strengthen, however it is facing an upward pressure from inflation caused by supply chain disruption and low based effects. • The Fed’s chair Powell also reiterated that inflation will remain elevated in the coming months.

• The 10 year U.S. treasury yield has risen more than 20 bps on a weekly basis.

• Rising U.S. treasury yield was also accompanied by higher global government bond yields across EM and DM countries. • Last night U.S. equity market tumbled with tech heavy Nasdaq Composite dropped by 2.83% while DJI closed 1.63% lower and S&P 500 declined by 2.04%.

• Rising U.S. treasury yields was the major cause of U.S. stock sell off.


Domestic Market Update

• The 10 year Indo GB yield nearly flat at 6.20% on Tuesday (09/28/21) and remained within our forecast range of 6.15%-6.25% so far.

• However the benchmark government bond yield has risen by 4 bps in a week. • 5 year Indo CDS topping more than 80 bps while rupiah depreciated to IDR 14,273/USD.

• Government successfully raised IDR12tn funding from yesterday's debt securities auction. Total incoming bids were at IDR58.83tn.

• In the last auction conducted yesterday, government has set the indicative target lower from previous auction. Total incoming bids were also lower from previous auction. However the weighted average yield awarded rose for every series awarded. This was in line with the secondary market performance indicated by higher yield driven by rising government bond yields globally.


Market Projection

• We expect the 10 year Indo GB yield to rise again and moving within range of 6.20% - 6.20% today on the back of rising U.S. treasury yield.

• Attractive Indo GB series to be traded today : FR0086, FR0090, FR0064, FR0071, FR0078, FR0082, FR0087, FR0091, FR0088, FR0075.


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