Company Update

08 Februari 2023

Fixed Income Report February 8, 2023

Global Market Update
• Yields on the benchmark UST note continued to climb after having a downtrend movement since the beginning of the year.
• The benchmark 10-year yield increased 4 bps to 3.68%, while the shorter benchmark of 2-year yield jumped 3 bps to 4.47%.
• US stock indices rebounded yesterday. The DJI increased 0.78%, whereas S&P 500 and Nasdaq Composite jumped 1.29% and 1.90% respectively.
• US tech stocks continued to rebound in early 2023, reverting last year trend. US stock market also increased despite the jump in government bond yield.
• The Reserve Bank of Australia raised its benchmark policy rate by 25 bps to 3.35% broadly in-line with market expectation.
• RBA became another central bank that continue to hike its benchmark rate in the beginning of 2023.
• Cumulatively, RBA has raised 325 bps in a series of 9x rate hike and marked the sharpest tightening since 1989.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 3 bps to 6.70% on Monday (02/07/23).
• The government benchmark yield increased following global yields, IDR depreciation and rising CDS.
• The IDR weakened against USD and was closed at IDR15,148/USD after previously moving below IDR15,000/USD last week.
• Indonesia’s 5-year CDS also increased to 86.61 bps after consistently hovering below 80 bps last week.
• Government of Indonesia has issued 6 series of SBSN amounting of IDR14tn from the total incoming bids that hit IDR26.26tn in yesterday’s auction.
• Bank Indonesia reported domestic FX reserves increased to USD139.4bn in Jan-23 from USD137.2bn in Dec-22 on the back of government global bond issuance and tax and service receipts.
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to move within a range of 6.60-6.80% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR040, FR0078, FR0085, FR0054, FR0096, FR0045, FR0050.
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