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Company Update

05 Juli 2022

Fixed Income Report July 5, 2022

Global Market Update
• US financial market was closed on Monday (07/04/22) commemorating the independence day.
• Yields on Euro Zone government bond recorded an increase to start this week.
• Market sentiments are still influenced by : 1) inflation and quantitative tightening; 2) war between Russia and Ukraine; 3) trade protectionism and 4) Covid-19 development.
• Given the downside risks, Bloomberg also recorded an outflows from EM Asia throughout 2Q22 amounting to USD40bn.
• Massive outflows has created currency depreciation amidst strengthening safe haven USD.
 
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) was nearly flat at 7.26% on Monday (07/04/22).
• The IDR weakened against USD and was closed at IDR14,972 yesterday vs IDR14,943 last week.
• Indonesia’s risk premium 5-year CDS was closed still above 140 bps yesterday.
• The government will conduct an auction of 7 series of SUN with an indicative target of IDR15-22.5 trillion on Tuesday (07/05/22).
• The government lowered the indicative target from the previous IDR20-30 trillion in line with lower issuance needs and declining market appetite amidst the global monetary tightening cycle.
 
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 7.25-7.45% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0081, FR0084, FR0090, FR0047, FR0052, FR0054, FR0091.
 
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