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Company Update

17 Juni 2022

Fixed Income Report June 17, 2022

Global Market Update
• Yields on benchmark 10-year UST note fell 9 bps to 3.20% on Thursday (06/16/22).
• Yields dropped after US central bank raised FFR by 75 bps to 1.50-1.75% on the previous day.
• Major US stock indices dipped in red last night. DJI declined 2.42%; S&P 500 dropped 3.25% while Nasdaq Composite lost 4.08%.
• Yield on Eurozone government bond continued to rose after BoE raised interest rate by 25 bps to 1.25% marking the fifth consecutive rate hikes this year.
• UK government bond yield increased with the benchmark 10-year note was closed 4 bps higher to 2.51%.
• BoE also sees that even with the aggressive rate hikes, the inflation pace could still jumped by 11% in Oct-22 according to the forecast.
• Furthermore, UK’s central bank also expect the output to shrink 0.3% this quarter.

Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) declined 3 bps to 7.37% on Thursday (06/16/22).
• The IDR weakened against USD and was closed at IDR14,768 yesterday (vs IDR14,745) in the previous day.
• Indonesia risk premium 5-year CDS jumped to 137.51 bps from previously at 105.16 bps.
• Indonesia's external debt ratio reached 32.5% of GDP in Apr-22, lower than the previous month's ratio of 33.8% in Mar-22.
• The decline in external debt was caused by a decline in the government's external debt position (-7.3% YoY), in line with the maturity of several series of government securities.

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 7.30-7.50% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0084, FR0090, FR0047, FR0052, FR0054, FR0091.

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