Company Update

14 Maret 2023

Fixed Income Report March 14, 2023

Global Market Update
• Investors swarmed into safe haven asset as risk of financial crisis heightened driven by Silicon Valley Bank (SVB) and other bank collapse.
• Yield on the short term 2-year note decline sharply to below 4% last night. On the other hand yield on the long-term 10-year note fell 12 bps to 3.58%.
• US stock indices performance varied. Dow Jones and S&P fell but Nasdaq Composite rose 0.45%.
• The shutdown of SVB has jittered that probability of financial crisis increase and thus warning Fed about future tightening of monetary policy is unlikely.
• Market appetite also shifted. Bets on Fed to keep interest rates unchanged increase gradually with the probability of nearly 30% recently.
• Global government bond yields also declined reflecting current investors appetite towards safer asset to hedge against the possibility of economic fallout.

Domestic Market Update
• Most of domestic currency government bond prices increased on Monday (03/13/23).
• Yield on the benchmark 10-year (FR0096) declined 11 bps to 6.82% yesterday.
• The IDR strengthened against USD and closed at 15,377/USD on Monday (vs IDR15,450/USD last week).
• On the other hand, Indonesia’s 5-year CDS still increasing and currently stood at 102.78 bps.
• Current movement in local currency government bond prices also showed that investors tend to weight a safer assets

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 6.75-6.95% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0046, FR0081, FR0091, FR0096.

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