Company Update

15 Maret 2023

Fixed Income Report March 15, 2023

Global Market Update
• Markets still assess the likelihood of financial crisis after SVB collapse driven by liquidity and solvency problems.
• Yields on US government bond jumped with 2-year note increased 22 bps in a day to 4.25% last night after declining 59 bps on Monday.
• At the same time, 10-year yield also recorded an increase of 17 bps in a day to 3.69%.
• US stock indices rebounded last night despite rising government bond yield. Nasdaq Composite led the gain with 2.14% appreciation.
• Furthermore, US reported annual inflation rate of 6% YoY in Feb-23 in-line with broad market expectation.
• Market also see a 25 bps hike for Mar-23 FOMC meeting as SVB collapse is expected to limit room for more aggressive tightening.

Domestic Market Update
• Most of domestic currency government bond prices increased on Tuesday (03/14/23).
• Yield on the benchmark 10-year (FR0096) was steady at 6.82% yesterday.
• The IDR weakened against USD and closed at 15,385/USD on Tuesday (vs IDR15,377/USD last week).
• On the other hand, Indonesia’s 5-year CDS keeps on increasing and currently stood at 108.89 bps.
• SUN auction results : total incoming bids hit IDR52.7tn and nominal won of the 7 series offered IDR20tn yesterday.
• The incoming bids were higher than in previous auction (28 February 2023) which hit IDR46tn.
• FR0095 and FR0096 were highly demanded by investors reflected by the incoming bids which accounted 64% of total incoming bids.
• Markets will also look at Indonesia’s Feb-23 trade balance data release today and expect another surplus of USD3.27bn.

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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