Company Update

02 Maret 2023

Fixed Income Report March 2, 2023

Global Market Update
• Yield on the US treasury notes recorded an increase along the curve yesterday (03/01/23).
• The benchmark 2-year and 10-year yield rose 6 bps respectively to 4.88% and 3.99%.
• US stock indices were mixed yesterday. The DJI was slightly up by 0.02% while S&P 500 and Nasdaq Composite fell 0.47% and 0.66% respectively.
• The ongoing concern about a still high inflation has outweighed US financial market, the DXY has found its support due to the possibility of higher than anticipated peak and terminal rate.
• On the other hand, China reported an expansion in its manufacturing activity in Feb- 23.
• The official NBS manufacturing PMI increased to 52.6 in Feb-23 beating consensus estimate of 50.5 and higher than previous month of 50.1.
• China’s manufacturing activity expansion occurred in the last 2 consecutive months after easing the Covid-19 measures, which sparked a growth expectation among market players.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) dropped 3 bps to 6.84% on Wednesday (03/01/23).
• The IDR slightly strengthened against USD and was closed at IDR15,235/USD yesterday after previously closed at IDR15,261/USD on Tuesday.
• Indonesia’s 5-year CDS stayed below 100 bps and closed at 92.35 bps yesterday, lower than previous day of 93.05 bps.
• Statistics Indonesia reported an annual inflation of 5.47% YoY in Feb-23. The actual annual inflation was higher than consensus estimate and previous month pace of 5.44%/5.28% YoY driven by extreme weather that impact on food supply and government policy transmission.
• Despite higher than expected headline inflation, a core inflation as a prefer inflation gauge for BI remained manageable at 3.09% YoY and this may firming BI’s stance to keep interest rate unchanged in the future meeting.
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 6.80-7.00% for today.
• Attractive Indo GB series to be traded today : FR0046, FR0070, FR0077, FR0044, FR0081, FR0086, FR0096, FR0098.
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