Company Update

24 Maret 2023

Fixed Income Report March 24, 2023

Global Market Update
• Yields on the benchmark US Treasury notes have lowered along the curve as fear of recession lingers.
• The benchmark 10-year government bond yield stood at 3.43% on Thursday (03/23/23).
• US stock market gained last night with Nasdaq Composite led the return after appreciating 1.01%.
• Fed has delivered 25 bps hike on Wednesday, in-line with broad market expectation.
• Despite Fed’s pivot scenario to be unlikely this year, a slower rate hikes or even pause may be on the table.
• Fears of high inflation has recently shifted to alarming recessions. Fed’s Chair Powell also said that central bank’s battle to bring down inflation to 2% is still long way to go and may face a bumpy road.
• Yet, SVB, Silvergate and Signature Bank collapse triggered policy makers changed their tone from a very hawkish to be least hawkish.
Domestic Market Update
• Domestic currency government bond prices closed mixed on Tuesday before market holiday (03/21/23).
• Yield on the benchmark 10-year (FR0096) was flat and stayed at 6.88% yesterday.
• The IDR strengthened against USD and closed at 15,345/USD on Tuesday (vs IDR15,360/USD on Monday).
• Before market holiday, Indonesia’s 5-year CDS recorded a decline from 120 bps on Monday to 113 bps on Tuesday.
• SBSN auction result (03/21/23) : total incoming bids hit IDR23.5tn and amount issued IDR11tn.
• Total incoming bids were higher than previous SBSN auction of IDR20tn on March 7, 2023.
• Investors appetite remain on a short-term maturity PBS in response to recent uncertainty and volatility risk.
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 : FR0070, FR0077, FR0081, FR0091, FR0096.
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