Company Update

29 Mei 2024

Fixed Income Report May 29, 2024

Global Market Updates

• Wall Street equities had a varied performance on May 28, with the DJI fell by -0.55%, the S&P 500 edged up by +0.02%, and the Nasdaq rose by +0.59%.

• US stock indexes closed mixed on Tuesday, with the Nasdaq reaching a new high, while the Dow posting a 3-week low. A +6% rise in Nvidia propelled chip stocks and aided the broader market. The unexpected increase in US May consumer confidence also supported the economy and stocks, while a climb in the 10-year T-note yield to a 3-week high put pressure on the market.

• The 10-yr UST yields jumped by +8.0 bps to 4.54%, while the 2-yr yields rose by +1.0 bps to 4.94%. T-note yields rose after Fed's Kashkari emphasized the US economy's resilience and the need to monitor inflation before rate cuts. Yields further spiked on weak demand in the 2-yr and 5-yr T-note auctions.

• The Conference Board reported that the US May consumer confidence index unexpectedly increased by +4.5 to 102.0, surpassing expectations of a decline to 96.0.

• The US March S&P CoreLogic composite-20 home price index rose by +7.38% YoY, exceeding expectations of +7.30% and marking the largest increase in 17 months.

• Meanwhile in Asia, China's major cities have eased downpayment and mortgage requirements to support the property sector. This follows a CNY300bn (USD41bn) rescue package from the central bank to help local governments buy unsold homes.

• Global bond yields moved higher on Tuesday, the German bund yield increased by +4.5 bps to 2.59%, while the 10-yr UK gilt yield up by +2.0 bps to 4.28%. The Japanese 10-yr JGB yield rose by +0.5 bps to 1.03%.

Domestic Market Updates

• The Indonesian benchmark series of LCY government bonds ended lower on May 28, with the 10-yr benchmark yield grew by +0.20 bps to 6.88%, while the 2-yr yield edged up by +0.16 bps to 6.72%.

• The IDR weakened against the USD at Tuesday’s close (USD/IDR rose by +0.16% to 16,090). The Fed's decision to hold interest rates has exerted continued pressure on the Rupiah, with the Rupiah depreciating ~4% YTD.

• The state budget (APBN) showed a surplus of IDR75.7tn (0.33% of GDP) at the end of Apr-2024. State revenue by Apr-2024 reached IDR924.9tn (33% of the target), and state spending reached IDR849.2tn (25.5% of the ceiling).

• In Tuesday’s SUN auction, investors secured IDR22.0tn in winning bids from a total of IDR47.1tn. The series auctioned included new issuances of SPN03240828 and SPN12250529, along with the reopening of FR0101, FRSDG001, FR0100, FR0098, FR0097, and FR0102. Notably, FR0100 achieved the highest awarded bid, with a bid-to-cover ratio of 1.50x, securing IDR9.40tn from a total bid of IDR14.08tn.

• In Tuesday's Indo-GB series trading, FR0100 and FR0101 garnered significant interest in outright transactions, with the highest trade volumes of ID10.08tn and IDR7.12tn, respectively. Furthermore, FR0100, PBS038, and FR0101 exhibited high trading frequency.

Market Forecast
• Given the recent developments that unfolded within the global and domestic markets, we expect the 10-yr Indo GB yield to move within the range of 6.85-7.10% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0086, FR0064, FR0101, FR0087, FR0093.

Disclaimer On

FR81 FR86 FR64 FR101 FR87 FR93

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Fixed Income Report May 29, 2024