Green Shoe Option, government aggressively won PBS028
Weighted Average Yield (WAY, Weighted Average Yield) PBS028 which was 4 bps lower than the previous auction.
Undersubscribed, the government implemented a Green Shoe Option
Apart from the low interest in PBS003, the government only won yesterday’s Sukuk auction worth IDR 6.4 trillion or below the indicative target of IDR 10 trillion.
Market mixed at the beginning of the week
Based on Bloomberg data, the 15-year and 20-year benchmark SUN experienced lower prices.
External Sentiment Colored Market Weekend
The US released data on US jobless benefits claims for the week of 870 thousand people. This figure is more than the market estimate of 850 thousand claims.
Recession Issue Still Pressing Domestic Bond Market
The Minister of Finance projects that Indonesia’s GDP in 3Q20 will contract between 1% and 2.9%, it may even continue until the 4Q20 period. Meanwhile, the Minister of Finance projected domestic GDP to shrink 0.6% -1.7% on an annual basis.
Short-term volatility, investors are interested in FR0083
Investors are still responding negatively to the uncertainty over the end of the pandemic in Indonesia, as positive cases increase to record highs again. Previously, market players had also observed the imperfect economic recovery.
Recession Projection Pressures SUN Auction
The Minister of Finance projects Indonesia’s GDP for the 3Q20 period to grow negatively or contract by -1% to -2.9%. Meanwhile for 2020, the projection is at -0.6% to -1.7%.
BMRI – Liquidity Excess to Support Expansion
BMRI’s current liquidity is fairly relaxed, in line with the gradually decreasing Loan to Deposit Ratio (LDR). As of March 2020, BMRI LDR was at 94.9%, then decreased to 87.7% in June 2020.
SUN Mixed amidst CDS Increase
The movement of SUN benchmark at the beginning of the week was mixed. A number of investors are again hunting for safe haven assets, amid the spike in Covid-19 cases in Europe and Indonesia.
