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Weekly Update
Danareksa Weekly Report, 20 Nov 2017 : Government Bond Supply is Running Low
November 20, 2017 17:25

India’s Rating is Upgraded
Moody’s upgraded India’s rating from Baa3 to Baa2 on 16 November 2017 – the first time India has been upgraded since 2004. The upgrade reflects Moody’s view that continued progress on economic and institutional reforms in India will enhance India’s high growth potential and its financing base for government debt. The move is expected to gradually reduce the Indian government’s debt burden in general. Last week, India’s 10-year yield curve increased 8bps from 7.06% to 7.14%.

Foreign Investors were Net Buyers
The Danareksa Govt Bonds Yield Index declined slightly by 2bps last week from 6.21% to 6.18%. The decline followed an increase in foreign holdings of Government bonds. As of 16 November 2017, foreign holdings were recorded at IDR816 trillion or up by IDR4 trillion from the previous week. During November, foreign net buying reached IDR19.18 trillion after the net selling of IDR23.2 trillion in October. The decline in bond yields last week did not come as a surprise given that there is a limited supply of government bonds towards the year-end. According to the schedule, there are only 3 auctions remaining (including this week’s auction) before the end of the year.

Top 10 Most Traded Corporate Bonds in 2017
As of 17 Nov 2017, the total trading in corporate bonds reached IDR203.9 trillion with total frequency of 22,199 trades during 2017. Federal International Finance (FIFA) has been this year’s most traded bond with total trading reaching IDR12 trillion (6.3% of the total trading) with an average trade of IDR16.16 billion. Lembaga Pembiayaan Ekspor Indonesia (BEXI) was the second-most traded bond with total trading reaching IDR10.5 trillion (5.15% of the total trading) with an average trade of IDR12.21 billion.