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Weekly Update
Danareksa Weekly Report 2018, 23 Jan 2018 : Foreign Inflow Continuous
January 24, 2018 13:39

Government SBN auction
The Government held its SBN auction on 16 January 2018, selling the following series: SPN03180417, SPN12190104, FR0064, FR0065 and FR0075. In the auction, which had an indicative target of IDR17 trillion and maximum target of IDR25.5 trillion, the incoming bids reached IDR72.47 trillion. The proportion of incoming bids for each series was similar (from IDR13 trillion to IDR15 trillion). The total amount of winning bids reached IDR25.5 trillion. Total winning bids for the SPN03180417 and SPN12190104 series reached IDR5 trillion each, while for FR0064, FR0065, and FR0075 the total winning bids reached IDR7.05 trillion, IDR3.95 trillion, and IDR4.5 trillion, respectively.

On 23 January 2018, the Government will conduct another auction for the SBSN series, namely: SPNS10072018, PBS016, PBS002, PBS017, PBS012, and PBS004. The total indicative target for the upcoming auction is IDR8 trillion.

Strong demand for Government Bonds from foreign investors
The Indonesian bond market moved sideways last week. The Danareksa Government Bonds Yield Index dropped by 5bps from 6.01% to 5.96% at the end of last week. Compared to the end of 2017, the yield index is down by 25bps. The YTD total return is 2%.

The decline in yields in 2018 has been driven by the strong demand for Government Bonds from foreign investors. It can be seen that foreign holdings of Government bonds reached highs in both nominal (IDR874.8 trillion) and proportional terms (42.05% of the total outstanding) as of 18 January 2018. Foreign holdings are up by IDR38.6 trillion so far in 2018, a bigger increase than in the same period in 2017 (IDR11.7 trillion) and in 2016 (IDR4.54 trillion).

A Quieter week
Total trading in Government bonds in the secondary market reached IDR93.48 trillion last week with an average transaction of IDR16.8 billion. The total trading in Government bonds was less than in the previous week when trading reached IDR129.76 trillion with an average transaction of IDR14.9 billion. For corporate bonds, trading in the secondary market reached IDR4.09 trillion, up by IDR591 billion from the figure in the previous week.