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Weekly Update
Danareksa Weekly Report 2018, 30 Jan 2018 : High Demand for Shorter Tenor
January 30, 2018 13:18

The increase of Danareksa Government Bond Yield Index
Indonesian bond prices tended to decline last week. Over the week, the Danareksa Government Bonds Yield Index rose by 7bps to 6.04% at the end of last week recording a total loss of 0.44%. Based on changes in the yield, the greatest pressure was seen in the long tenors. It can also be seen in secondary market activity last week. Total trade volume Government bond last week rose by IDR2.4 trillion from IDR93.4 trillion to IDR95.8 trillion. However, short-tenor series (less than 6-year) recorded highly increase amounted by IDR6.6 trillion while long-tenor series grew only by IDR4.2 trillion.

Greater demand on short-term tenor in Government bond auction
The Government held its latest SBSN auction on 23 January 2018, auctioning the following series: SPNS10072018, PBS016, PBS002, PBS017, PBS012, and PBS004. At the auction, which had an indicative target of IDR8 trillion, incoming bids reached IDR28 trillion. In particular, investors eyed bonds with short tenors such as SPNS10072018 which received total incoming bids of IDR14.73 trillion or more than half of the total incoming bids. The amount of winning bids reached IDR8.63 trillion. However, there were no winning bids for the series PBS012. Overall, the Government has collected IDR72.63 trillion from its auctions so far in the first month of 2018 or amounting to 8.58% of the total targeted gross issuances.

The Government will conduct another auction on 30 January 2018 for the following SBSN series: SPN03180430, SPN12190131, FR0063, FR0064, and FR0065. The total indicative target for the upcoming auction is IDR17 trillion with a maximum target of IDR25.5 trillion.