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

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.

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Danareksa Weekly Report, 16 Jan 2018 : A Calm Week
January 24, 2018 13:38 WIB

Moving sideways
The Danareksa Govt Bonds yield index moved sideways last week. The yield index closed at 6.01% or down 3bps during the week. The total return YTD as of 12 January 2018 reached 1.61%, slightly higher than in the same period last year when the total return was 1.49%. Moreover, the spread between the 10-year yield curve and 2-year yield curve or yield slope did not significantly change. Over the week, the yield slope was up slightly from 106bps to 108bps.

Total trading in Government bonds in the secondary market reached IDR129.8 trillion last week or up IDR17.1 trillion from the figure in the previous week. For corporate bonds, trading in the secondary market increased by IDR612 billion to IDR3.1 trillion.

Incoming bids for SBSN reached more than IDR32 trillion
On 9 January 2018, the Government held an auction for SBSN series, namely SPNS10072018, PBS016, PBS002, PBS017, PBS012, and PBS004. PBS017 is a new series which will mature on 15 October 2025 carrying a coupon rate of 6.125%. From the auction, it is known that total incoming bids reached IDR32.3 trillion. Investors were most interested in the SPNS series with incoming bids of IDR10.64 trillion, followed by PBS016 with incoming bids of IDR7.2 trillion. This indicates that investors tended to have a preference for short tenors. Meanwhile, the winning bids for the six-series amounted to IDR13 trillion with winning bids for the PBS016 series reaching IDR4.37 trillion with a bid to cover ratio of 1.65.

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Danareksa Weekly Report, 09 Jan 2018 : Higher Optimism
January 10, 2018 07:36 WIB

High incoming bids in the first auction in 2018
The Government of Indonesia has selected the government bond benchmarks for 2018, namely: FR0063 (5-year), FR0064 (10-year), FR0065 (15-year), and FR0075 (20-year). Through the first auction in 2018 held on 3 January 2018, the auction of SPN03180404, SPN12190104, FR0063, FR0064, and FR0075 recorded incoming bids of IDR 86,208,400,000,000 (eighty six trillion two hundred and eight billion million rupiah). The incoming bids reached the highest amount. Meanwhile, the winning bids reached IDR25,500,000,000,000 (twenty five trillion five hundred billion rupiah). The bid to cover ratio for each series reached 2.74x and 2.68x for SPN03180404 and SPN12190104, respectively, while the bid to cover ratio for FR0063, FR0064, and FR0075 was 5.37x; 3.34x; and 3.17x, respectively.

Decline in Govt bond yields in the beginning of the year
On 19 December 2017, Fitch upgraded Indonesia’s Long-Term Foreign- and Local-Currency Issuer Default Rating (IDRs) from BBB- to BBB with a stable outlook. This upgrade reflects Indonesia’s ability to better withstand external shocks and the improving macroeconomic stability. Based on the Danareksa Govt Bond Yield Index, the yield on Indonesian Government Bonds declined by 18bps from 6.22% to 6.04% in the period from 29 December 2017 to 5 January 2018. Meanwhile, the 5-year CDS dropped to 79bps in the same period.

Foreign investors were net buyers
In line with the declining Govt Bonds yield, total foreign holdings of Indonesian Govt Bonds also increased. As of 5 January 2018, total foreign holdings grew by IDR12.81 trillion to IDR848.96 trillion compare to closing at the previous week. The proportion of foreign ownership to the amount outstanding reached 40.3%, up 0.5% compare to 29 December 2017. The proportion reached the highest level since 28 September 2017. The total amount outstanding as of 5 January 2018 stood at IDR2,106.60 trillion or up IDR6.83 trillion from IDR2,009.77 trillion in the previous week.

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Weekly Report Oct 2017
Country's FCLT Rating
S & P BBB-
Moody's Baa3
Fitch BBB-

Key Market Editor
BI Rate 4.25%
JCI 5,915.00
IDR 13.52
Inflation Sep 2017(%YoY) 3.72%

Market Outstanding
Government Bond IDR 2,060.70 bn
Corporate Bond IDR 371.60 bn

Last Week Trading Volume
Government Bond IDR 73.32 bn
Corporate Bond IDR 4.85 bn

Government Bond Indices
Price Index 134.87
Yield Index 6.23%
Total Return 557.70

Benchmark Yield
FR0061 5 Year 6.19%
FR0059 10 Year 6.53%
FR0074 15 Year 7.13%
FR0072 20 Year 7.32%