Selling Abates on Improving Indonesia Market Sentiments
We see Indonesia bond market prices have recovered in last week trading with the yield on medium term bonds (5-7y) and long tenured bond (10y) tighten 7-11bps while short term bond only widen 3 bps. Recovery in corp bonds market was also seen in government bonds given foreign net sell minimized to Rp 1.2 trillion MTD (as of 29 Sept) as compared to a net sell of IDR 8 trillion in August. Reduced net foreign sell this month was driven by improving sentiment stemming from third stimulus package coupled with easing inflation data in September. We expect market will be colored by another positive sentiment from the announcement of third stimulus package which will contain fuel prices reduction.
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Top traded bonds last were: CIMB Niaga (BNGA:IJ) 11.3% 2017, Sukuk Muamalat 10.33% 2023 and PLN 12.55% 2019 that recorded trading frequency up to 13x. Selling pressure has caused the yield on CIMB Niaga 11.3% 2017 widen to 13.25% (+220bps WoW). The price of sukuk Muamalat 10.33% 2023 recovered with the yield inched down 40 bps to 13.51% amidst recent outlook downgrade by Pefindo. While the yield on PLN 12.55% 2019 was traded down 13 bps to 9.96%.
