The increase in US Treasury (UST) yield again put pressure on the Government Securities (SUN) market yesterday, as the 10-year UST yield rose 8.6 bps to 1.48%. This figure is still at the highest level since February 2020. The increase in UST yield worries market players that the Fed could tighten monetary policy. The increase in UST yield also has the risk of triggering capital outflows in the Indonesian bond market, as the difference between UST yield and SUN has narrowed. Currently, the UST yield spread with the yield on SUN is around 505 bps. Yesterday, the majority of SUN closed lower, with the yield on 10-year benchmar SUN FR0087 rising nearly 4 bps to 6.55%.
TPIA Bond Ceiling Worth IDR 3.4 Trillion. Chandra Asri Petrochemical Tbk. (TPIA) will continue to take advantage of the issuance of rupiah-denominated bonds as a financing strategy. Currently, the company has pocketed a ceiling of IDR 5 trillion from the Financial Services Authority (OJK) in August 2020 to issue bonds. Currently, TPIA has used this ceiling of IDR 1.6 trillion, leaving IDR 3.4 trillion in bond issuance whose validity period will expire in August 2022. In 2021, a subsidiary of Barito Pacific Tbk. (BRPT) estimates that it can issue bonds denominated in rupiah as much as IDR 1 trillion. (Bisnis Indonesia)
Government Provides Facilities for Importing Medical Devices and Vaccines. The government has provided facilities for imports of medical equipment and vaccines amounting to IDR 825.33 billion. According to data compiled from the Directorate General of Customs and Excise of the Ministry of Finance, as of February 15, 2021, the total customs facilities provided by the government amounted to IDR 825.33 billion of the total import value of IDR 4.52 trillion. This consists of customs facilities for imports of medical devices amounting to IDR 234.26 billion. Then, the IDR 591.06 billion facility provided for the import of vaccines totaling 29.3 million doses. (Kontan)
UST Yield Sentiment Hit Market Weekend. Based on data from the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance, foreign investor ownership in Government Securities (SBN) has decreased since the UST yield increase. Foreign ownership of Indonesian bonds worth IDR 992.91 trillion, as of last February 16. meanwhile, as of March 1, it was IDR 967.97 trillion. This indicates a capital outflow of nearly IDR 25 trillion during that period. Yesterday, the rupiah depreciated 0.14% against the US dollar to a level of IDR 14,260 / USD. In the short term, investors can look back at FR0087, FR0088, and FR0083.