Foreign is continuing to chase bonds in the secondary market after Tuesday’s auction. According to PLTE data, foreign reported net buy of Rp1.1tn – two days straight of net buys by foreign investors (will be reported in the bond flows data by DMO on Thursday and Friday). Foreign’s net buy was mostly on benchmark series, totaling Rp1.4tn on Wednesday.

As a result, almost all the benchmark bond prices were up, sending yield lower. The 5yr FR0063 traded at 90.1 (+0.2%), yielding 8.24% (-4 bps); the 10yr FR0064 traded at 84.6 (+0.3%), yielding 8.5% (-4.8 bps); the 15yr FR0065 traded flat at 83, yielding 8.7% (-0.3 bps); and the 20yr traded at 87 (+0.4%), yielding 8.91% (-3.8 bps). Foreign ownership in government bond based on settlement date as of 8-Oct was reported at Rp849.6tn (outflow of Rp1.3tn mtd and inflow of Rp13.5tn ytd) or 37% of total outstanding.

Meanwhile, JCI was also up 0.4% to 5,820.7 (-2.6% mtd or -8.4% ytd) with foreign investors reported net outflow of Rp575bn (outflow of Rp4.2tn mtd or outflow of Rp55.3tn ytd). Rupiah also appreciated 0.25% to Rp15,200/USD (depreciated 2% mtd or 12% ytd).

On the global market, US Stock market plunged with Dow Jones decreasing by 3.15% to 25,598.7 and S&P 500 falling 3.29% to 2,785.7, – the fifth straight decline due to surging bond yields and fresh concern about the impact of trade war with China. US Treasury prices rose with the 10-year US Treasury yield falling by 5 bps to 3.16%. (Source: Mandiri Sekuritas)

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