Daily Commentary (12-Oct):

INDOGB has continued losses on Friday with the 10yr government bond yield up 5 bps to 8.76% (+64.2 bps mtd or +243.8 bps ytd). Based on PLTE data, trading volume in the secondary market was at Rp15.3tn with reported foreign net inflows of Rp665bn. Specific for benchmark series, foreign also posted net buy of Rp302bn, mostly for 5yr tenors, while for the 10yr FR64 bond series, foreign was reported posting net sell (-Rp217bn). Foreign ownership in government bond based on settlement date as of Oct 11 was at Rp850tn (outflow of Rp0.8tn mtd and inflow of Rp13.9tn ytd) or 37% of total outstanding.

Meanwhile, JCI was up 0.9% to 5,756.5 (-3.7% mtd or -9.4% ytd) on Friday, although foreign investors were still reported posting net outflow of Rp1.2tn (outflow of Rp6.5tn mtd or outflow of Rp57.7tn ytd). Rupiah also appreciated 0.2% to Rp15,205/USD (depreciated 2.03% mtd or 12.1% ytd).

Thus, over the week, JCI was up 0.43%, the 10yr government bond yield was up 37.9 bps, and rupiah depreciated by 0.14% against USD. The market will wait for the September trade data, which will be released today. Market consensus sees that trade balance in September is improving but still at deficit of Rp0.5bn (vs. -1.02bn in August).

On the global market, stocks recouped a chunk of their weekly losses, with the Dow Jones increasing by 1.15% to 25,339.9 and S&P 500 up 1.42% to 2,767.1. For the week, the Dow sank 4.2% and the S&P slumped 4.1%. The US Treasury prices finished roughly flat, as the 10-yr UST yield was up a basis point to 3.16%, while the US Dollar Index gained 0.3% to 94.96, thus rebounding from a low for over two weeks, and the November WTI crude oil climbed 0.5% to USD 71.34/bbl. (Source: Mandiri Sekuritas)

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