Bond Yields Continued Going Higher, but Foreign Kept Net Buying

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Daily Commentary (15-Oct): INDOGB benchmark series’ prices continued falling, sending bond yields higher on Monday. The 5yr FR63 was trading at 89.3 (-0.2%), yielding 8.48% (+6 bps); the 10yr FR64 at 82.8 (-0.7%), yielding 8.91% (+10.3 bps); the 15yr FR65 at 81 (-0.9%), yielding 8.99% (+10.8 bps); and the 20yr FR75 at 84.8 (-0.7%), yielding 9.18% (+7.7 bps).

Based on PLTE data, trading volume in the secondary market was reported at Rp18.8tn with foreign surprisingly still net buying by Rp603bn. But specific for benchmark series, foreign reported net sell slightly by Rp194bn. Foreign ownership in government bonds based on settlement date as of 12-Oct was at Rp850.5tn (outflow of Rp0.4tn mtd and inflow of Rp14.3tn ytd) or 37% of total outstanding.

JCI also fell 0.5% to 5,727.3 (-4.2% mtd or -9.9% ytd) with foreign investors posting net inflow of Rp340bn (still outflow of Rp6.2tn mtd or outflow of Rp57.4tn ytd). Rupiah also depreciated 0.10% to Rp15,220/USD (depreciated 2.13% mtd or 12.2% ytd) on Friday.

September trade data released reported surplus of USD 0.23bn (vs. USD -0.5bn cons. est.). Exports rose 1.7% to USD 14.83bn, far below expectation of a 7.58% rise. Meanwhile, imports increased faster at 14.18% to USD 14.60bn, also far below forecast of a 24.76% gain.

On the global, US stocks also lowered, adding to last week’s losses over worries about higher borrowing costs and their potential effects on the global economy; Dow Jones index fell 0.35%, while S&P index fell 0.59% on Monday. Dollar Index also fell by 0.2% to 94.73, nearing a two-week low. The 10yr US Treasury bond yields fell slightly to 3.15%. (Source: Mandiri Sekuritas)

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