Daily Commentary (2-Nov): Strong Gain on Rupiah Asset Class

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All rupiah asset classes gained on Friday as rising global risk on sentiment continued. All the benchmark bond series were up, sending bond yields to continue going lower. The 5yr FR63 was traded at 90.7 (+0.4%), yielding 8.11% (-11.3 bps); the 10yr FR64 at 85.9 (+1.1%), yielding 8.29% (-15.5 bps); the 15yr FR65 at 83.7 (+0.9%), yielding 8.61% (-10.2 bps); and the 20yr FR75 at 87.5 (+0.4%), yielding 8.86% (-4.6 bps).

According to PLTE data, foreign has kept posting net buy of Rp3n on Friday, – mostly coming from non-benchmark series (+Rp2.4tn). Meanwhile, foreign ownership in government bond based on settlement date as of 2-Nov (reflecting trading on 31-Oct) was at Rp865tn (inflow of Rp0.7tn mtd or +Rp28.8tn ytd) or 37% of total outstanding.

JCI was also up 1.2% to 5,906.3 (+1.3% mtd or -7.1% ytd) with foreign investors posting net inflow of Rp1.1tn (inflow of Rp2.3tn mtd but still outflow of Rp52.2tn ytd). Rupiah also appreciated by 1.1% to IDR 14,955/USD (appreciated 1.6% mtd or depreciated 10.2% ytd).

Over the week, JCI rose 2.1% to 5,906.3, the 10yr Government bond yield fell 34.7 bps to 8.29%, rupiah appreciated 1.7% to 14, and foreign investors in the stock and bond market posted net buys of Rp4.6tn and Rp9tn, respectively.

On the global market, October US jobs gained 250k, unemployment rate held steady at 3.7%, while average hourly earnings rose 3.1%yoy (still in line with expectations). US stock market fell, US Treasury yield increased, and DXY Index rebounded. Dow Jones decreased 1.21% to 25,270.8 and S&P 500 fell 0.63% to 2,723.1. The US Treasury prices also posted lower, pushing the 10-year yield up 8bps to 3.21%. DXY index rebounded 0.3% to 96.5. (Source: Mandiri Sekuritas)

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