Expected Not to Weak, Bonds Tested for Resilience

By : Wiyanto Dan Aldo Bella Putra | Thursday, July 05 2018 - 15:30 IWST

Obligasi Negara Ritel (ORI) (Foto Ist)
Obligasi Negara Ritel (ORI) (Foto Ist)

INDUSTRY.co.id - Jakarta - It is expected that domestic sentiment can be better to support further increase, especially in Rupiah which is expected to be re-appreciated.

Capital Market Analysts, Reza Priyambada, said it remains cautious and alert if there are still any sentiments that could make the bond market rate weaken again.

"The movement of the domestic bond market that only rose slightly is expected to survive in line with the start of the increase in the rupiah currency, although it must be tested again its resilience," he said in Jakarta on Thursday (5/7/2018).

Still fluctuating the rupiah makes market participants more cautious in conducting transactions and tends to wait and see_ in addressing existing sentiments. Although the movement of US bond yields before the national holiday of Independence tends to fall but, not much impact on the movement of domestic bonds. Movements in domestic bond yields still tend to rise although not too large. As for the movement of each tenor is for short tenor (1-4 years) the yield is an average increase of 10.58 bps; medium tenor (5-7 years) down 6.10 bps; and length (8-30 years) rose by 0.73 bps.

The market rate of bonds tends to move up in line with the start of buying action. At FR0063 which has a maturity time of ± 5 years with a price of 92.06% has a yield of 7.61% or down 0.09 bps from the previous at 91.73% price has a yield of 7.69%. For FR0075, which has a maturity of ± 20 years with a price of 93.99% has a yield of 8.11% or down 0.04 bps from the previous day at the price of 93.62% has a yield of 8.15%.

On Wednesday (4/7), the average Government bond price as reflected in the INDOBeX Government Clean Price rose 0.37 bps to 109.45 from the previous level of 109.05. Meanwhile, the average price of corporate bonds reflected in the INDOBEX Corporate Clean Price fell 0.07 bps at 104.95 from the previous level of 105.02. Meanwhile, the yield on SUN 10Yr was at 7.73% from 7.84% and US Govn't bond of 10Yr at 2.85% from 2.82% so that spread in the range of 488 , 1 bps lower than the previous 502 bps.

While at the rate of corporate bond yields, the movement tends to be varied. In corporate bonds with AAA rating where yields for tenor 9-10 move up around 9.90% -9.91%. On the AA rating with tenor of 9-10 years in the range of 10.35% -10.40%. On the A rating with a tenor of 9-10 years in the range 11.35% -11.55%, and on the BBB rating in the range of 14.00% -14.05%.

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