Bond Market Review (Friday,03/07)
Government Debt Securities (SUN) prices showed limited movement during last week’s final trading session. According to data from PHEI, the 5-year SUN benchmark (FR0104) yield remained unchanged at 6.65%, while the yield on the 10-year SUN benchmark (FR0103) also stayed at 6.86%. Bloomberg data showed that the 10-year SUN yield curve (GIDN10YR) remained at 6.87%.
The outright trading volume of Government Securities (SBN) was recorded at Rp22.9 trillion on Friday, higher than the previous day’s volume of Rp21.4 trillion. FR0103 and PBS003 were the two most actively traded series in the secondary market, with transaction volumes of Rp3.6 trillion and Rp2.8 trillion, respectively. Meanwhile, the outright trading volume of corporate bonds was recorded at Rp1.8 trillion.
The Bank Indonesia (BI) Report on the Performance of the Rupiah Stability Indicator showed a net purchase by foreign investors amounting to Rp8.99 trillion based on transaction data for the period of March 3-6. This flow consisted of a net purchase of Rp9.53 trillion in the SBN market, a net purchase of Rp0.34 trillion in the stock market, and a net sell of Rp0.88 trillion in the Bank Indonesia Rupiah Securities (SRBI) market. As of March 6, 2025, settlement data indicated that for the year 2025, non-residents recorded a net sell of Rp20.12 trillion in the stock market, a net purchase of Rp19.01 trillion in the SBN market, and a net purchase of Rp6.11 trillion in SRBI.
Bloomberg data showed that the Rupiah appreciated by 0.28% against the US Dollar, moving from Rp16,340/US$ on Thursday to Rp16,295/US$ on Friday.
Bond Market Preview (Monday,03/10)
As of Friday, global indicators pointed to a slightly negative sentiment, as reflected in the increase in US Treasury (UST) yields. The 5-year UST yield curve rose by 3 basis points (bp) to 4.09%, while the 10-year UST yield curve increased by 3 bp to 4.32%. On the other hand, Indonesia’s 5-year Credit Default Swap (CDS) remained at 77 bp.
On a week-over-week basis, the 10-year UST yield curve increased by 8 bps, while the Rupiah strengthened by 1.81% against the US Dollar and Indonesia’s 5-year CDS declined by 2 bps, signaling improved demand for domestic assets and a slight reduction in perceived sovereign risk. In line with these indicators, the 10-year SUN yield curve (GIDN10YR) declined by 4 bps to 6.87%, suggesting that the combined effect of Rupiah appreciation and easing credit risk helped counteract external pressure from rising UST yields.
Considering the market conditions discussed above, we see the potential for increased demand for Rupiah-denominated SBN instruments. For the period of March 10-14, we estimate the 10-year SUN yield will move within the range of 6.71%- 6.99%. Based on yield curve valuation, we expect the following bonds to be attractive to investors: FR0090, FR0094, FR0052, FR0087, and FR0075.
