Bond Market Review (Friday,03/21)
Government Debt Securities (SUN) Prices weakened during Friday’s trading session. Based on data from PHEI, the yield on the 5-year benchmark series (FR0104) rose by 9 basis points (bp) to 6.84%, and the yield on the 10-year benchmark series (FR0103) increased by 8bp to 7.15%. Bloomberg data showed that the 10-year SUN yield curve (GIDN10YR) rose by 7bp to 7.18%.
The outright transaction volume for Government Securities stood at Rp24.5 trillion, higher than the previous trading day’s volume of Rp18.7 trillion. FR0103 and FR0104 were the two most actively traded series in the secondary market, recording transaction volumes of Rp4.7 trillion and Rp4.2 trillion, respectively. Meanwhile, outright transaction volume for corporate bonds reached Rp5.8 trillion.
Rating agency Moody’s completed a periodic review of Indonesia’s sovereign credit rating on March 18, 2025. While no rating action was taken at this stage, the review reaffirmed the key strengths underpinning Indonesia’s Baa2 rating, including resilient economic fundamentals, a prudent policy framework, and a manageable debt profile. At the same time, Moody’s noted ongoing challenges, such as a relatively weak revenue base and uncertainties around tax reform. The stable outlook reflects a balance between potential upside and fiscal or policy-related risks.
The Bank Indonesia (BI) Report on the Performance of the Rupiah Stability Indicator showed a net sell by foreign investors amounting to Rp4.25 trillion based on transaction data for the period of March 17–20. This flow comprised a net purchase of Rp1.20 trillion in the Government Securities (SBN) market, a net sell of Rp4.78 trillion in the equity market, and a net sell of Rp0.67 trillion in the Bank Indonesia Rupiah Securities (SRBI) market. As of the settlement date of March 20, 2025, non-residents had recorded a net sell of Rp28.10 trillion in the stock market year-to-date, alongside a net buy of Rp23.87 trillion in SBN and Rp8.58 trillion in SRBI.
Bloomberg data showed the Rupiah depreciated by 0.1% against the US Dollar, moving from Rp16,485/US$ on Thursday to Rp16,502/US$ on Friday.
Bond Market Preview (Monday,03/24)
As of Friday, global indicators continued to reflect mixed sentiment with a negative bias. The US Treasury (UST) 5-year yield declined by 1bp to 4.00%, while the 10-year UST yield edged up by 1bp to 4.25%. Meanwhile, Indonesia’s 5-year Credit Default Swap (CDS) rose slightly by 1bp to 91bp.
On a week-over-week basis, the 10-year UST yield has declined by 6bp. In contrast, Indonesia’s 5-year CDS increased by 8bp from the previous week, and the Rupiah weakened by 0.93%. Alongside this rise in CDS and weakening of the Rupiah, the 10-year SUN yield curve (GIDN10YR) recorded a weekly increase of 21bp, closing at 7.18%.
Taking into account the market conditions discussed above, we see a likelihood of continued volatility in the prices and yields of Rupiah-denominated Government Securities. For the period of March 24–28, we estimate the 10-year SUN yield will move within the range of 6.97%–7.26%. Based on yield curve valuation, we believe the following bonds will be attractive to investors: FR0090, FR0094, FR0104, FR0096, FR0100, and FR0103.
Kindly find the link to our Fixed Income Daily Market View for March 24, 2025 provided below this message. Thank you and best regards!
