At the conventional bond auction on 26-Aug, the total incoming bids reached Rp126tn, the second highest this year, though below the record Rp162.3tn on 12-Aug and our forecast of Rp162tn (range: Rp157tn 167tn), but still higher than the average incoming bids YTD of Rp87.3tn. Similar to the previous bond auction, the demand was led by the 5-yr FR109, which attracted Rp54tn (42.9% of total bids), followed by the 10-yr FR108 (Rp28tn) and the 15-yr FR106 (Rp16.2tn). As expected, non-competitive bids declined (to Rp49.6tn or 56.3% of total bids vs. Rp16.3tn or 30.2% of total bids prior) as the FR109 is now actively traded in the secondary market, reducing reliance on this channel; note that this might inflate bid sizes, given historically low allocation ratios for non-competitive bids.
Onshore investors remained dominant with Rp100.7tn of bids (vs. Rp128.2tn in the prior auction, YTD avg. of Rp70.6tn), accounting for nearly 80% of the total bids. Offshore demand stood at Rp25.3tn (vs. Rp34.1tn prior, YTD avg. of Rp19.1tn), keeping the foreign share stable at ~20% of the total bids. Meanwhile, the foreign awarded-to-bid ratio improved to 14.4% (vs. 10.2% prior), though still below the YTD average of 33.3%. This often implies potential follow-up buying in the secondary market, thus supporting bond prices.
The government issued Rp30tn, slightly below the previous Rp32tn but above the initial Rp27tn target, signaling ample cash buffers (SAL). The weighted cost of funds declined to 6.24% (vs. 6.35% prior), while the average tenor lengthened slightly to 12.84 years (vs. 12.28 years). Thus, the YTD gross issuance has reached Rp933.5tn, or 68% of our full-year target (based on a -2.78% deficit-to-GDP ratio).
The robust auction demand lifted government bond prices across the curve. According to Bloomberg, the 5-yr FR104 closed at 103.28 (yield: 5.72%, -2.0 bps), the 10-yr FR103 at 103.19 (yield: 6.31%, -0.4 bps), the 15-yr FR106 at 104.17 (yield: 6.68%, -0.8 bps), and the 20-yr FR107 at 103.33 (yield: 6.82%, -0.5 bps). In USD debts, the 5-yr global bond (Mar-2031) was little changed at 87.39 (yield: 4.44%, +0.4 bps), while the 5-yr CDS widened slightly to 67.1 bps (+1.7 bps). In addition, foreign investors recorded a strong net buy, totaling Rp3.05tn, which almost all came from non-benchmark series.
According to IDX s OTC trading report, Indonesian government bond trading activity rebounded strongly on Tuesday (26-Aug), with total volume surging to Rp46.5tn (vs. Rp34.0tn on 25-Aug), supported by strong demand at the government bond auction held the same day. The figure exceeded the prior week s daily average of Rp39.0tn and remained well above both the 2025 year-to-date (YTD) daily average of Rp31.0tn and the 2024 daily average of Rp21.7tn. The 5.6-yr FR0109 series (maturing on 15-Mar-31) led market flows, recording Rp6.2tn in trading volume. Its price advanced to 100.68 (+0.13%), pushing the yield lower to 5.73% (-2.69 bps). This was followed by the 15-yr FR0106 series (maturing on 15-Aug-40), which recorded Rp4.5tn in trading volume. The bond s price inched higher to 104.22 (+0.02%), compressing the yield slightly to 6.67% (-0.18 bps).
On the flow side, based on the latest DMO data (as of 25-Aug), foreign ownership of government bonds was stable at Rp948.2tn (14.85% of outstanding). YTD, BI has been the largest net buyer (+Rp123.3tn), followed by onshore banks (+Rp72.1tn), foreign investors (+Rp71.6tn), insurance and pension funds (+Rp33.6tn), retail (+Rp29.4tn), other investors (+Rp8.5tn), and mutual funds (+Rp6.1tn).
Meanwhile, the JCI fell -0.27% to 7,905.76, despite the turnover surging to Rp45.8tn, which was the highest daily turnover YTD (vs. Rp14.2tn average), with strong foreign inflows of +Rp2.4tn (vs. +Rp0.73tn prior), trimming the YTD net outflows to Rp49.3tn. Regionally, almost all Asian equity markets were also mostly weaker; the Hang Seng Index plunged by -1.18% to 25,524.92 (YTD: +26.56%), while the Nikkei 225 Index dropped by -0.97% to 42,394.40 (YTD: +7.99%). The rupiah also weakened by -0.25% to Rp16,290/USD on Tuesday (YTD: -1.13%).
Domestic Corp Bond Market
On the corporate side, trading activity also strengthened on Tuesday (26-Aug), with total volume rising to Rp3.4tn (vs. Rp2.2tn on 25-Aug). The figure surpassed the prior week s daily average of Rp3.1tn, though it remained below the 2025 YTD average of Rp3.91tn, while staying comfortably above the 2024 daily average of Rp2.05tn.
The PRTL02CCN2 series (maturing on 17-Dec-26), rated AAA(idn), led the segment with Rp800bn in trading volume. The bond s price stood at 100.08, yielding 6.30%. This was followed by the PALM02BCN5 series (maturing on 26-Aug-28), rated idA, which made its secondary market debut with Rp351bn in trading volume. The bond traded at 100.00, yielding 9.00%.
