Today’s highlights:
US and Korea were expected to sign deals over quantum and AI, as both countries aimed to maintain competitive edge with China. From domestic, MoF Purbaya pledged to minimized burden sharing scheme with BI, as the policy would blur the lines between fiscal and monetary authorities. On Red-White Village Cooperatives (KDMP), Danantara would provide IDR210tn in credit plafond for the cooperatives. On budget financing, yesterday saw the issuance of IDR10tn in govt. sukuk (prev: IDR10tn), and gross issuance now reached ~77.43% of target.
From the bond market, FR 84, 86, 37, and 56 are currently the cheapest based on our yield curve model. Last national business day, the dollar index was closed at 98.67 (0.1%). Rupiah was appreciated by 0.1% at USDIDR at 16,608. The 10yr UST yield decreased by 0.4bps at 3.98% and 10yr INDOGBR was up by +0.1bps at 6.00% – the spread between the two was at 202bps.
Economy: US and S. Korea would sign deal to boost cooperation in quantum and AI
With the aim of maintaining competitive edge in tech supremacy against China in Artificial Intelligence, quantum computing and 6G, President Donald Trump was aiming to sign a deal to strengthen export controls for AI and reducing regulatory burdens for tech companies to bolster further cooperation with South Korea. The deal aimed to improve bio-tech and pharmaceutical supply chains, promote partnerships and protect technology advances within the realm of quantum computing, AI and 6G telecom technology. Source: Bloomberg
Economy: Indonesia’s Minister of Finance committed to stop ‘Burden Sharing’ scheme with BI
Purbaya Yudhi Sadewa, Indonesia’s Minister of Finance re-stated his intentions to minimize the use of the burden sharing scheme between the Indonesian Government and Central Bank like the one used during Covid-19. The minister says that such scheme should be only used during emergencies and should not be the norm in managing fiscal and monetary policy. Purbaya believes that enacting the burden sharing scheme can blur the lines between fiscal and monetary policy which should otherwise operate independently, the minister further emphasized that the continued implementation of burden sharing schemes with the central bank would inevitably pose serious risks towards the credibility of fiscal policy as the central bank would be able to ‘monetize fiscal policy’ which is not allowed. Source: Kontan
Economy: Indonesia’s Danantara would provide IDR210tn for KDMP
Farida Farichah, Deputy Minister of Cooperatives confirmed that Danantara agreed to provide a credit ceiling of IDR210tn for the development of Red-White Village Cooperatives. The funds itself would be channeled through State-owned Banks (Himbara) with IDR198tn funding split equally among Indonesia’s three biggest state-owned banks (BNI, BRI and Bank Mandiri), and the remaining funds would be placed at BSI. Source: Kontan
Economy: Indonesia’s govt. issued IDR10.00tn of govt. sukuk (prev: IDR10.00tn)
The details as follows: PBS040 with an avg. yield of 5.39903% (size: IDR3.40tn), PBSG002 with an avg. yield of 5.90919% (size: IDR2.00tn), PBS034 with an avg. yield of 6.29517% (size: IDR1.80tn), PBS038 with an avg. yield of 6.61027% (size: IDR1.20tn), SPNS13072026 with an avg. yield of 4.60000% (size: IDR1.00tn), and SPNS08122025 with an avg. yield of 4.60000% (size: IDR0.60tn). Meanwhile, demand for govt. sukuk decreased to IDR51.43tn (prev: IDR59.21tn). Most of the demand went to PBS038 and PBS034 amounting IDR22.35tn or ~43.46% of total incoming bids. In detail, this was followed by bids on PBS040, SPNS13072026, PBS038, PBS030, SPNS06042026, and SPNS08122025. The overall-bid-to-cover ratio was booked lower as well at 5.14x (prev: 5.92x). Post this issuance, we estimate the gross issuance this year has reached ~77.43%. Source: DJPPR, Trimegah Research
