Rupiah-denominated assets closed weaker on the final trading day of May. The JCI slipped by 0.05% to 6,127, bringing the month-to-date and year-to-date performance to -11.9% and -29.1%, respectively. Market sentiment remained cautious amid renewed geopolitical concerns after reports of US strikes on Iranian vessels in the Strait of Hormuz, which reignited risk premia and encouraged a shift toward defensive assets. Foreign investors recorded net equity outflows of Rp8.5tn, bringing cumulative outflows to Rp4.1tn MTD and Rp54.0tn YTD. Trading activity remained elevated, with turnover reaching Rp50.1tn, bringing the average daily trading value in 2026 to Rp24.1tn. Meanwhile, regional equity markets were mixed. Japan’s Nikkei outperformed, rising by 2.5%, while China’s Shanghai Composite declined by 0.7%.
The government bond market also lowered slightly despite continued foreign inflows. The 5-yr FR109 yield rose to 6.72% (+3.3 bps), the 10-yr FR108 to 6.70% (+1.6 bps), the 15-yr FR106 to 6.84% (-0.2 bps), and the 20-yr FR107 to 6.86% (+1.9 bps). Yield movements reflected persistent rupiah weakness, which continued to limit the scope for a stronger bond rally despite estimated foreign inflows of around Rp2.9tn. Meanwhile, external risk indicators improved modestly, with Indonesia’s 5-yr USD sovereign yield declining by 2.4 bps to 4.79% and the 5-yr CDS narrowing by 0.8 bps to 89.6 bps. The rupiah depreciated further by 0.48% to Rp17,874/USD, bringing the cumulative depreciation to 3.0% MTD and 7.1% YTD.
According to IDX s OTC trading report, Indonesian government bond trading activity moderated on Friday (29-May), with total volume declining to Rp37.4tn (vs. Rp51.8tn on 26-May). Turnover came in above the prior week s daily average of Rp26.8tn, the 2026 YTD average of Rp 31.9tn, and the 2025 daily average of Rp32.0tn. The 10-yr FR0108 benchmark series (maturing on 15-Apr-36) led market activity, recording Rp6.3tn in trading volume. Its price declined to 98.92 (-3.12%), while the yield rose to 6.65% (+43.86 bps). This was followed the 5-yr FR0109 benchmark series (maturing on 15-Mar-31), recording Rp5.9tn in trading volume. Its price declined to 96.60 (-0.18%), while the yield rose to 6.71% (+4.58 bps). Close behind was the 9.1-yr FR0103 series (maturing on 15-Jul-35), with a total volume of Rp2.9tn. Its price slipped to 99.60 (-0.08%), while the yield rose to 6.81% (+1.20 bps).
From a positioning perspective, the government bond market continued to be supported primarily by domestic investors. As of 26-May, foreign ownership stood at Rp864.4tn, equivalent to just 12.6% of outstanding government bonds. On a year-to-date basis, domestic institutions have been the main buyers, led by insurance and pension funds (+Rp99.4tn), Bank Indonesia (+Rp78.9tn), other domestic investors (+Rp63.9tn), banks (+Rp22.5tn), retail investors (+Rp15.4tn), and mutual funds (+Rp13.0tn). In contrast, foreign investors remained net sellers with cumulative outflows of Rp14.3tn YTD.
In the SRBI auction on 29-May, incoming bids moderated to Rp43.1tn from Rp58.4tn in the previous auction, suggesting demand has remained healthy but less aggressive than immediately after Bank Indonesia’s recent policy tightening. Nevertheless, Bank Indonesia awarded Rp40tn, significantly above both the Rp20tn initial target and the Rp18tn awarded previously. Weighted average SRBI rates continued to move higher, rising by up to 19 bps from the previous auction and by approximately 49 bps cumulatively since BI raised the policy rate by 50 bps earlier this month. The awarded rates reached 6.72% for the 6-mo tenor, 6.76% for the 9-mo tenor, and 6.92% for the 12-mo tenor, reinforcing BI’s commitment to maintaining attractive rupiah yields and supporting FX stability.
The government will conduct its latest sukuk auction today, targeting Rp12tn of issuance, unchanged from the previous sukuk auction. The securities on offer include SPNS tenors of 1-month, 6-month, and 9-month, as well as PBS030 (2.1-year), PBS040 (4.5-year), PBS034 (13-year), PBS005 (16.9-year), and PBS038 (23.5-year). We expect auction demand to rebound from the previous sukuk auction, supported by ample liquidity, reinvestment flows, and improved investor sentiment following the stronger conventional bond auction. We forecast incoming bids of around Rp20tn, with a projected range of Rp15 25tn.
Over the week, average daily government bond trading strengthened to Rp36.9tn (vs. Rp26.8tn in the prior week). The 5-yr FR0109 benchmark series remained the most actively traded, with its total weekly trading volume rising to Rp22.4tn (vs. Rp20.9tn previously).
Domestic Corp Bond Market
On the corporate side, trading activity moderated on Friday (29-May), with total volume declining to Rp10.5tn (vs. Rp12.2tn on 26-May). Turnover came in above the prior week s daily average of Rp9.2tn, the 2026 YTD average of Rp7.6tn, and the 2025 daily average of Rp4.0tn.
The SMSMII03ACN2 series (maturing on 7-Dec-26), rated idAAA(sy), was the most actively traded with a total volume of Rp477bn. Its price increased to 99.42 (+0.94%), while the yield declined to 6.14% (-179.64 bps). This was followed by the SKSMFP02CN1 series (maturing on 18-Jul-26), rated idAAA(sy) with a volume of Rp425bn. Its price increased to 99.22 (+0.01%), while the yield inched up to 11.99% (+25.43 bps). Close behind was the LTLS04CN1 series (maturing on 4-Jul-27), rated idA with a volume of Rp350bn. Its price declined to 98.49 (-0.02%), while the yield increased to 10.22% (+3.02 bps).
Over the week, average daily corporate bond trading volume increased to Rp10.6tn (vs. Rp9.2tn in the prior week). The BUMI01BCN5 series (maturing on 26-May-29), rated idA+, emerged as the most actively traded corporate bond, recording total weekly trading volume of Rp971bn.
Pefindo has assigned idA- rating with stable outlook to PT Dahana. According to Pefindo, the rating reflects Dahana s strong market position, integrated business operations, and strong financial profile. Meanwhile, the rating is constrained by its exposure to expansion risk and exposure to the volatility of commodity prices.
Pefindo has assigned idAA+ financial strength rating with stable outlook to PT Asuransi Umum BCA (BCA Finance). According to Pefindo, the rating reflects very strong likelihood of support from PT Bank Central Asia Tbk (BCA or the Parent, rated idAAA/stable), very strong capitalization, and strong liquidity. Meanwhile, the rating is constrained by intense competition in the general insurance industry.
Fitch affirmed PT Pertamina s Long-Term IDR at BBB with a Negative Outlook, reflecting its equalisation with Indonesia s sovereign rating. The company s Standalone Credit Profile (SCP) was upgraded to bbb from bbb- , supported by improved compensation payment mechanisms and a strong financial profile. Pertamina continues to benefit from very strong government support, given its critical role in Indonesia s energy security and fuel distribution. Fitch expects leverage to remain manageable despite higher capex, rising dividend payments, and increased investment in upstream oil and gas development. Liquidity remains strong, with cash of around USD15bn at end-2025, well above near-term debt maturities. The main rating risk remains a downgrade of Indonesia s sovereign rating, while the Outlook could be revised to Stable if the sovereign Outlook is upgraded to Stable.
