Today’s highlights:
South Korea expanded onshore won trading to 24 hours starting July 2, eliminating the overnight NDF hedging gap for foreign investors as part of broader capital market reforms to support its MSCI developed-market upgrade bid — though authorities acknowledged near-term FX volatility risks with the won already weakened to ~KRW1,540/USD despite strong macro fundamentals. Separately, President Prabowo will host Singapore PM Lawrence Wong for the annual Indonesia-Singapore Leaders’ Retreat, the second summit between the two leaders, covering bilateral cooperation progress and regional developments with Singapore’s senior cabinet in attendance.
From the bond market, FR 56, 37, 90, and 59 are currently the cheapest based on our yield curve model. Last national business day, the dollar index was closed at 100.86 (+0.0%). Rupiah was appreciated by 0.2% at USDIDR at 17,963. The 10yr UST yield increased by +0.0bps to 4.48% and 10yr INDOGBR decreased by -2.3bps to 7.14% – the spread between the two was at 266bps.
Economy: South Korea launched 24hr won trading to improve market accessibility despite FX volatility concerns
South Korea expanded onshore won trading to 24hr from 2 Jul’26 as part of broader capital market reforms aimed at meeting developed-market standards and supporting its bid for an MSCI upgrade. The reform eliminated the overnight trading gap that previously forced foreign investors to hedge through offshore non-deliverable forwards (NDFs), while authorities also introduced hourly benchmark pricing, eased foreign-investor reporting requirements, and planned to allow offshore spot won trading from 2027. Officials acknowledged that greater market openness could initially increase FX volatility, particularly as the won had weakened to ~KRW1,540/USD despite strong exports, a sizeable current-account surplus, and robust equity market performance. Policymakers nevertheless argued that deeper market accessibility and improved liquidity would enhance the long-term attractiveness of Korean financial assets. Source: Bloomberg
Economy: Indonesia and Singapore would hold annual Leaders’ Retreat to deepen bilateral cooperation
President Prabowo Subianto would host Singapore Prime Minister Lawrence Wong for the annual Indonesia-Singapore Leaders’ Retreat, marking the second summit between the two leaders. The meeting would reaffirm both countries’ commitment to strengthening bilateral relations and expanding cooperation in areas of mutual interest. The leaders were also expected to review the progress of bilateral initiatives agreed upon during the previous Leaders’ Retreat in Singapore in Jun. 2025 and exchange views on regional and global developments. Wong would be accompanied by senior cabinet members, including Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong, Foreign Minister Vivian Balakrishnan, Defence Minister Chan Chun Sing, Minister for Social and Family Development Masagos Zulkifli, and Manpower Minister Tan See Leng, underscoring the broad scope of the bilateral engagement. Source: Kontan
Fixed Income: PLN’s upcoming bond and sukuk maturity totaling IDR683.3bn to be repaid using internal funds
PT Perusahaan Listrik Negara (Persero) (PLN) announced two debt instruments maturing on 1 Aug’26: Shelf Registered Bond III Phase IV Year 2019 Serie B (rated idAAA) amounting to IDR315.3bn, and Shelf Registered Sukuk Ijarah III Phase IV Year 2019 Serie B (rated idAAA/sy) amounting to IDR368bn. The Company plans to repay both instruments using internal funds, supported by cash and cash equivalents of approximately IDR42.2tn as of end-Dec’25. Source: Pefindo
Fixed Income: Pefindo affirmed BPUI’s idAAA rating amid SOE insurance streamlining process and PSAK 117 transition
Pefindo reaffirmed its idAAA general obligation rating with stable outlook on PT Bahana Pembinaan Usaha Indonesia (Persero) (BPUI) and its outstanding MTN I/2022, valid through 1 Jul’27. The rating is mainly driven by the very strong likelihood of support from the Indonesian government, complemented by BPUI’s very strong business profiles of its major subsidiaries, very strong capitalization and reserves, and strong liquidity and financial flexibility, while modest operating performance remained the primary constraint. Pefindo noted its ongoing monitoring of the SOE insurance streamlining process, which is not expected to negatively impact BPUI as the initiative is primarily aimed at enhancing operational efficiency and broadening business scope rather than reducing operational scale. Pefindo also noted the ongoing PSAK 117 transition and will partially maintain PSAK 104 in its financial highlight displays to ensure consistency across rating periods. BPUI is Indonesia’s state-owned insurance holding company fully owned by the Government, with insurance holding members including PT Asuransi Kredit Indonesia, PT Jaminan Kredit Indonesia, PT Jasa Raharja, PT Asuransi Jasa Indonesia, and PT Asuransi Jiwa IFG. Source: Pefindo
Fixed Income: Pefindo assigned idA rating to Bank Bengkulu amid concentrated funding sources and moderate profitability
Pefindo assigned its idA general obligation rating with stable outlook to PT Bank Pembangunan Daerah Bengkulu (Bank Bengkulu), valid through 1 Jun’27. The rating was anchored by Bank Bengkulu’s captive market in Bengkulu province, very strong capitalization, and very strong asset quality profile, while concentrated funding sources and moderate profitability indicators remained the primary constraints. An upgrade could materialize if Bank Bengkulu significantly strengthens its market position and diversifies its funding structure while maintaining financial performance on a sustained basis, while a downgrade could be triggered by significant deterioration in profitability and asset quality. Bank Bengkulu is a regional development bank established in 1969 operating through one head office, 11 branch offices, and 56 sub-branch offices, with the Provincial Government of Bengkulu (35.7%) and City and Regency Municipal Governments in Bengkulu (45.6%) as its major shareholders as of 1Q26. Source: Pefindo
Fixed Income: Pefindo assigned idAA to Adaro Indonesia’s proposed Bond I Year 2026 of IDR2tn while affirming existing idAA rating
Pefindo assigned idAA to PT Adaro Indonesia (AI)’s proposed Bond I Year 2026 of IDR2tn for working capital purposes, while affirming its idAA general obligation rating with stable outlook, valid through 1 Apr’27. The rating was anchored by AI’s very strong competitive position as one of Indonesia’s largest thermal coal producers, very strong operating management, robust cash flow generation, strong liquidity, and conservative capital structure, while concentrated business profile in thermal coal heightening energy transition risks and exposure to commodity price volatility remained the primary constraints. A downgrade could be triggered by sustained weakening in revenue or EBITDA, or material increase in financial leverage weakening debt repayment capacity. AI is a thermal coal mining company with annual production of ~50mn tons operating the Tutupan and Wara mines in Tanjung, South Kalimantan, 88.5% effectively owned by PT Adaro Andalan Indonesia Tbk (AADI) as of 31 Dec’25. Source: Pefindo
Fixed Income: Pefindo assigned idA- to BWPT’s proposed SR Bond II of IDR1tn and SR Sukuk Mudharabah II of IDR1.5tn while affirming existing ratings
Pefindo assigned idA- to PT Eagle High Plantations Tbk (BWPT)’s proposed Shelf Registered Bond II Year 2026 of maximum IDR1tn and idA-/sy to its proposed Shelf Registered Sukuk Mudharabah II Year 2026 of maximum IDR1.5tn for working capital and debt refinancing, while affirming its idA- general obligation rating and existing bond ratings with stable outlook, valid through 1 Mar’27. The rating was anchored by BWPT’s strong operating management, stable demand for palm oil, and relatively strong financial profile, while relatively moderate plantation profile and exposure to commodity price dynamics and weather variability remained the primary constraints. A downgrade could be triggered by revenue or EBITDA falling significantly short of projections or higher-than-projected debt without compensating business improvement. BWPT is a palm oil plantation company with 87,022 hectares of total plantation area and 7 CPO mills across Kalimantan, Sumatra, and Papua, with PT Rajawali Capital International (37.7%) and FIC Properties Sdn Bhd (37.0%) as its major shareholders as of 31 Dec’25. Source: Pefindo
