At the 9-Sep conventional bond auction, the total incoming bids dropped to Rp79.6tn (vs. Rp126tn on 26-Aug and Rp89.7tn YTD average), which was below our forecast of Rp100tn 110tn. Demand was concentrated in the 5-yr FR109 (Rp27.6tn) and 10-yr FR108 (Rp24.5tn), contributing 65% of the total bids. Non-competitive bids also fell sharply, declining to Rp14.4tn (18.1% of the total vs. 31.1% prior).
Offshore demand fell sharply by 63.9% to Rp9.1tn (11.5% of total bids), down from Rp25.3tn (20.1%) in the previous auction. This marked the lowest foreign participation so far this year, well below the YTD average of Rp18.6tn (20.6% of total bids).
The government issued Rp24.5tn, which was also below both the Rp27tn initial target and the prior issuance of Rp30tn, underscoring its ample financing flexibility. This flexibility is supported by the SAL buffer, pre-funding, and front-loading already executed. We estimate the remaining gross issuance need is at only ~Rp36tn per 2-weekly auction, vs. average incoming bids of Rp122tn and realized issuances of ~Rp40tn.
The weighted average cost of funds rose slightly to 6.39% (vs. 6.24% prior), while the average tenor lengthened to 16.2 years (vs. 12.8 years). The year-to-date gross issuance has reached Rp967.9tn, or 70.5% of our full-year target (based on a -2.78% deficit-to-GDP).
In the secondary market, government bond prices fell, pushing yields slightly higher across the curve, while foreign reported a net sell of Rp4.7tn. The 5-yr FR104 closed at 102.86 (5.81%, +9.5 bps), the 10-yr FR103 at 102.44 (6.41%, +4.6 bps), the 15-yr FR106 at 102.83 (6.82%, +9.8 bps), and the 20-yr FR107 at 102.38 (6.90%, +4.5 bps). On USD debts, the 5-yr RoI global bond (Mar-2031) was little changed at 87.68 (4.39%, +0.8 bps), while the 5-yr CDS widened to 72.4 bps (+0.9 bps). Foreign investors booked heavy net selling of -Rp4.66tn, split between benchmark series (-Rp1.25tn) and non-benchmark series (-Rp3.41tn). This marked the second-largest daily foreign outflow this year, after -Rp5.63tn on 29-Aug. The rupiah depreciated by 1.05% to Rp16,475/USD (appreciated by 0.09% MTD, depreciated by 2.32% YTD).
According to IDX s OTC trading report, Indonesian government bond trading activity heightened further on Tuesday (9-Sep), with total volume surging to Rp48.9tn (vs. Rp32.9tn on 8-Sep), driven by the government s bond auction held on the same day. The figure exceeded the prior week s daily average of Rp33.2tn, while also remaining well above both the 2025 year-to-date (YTD) daily average of Rp31.4tn and the 2024 daily average of Rp21.7tn. The 5-yr FR0104 series (maturing on 15-Jul-30) was the most actively traded, recording Rp9.9tn in volume. Its price slipped slightly to 103.00 (-0.39%), lifting the yield higher to 5.78% (+9.34 bps). This was followed by the 10.6-yr FR0108 series (maturing on 15-Apr-36), which booked Rp7.8tn in trading volume. The bond s price edged lower to 100.37 (-0.62%), pushing the yield higher to 6.45% (+8.22 bps).
On the flow side, the DMO data (as of 8-Sep) showed foreign ownership of government bonds declining further to Rp937.5tn (14.6% of outstanding). Year-to-date, Bank Indonesia has been the largest net buyer (+Rp130.3tn), followed by onshore banks (+Rp92.5tn), foreign investors (+Rp60.9tn), insurance and pension funds (+Rp45.2tn), retail (+Rp25.8tn), other investors (+Rp12.5tn), and mutual funds (+Rp9.2tn).
Meanwhile, the JCI fell sharply by -1.78% to 7,628.6, with the turnover surging to Rp24.8tn (vs. Rp14.2tn average). Foreign investors extended heavy outflows to -Rp4.54tn (vs. -Rp526bn prior), pushing the YTD net outflows to -Rp60.2tn. Regionally, Asian equities closed mixed: the Nikkei 225 slipped -0.42% (YTD: +10.5%) and the Shanghai Index fell -0.51% (YTD: +11.9%) due to profit-taking after recent gains.
Domestic Corp Bond Market
On the corporate side, trading activity also picked up on Tuesday (9-Sep), with total volume rising to Rp3.0tn (vs. Rp2.0tn on 8-Sep). Despite the increase, the figure remained below both the prior week s daily average of Rp4.4tn and the 2025 YTD average of Rp3.92tn, though it surpassed the 2024 daily average of Rp2.05tn.
The BBKP02ACN2 series (maturing on 9-Sep-26), rated AAA(idn), emerged as the most actively traded corporate bond with Rp537bn in volume. Its price inched up to 100.00 (+0.08%), bringing the yield lower to 6.45% (-7.47 bps). This was followed by the SMMA02DCN2 series (maturing on 26-Aug-27), rated irAA, which posted Rp254bn in trading volume. Its price advanced to 106.16 (+0.24%), compressing the yield to 6.39% (-15.29 bps).
