Indonesian rupiah assets started March on a weaker footing amid heightened geopolitical tensions in the Middle East. The JCI fell sharply by -2.65% to 8,016.83, widening YTD losses to -7.29%, with the daily turnover moderating to Rp29.8tn (vs. YTD average of Rp30.5tn). Foreign investors recorded net outflows of -Rp631bn, reversing last week s cumulative inflows and bringing the YTD equity outflows to -Rp9.5tn. Regionally, Asian equities also closed in negative territory, reflecting rising risk aversion. The Nikkei index recorded -1.28%, while the Hang Seng index recorded -1.58%.
In the bond market, INDOGB yields moved higher across most tenors, particularly at the front and belly of the curve, while the long-end remained relatively resilient. The 5-yr FR109 rose to 5.83% (+7 bps), the 10-yr FR108 climbed to 6.45% (+3 bps), and the 15-yr FR106 increased to 6.60% (+2 bps), while the 20-yr FR107 eased slightly to 6.62%. Foreign investors continued to trim exposure, posting net outflows of -Rp1.55tn, bringing YTD net sell to -Rp3.3tn. Meanwhile, offshore indicators softened, with the 5-yr USD sovereign yield rising to 4.36% (+4.8 bps) and the 5-yr CDS widening to 86 bps (+2.83 bps). The rupiah depreciated by 0.37% to Rp16,854/USD, in line with a firmer DXY at 98.5 (+0.9%).
Trading activity eased further, with the total OTC bond trading volume dropping to Rp23tn (vs. Rp32.8tn previously; Rp36.8tn avg daily turnover in the last week, or YTD average: Rp32.9tn). The 10-yr FR0108 benchmark series led market activity, recording Rp2.6tn in trading volume. This was followed by the 4.5-yr FR0082 series (maturing on 15-Sep-30), which recorded Rp2.1tn in trading volume. Its price declined to 104.65 (-0.39%), while the yield edged up to 5.83% (+11.44 bps). Close behind, the 19.5-yr FR0107 series (maturing on 15-Aug-45), which recorded Rp2.1tn in trading volume.
As of 27-Feb, foreign ownership in SBNs stood at Rp875.4tn (12.97% of total outstanding). Domestic investors remain the primary buyers year-to-date, led by onshore banks (+Rp45.9tn), other investors (+Rp42.4tn), insurance & pension funds (+Rp41tn), Bank Indonesia (+Rp21.4tn), mutual funds (+Rp20.6tn), and retail investors (+Rp9.9tn). Meanwhile, foreign investors have remained net sellers at -Rp3.3tn YTD.
Overall, while Indonesia s bond and currency markets have demonstrated relative resilience in the initial phase of the conflict, sustained oil price shocks remain the key macro risk to monitor. We identify critical risk thresholds at a Brent price of USD 92.4/bbl or a rupiah depreciation toward Rp17,100/USD levels we estimate as the breakeven points based on the average entry yield and exchange rate of foreign inflows into the bond market. A sustained move beyond these thresholds could alter foreign positioning dynamics and intensify pressure on the local-currency bond market.
On the macro front, February s manufacturing PMI strengthened to 53.8 (vs. 52.6), signaling ongoing expansion. Headline CPI accelerated to 4.76% YoY (vs. 3.55% prior), exceeding consensus, largely due to base effects from last year s electricity tariff discounts. Core inflation also edged up to 2.63% YoY, suggesting still-contained underlying pressures. Meanwhile, January s trade surplus narrowed sharply to USD 954mn (vs. USD 2.51bn prior), marking the smallest surplus since Apr-2025, as imports surged by 18.2% YoY, while exports grew modestly at 3.4% YoY.
Looking ahead, the government will conduct the final conventional bond auction for 1Q26 on 3-Mar, targeting Rp33tn (maximum: Rp49.5tn), offering three SPN tenors and six fixed-rate SUN reopenings (FR109, FR108, FR106, FR107, FR102, and FR105). Based on our incoming bids model, we estimate demand in the range of Rp46tn 56tn, potentially softer than in the previous auction. Escalating geopolitical risks may continue to dampen foreign participation, keeping the market reliant on domestic institutional demand in the near term.
Domestic Corp Bond Market
On the corporate side, trading activity moderated on Monday (2-Mar), with total volume falling to Rp7.3tn (vs. Rp10.2tn on 27-Feb). Turnover came in below the prior week s daily average of Rp10.2tn but remained above the 2026 YTD average of Rp 5.2tn.
The SMINKP04BCN1 series (maturing on 4-Oct-29), rated idA+(sy), was the most actively traded with a total volume Rp404bn. Its price declined to 108.85 (-2.05%), while the rose to 7.89% (+67.98 bps). This was followed by the PPGD06ACN4 series (maturing on 23-Nov-26), rated idAAA with a volume of Rp404bn. Its price rose to 100.52 (+0.02%), while the fell to 4.52% (-4.16 bps). Close behind was the SIPTRO01DCN1 series (maturing on 13-Dec-31), rated idA+(sy), which recorded Rp268bn in trading volume. Its price declined to 104.47 (-0.71%), while the increased to 8.51% (+15.72 bps).
Pefindo has affirmed idA rating with stable outlook to PT Wahana Inti Selaras (WISL) and WISL s outstanding bonds. According to Pefindo, the rating reflects WISL s favorable brand portfolio and market position, well-diversified business, as well as extensive outlet network. Meanwhile, these strengths are offset by WISL s moderate capital structure as well as exposure to commodity price volatility and regulatory changes.
Fitch Ratings has affirmed the ratings of 12 APAC consumer companies following the update to its Corporate Rating Criteria and Sector Navigators Addendum to the Corporate Rating Criteria on 9 January 2026, with Outlooks are unaffected by the criteria changes. For Indofood CBP, Fitch s Corporate Rating Tool (CRT) assessment results in a Standalone Credit Profile (SCP) of bbb- , reflecting a business and financial profile assessment comprising management (bbb, lower), sector characteristics (bbb, moderate), market and competitive positioning (bbb-, moderate), diversification and asset quality (bb+, higher), operational characteristics (bbb, moderate), profitability (a, moderate), financial structure (a, lower), and financial flexibility (bbb, moderate). The quantitative financial assessment applies a 20% weighting to 2024 actual results and 40% each to the 2025 and 2026 forecasts. Governance, assessed as good , and the operating environment, assessed at bbb- , result in no rating adjustments. The IDR is derived using an equalised approach under Fitch s Parent and Subsidiary Linkage Rating Criteria.
