Total incoming bids in the final 1Q26 sukuk auction softened further to Rp31tn (vs. Rp35.6tn on 24-Feb; YTD average: Rp40.9tn), broadly in line with our forecast range of Rp26tn 31tn. Demand was concentrated in the 23.8-yr PBS038, which attracted Rp9.3tn of bids, followed by the 9-mo SPNS with Rp8.2tn. Notably, demand for short-tenor SPNS increased, accounting for 37.4% of total bids (vs. 26.1% previously).
Despite the softer demand, the government issued Rp15tn, above the Rp11tn target but below the Rp20tn issued in the previous auction. SPNS issuance rose to Rp10.6tn, accounting for 70.7% of total issuance. The weighted average cost of funds remained stable at 5.51%, while the average tenor shortened to 4.9 years (vs. 7.9 years previously). We suspect Bank Indonesia s participation remained significant in SPNS, similar to the previous auction, where BI absorbed a large portion of short-tenor issuance.
Bond and sukuk auction issuance in 1Q26 has reached Rp257.1tn, exceeding the 1Q indicative auction target of Rp222tn. The stronger front-loaded issuance in 1Q may allow the government to moderate auction supply in 2Q26, helping reduce near-term supply risks and maintain yield stability amid ongoing global market volatility. Based on our estimates, the implied 2Q auction target could decline slightly to around Rp282tn (vs. Rp297tn under the baseline pace). Year-to-date, the total SBN issuance has reached Rp451.3tn, equivalent to 28.8% of the FY2026 financing target.
In the secondary market, INDOGBs rallied following the auction, with yields declining across most tenors. The 5-yr FR109 yield fell to 6.06% (-2.9 bps), the 10-yr FR108 declined to 6.69% (-3.9 bps), and the 20-yr FR107 eased to 6.80% (-1 bps), while the 15-yr FR106 edged up slightly to 6.85% (+0.3 bps). Offshore indicators also improved, with the 5-yr USD sovereign yield easing to 4.52% (-1.8 bps) and the 5-yr CDS narrowing to 88.14 (-3.63 bps). However, foreign investors continued to reduce exposure, posting net outflows of Rp2.15tn. Meanwhile, the rupiah strengthened by 0.51% to Rp16,863/USD.
According to IDX s OTC trading report, Indonesian government bond trading activity strengthened to Rp39.9tn (vs. Rp36.2tn prior, or YTD avg.: Rp33.3tn). The 2.4-yr PBS030 series (maturing on 15-Jul-28) led market activity, recording Rp4.9tn in trading volume. Its price declined to 100.78 (-0.37%), while the yield increased to 5.51% (+16.82 bps). This was followed by the 5-yr FR0109 and 4.4-yr FR0104 series, which recorded Rp3.8tn and Rp3tn in trading volume, respectively.
As of 9-Mar, foreign ownership in SBN declined to Rp872.5tn (12.88% of the total outstanding). Year-to-date, domestic investors have remained the primary buyers, led by insurance companies and pension funds (+Rp55.3tn), followed by banks (+Rp51.8tn), other investors (+Rp43tn), Bank Indonesia (+Rp26.4tn), mutual funds (+Rp25.3tn), and retail investors (+Rp9.2tn). Meanwhile, foreign investors remained net sellers at Rp6.2tn YTD.
In the equity market, the JCI rebounded by 1.41% to 7,440.91 after two consecutive days of declines, supported by gains in basic materials, industrials, consumer cyclicals, and transportation sectors. However, market activity remained moderate, with the daily turnover at Rp19.1tn (vs. Rp23.8tn prior; or YTD avg.: Rp29.5tn), while foreign investors recorded net outflows of Rp2.63tn (vs. +Rp1.1tn prior; YTD: -Rp8.8tn). Regionally, Asian equities also rebounded as oil prices declined and geopolitical tensions showed signs of easing, improving overall risk sentiment. The KOSPI Index soared by +5.35% (YTD: +31.29%), while the Nikkei Index rose by +2.88% (YTD: 7.77%).
Domestic Corporate Bonds
On the corporate side, trading activity eased on Tuesday (10-Mar), with total volume was stable at Rp11.6tn (vs. Rp11.7tn prior, or YTD avg.: Rp5.5tn). The SMFP08ACN2 series (maturing on 9-Mar-27), rated idAAA, was the most actively traded with a total volume of Rp655bn. Its price held steady at 100.00, while the yield was virtually unchanged at 4.75% (-0.01 bps). This was followed by the DART04BCN1 series (maturing on 2-Jul-28), rated irA- with a volume of Rp405bn. Its price declined to 105.21 (-1.46%), while the yield increased to 8.01% (+71.42 bps). Close behind was the SMLPPI02BCN2 series (maturing on 24-Feb-31), rated idA(sy) with a volume of Rp408bn. Its price declined to 99.81 (-0.01%), while the yield rose to 7.30% (+0.24 bps).
Pefindo has affirmed idAAA rating with stable outlook to PT Permodalan Nasional Madani (PNM). At the same time, Pefindo has affirmed idAAA rating to PNM/s outstanding bonds and idAAA(sy) rating to PNM s outstanding sukuk. According to Pefindo, the rating is mainly driven by the very strong likelihood of support from the Indosnesian Government as the ultimate shareholder. PNM s standalone credit profile is support by its very strong business position as well as very strong liquidity and financial flexibility. Meanwhile, these strenghts are partly offset by PNM s moderate asset quality profile and profitability indicators.
Pefindo has affirmed idBBB+ rating with negative outlook to PT Pembangunan (Persero) Tbk (PTPP) and PTPP s Shelf Registered Sukuk Bonds III and IV. Pefindo has also affirmed idBBB+(sy) rating for PTPP s Sukuk Mudharabah I. According to Pefindo, the negative outlook reflects the combined impacts of PTPP s heightened refinancing risk stemming from upcoming bond maturities amid increasingly challenging funding access within the domestic construction industry. Meanwhile, the rating is constrained by PTPP s liquidity and limited financial flexibility. The corporate rating reflects PTPP s important role to the government and its diversified revenue sources. These strengths are offset by PTPP s weak capital structure and financial flexibility, exposure to high-risk property segments, and the volatile business environment.
Pefindo has affirmed idA rating with stable outlook to PT Lautan Luas Tbk. Pefindo has also affirmed id A rating for its Shelf Registered Bond III Year 2021 and Shelf Registered Bond IV Year 2024. According to Pefindo, the rating reflects Lautan Luas strong market position, good integrated operations and distribution channel, and good operating management. Meanwhile, the rating is constrained by Lautan Luas sizeable capital expenditure requirments and sensitivity to changes in macroeconomic conditions.
Pefindo has affirmed idAAA rating with stable outlook to PT Bank SMBC Indonesia Tbk (SMBC Indonesia) and its outstanding bonds. According to Pefindo, the rating is mainly driven by SMBC Indonesia s very strong likelihood of support from Sumitomo Mitsui Banking Corporation (SMBC) as the parent company. SMBC Indonesia s standalone credit profile reflects its very strong capitalization and market position, but it is partly offset by pressure on its profitability.
Pefindo has affirmed idAAA rating with stable outlook to PT Bank Central Asia Tbk (BBCA) and its idAA rating for the Bank s outstanding subordinated bond. The subordinated bond is rated two notches below BBCA s corporate rating to incorporate the risk of the debt instrument being written down in the event of non-viability. According to Pefindo, the rating reflects BBCA s superior market position, very strong liquidity profile, and very strong capitalization profile. The rating also incorporates the risk emanating from the tight competition and challenging macroeconomic conditions.
Pefindo has affirmed its idA- ratings for PT Adhi Karya (Persero) Tbk (ADHI), its Shelf Registered bond III, and SR bond IV. Outlook for the corporate rating is revised to CreditWatch with Negative Implications, reflecting ADHI s heightened liquidity risk following ADHI s inability to obtain SR Bond III holders approval to waive its financial covenants, putting ADHI currently in the remedial period until the end of June 2026. According to Pefindo, the rating reflects ADHI s strong market position, and its benefits as a state contarctor. Meanwhile, the rating is constrained by ADHI s high leverage, execution risks related to ADHI s growing order book, and a volatile business environment.
Fitch Ratings has revised the Outlook to Negative from Stable for 8 (eight) of 10 Indonesian non-financial corporates while affirming all Issuer Default Ratings (IDRs), following the revision of Indonesia s sovereign outlook to Negative. The affected entities include PT Telekomunikasi Indonesia Tbk (Telkom), PT Hutama Karya (Persero), PT Perusahaan Listrik Negara (Persero), PT Pertamina (Persero), PT Pertamina Geothermal Energy Tbk, PT Pertamina Hulu Energi, PT Profesional Telekomunikasi Indonesia, and PT Indofood CBP Sukses Makmur Tbk. The Outlook revision mainly reflects the strong linkage between these corporates and the Indonesian sovereign rating, either due to government ownership, policy roles, or constraints from the country ceiling. Meanwhile, PT Perusahaan Gas Negara Tbk maintained a Stable Outlook, while PT Mineral Industri Indonesia (Persero) retained a Positive Outlook, reflecting potential improvement in its standalone credit profile. Overall, the rating actions highlight that many Indonesian corporates remain sensitive to sovereign rating movements, given their operational exposure to the domestic economy and linkages to government credit quality.
