Government bond auction demand rebounded on 26-May as expected, with total incoming bids rising to Rp57.3tn from Rp51.4tn in the previous auction, although still below the YTD average of Rp68.5tn. Demand also remained comfortably above the government s issuance target of Rp36tn. Bids continued to concentrate in the belly segment, with the 4.9-yr FR109 attracting Rp20.2tn and the 10-yr FR108 receiving Rp8.5tn. Combined, both series accounted for 50.1% of total incoming bids, higher than 43.7% in the previous auction. Demand for longer-tenor bonds (>14 years) also improved to Rp20.9tn from Rp18.8tn previously, with SPN demand moderating to Rp7.7tn from Rp10.1tn.
From a flow perspective, offshore participation rebounded to Rp7.2tn (+42.2% from the previous auction), although still below the YTD average of Rp8.1tn. The recovery in foreign demand was likely supported by improving regional sentiment following progress in US-Iran negotiations, after President Trump signaled a two-phase framework, starting with the reopening of the Strait of Hormuz. Awarded foreign bids also rose significantly to Rp4.9tn from only Rp2.4tn in the previous auction and above the YTD average of Rp4.1tn, indicating foreign investors remained aggressive in bidding at attractive yield levels.
According to IDX s OTC trading report, Indonesian government bond trading activity strengthened on Tuesday (26-May), with total volume rising to Rp51.8tn (vs. Rp21.6tn on 25-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 5-yr FR0109 benchmark series (maturing on 15-Mar-31) led market activity, recording Rp14.5tn in trading volume. Its price declined to 96.78 (-2.25%), while the yield rose to 6.67% (+55.17 bps). This was followed the 0.1-yr PBS032 benchmark series (maturing on 15-Jun-26), recording Rp7.2tn in trading volume. Its price declined to 99.75 (-0.05%), while the yield rose to 6.61% (+39.30 bps). Close behind was the 10-yr FR0108 benchmark series (maturing on 15-Apr-36), with a total volume of Rp4.2tn. Its price increased to 102.10 (+3.21%), while the yield declined to 6.21% (-43.81 bps).
On the supply side, the government issued Rp36.9tn, above both the initial target and the previous auction issuance of Rp30.3tn. Meanwhile, the weighted average cost of funds increased further to 6.73% from 6.55%, although the average tenor shortened to 11.8 years from 14.8 years previously. Year-to-date, total gross bond issuance has reached Rp791.4tn, equivalent to 50.5% of the FY2026 issuance target.
Following the auction, INDOGB yields moved slightly higher across the curve despite positive foreign inflows of around Rp3.7tn, as continued rupiah depreciation limited the room for further yield declines. The 5-yr FR109 yield rose to 6.68% (+5.5 bps), the 10-yr FR108 to 6.68% (+2.1 bps), the 15-yr FR106 to 6.84% (+1.8 bps), and the 20-yr FR107 to 6.84% (+1.5 bps). Meanwhile, external indicators improved modestly, with Indonesia s 5-yr USD sovereign yield falling by 5 bps to 4.83%, while the 5-yr CDS narrowed by 1 bps to 90.84. Separately, the rupiah weakened further by 0.26% to Rp17,789/USD (-2.51% MTD, -6.58% YTD).
In the equity market, the JCI extended its decline, in line with weaker Asian markets, falling by 1.2% to 6,130 (-11.9% MTD, -29.1% YTD). Regional sentiment turned cautious after US and Israeli forces reportedly struck Iranian vessels and missile launch sites in the Strait of Hormuz only hours after President Trump stated that US-Iran ceasefire negotiations were proceeding nicely. The renewed tensions highlighted the fragility of the ongoing negotiations and pushed investors back toward a risk-off stance ahead of the upcoming US PCE inflation release later this week. Stock trading value reached Rp18.1tn, bringing the average daily trading value in 2026 to Rp24.1tn. Foreign investors recorded net equity outflows of Rp1.6tn, resulting in cumulative inflows of Rp4.4tn MTD and cumulative outflows of Rp45.5tn YTD.
Domestic Corp Bond Market
On the corporate side, trading activity strengthened on Tuesday (26-May), with total volume rising to Rp12.2tn (vs. Rp9.2tn on 25-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 BUMI01BCN5 series (maturing on 26-May-29), rated idA+, was the most actively traded with a total volume of Rp971bn, marking its debut on the secondary market. It traded at 100.50, yielding 8.56%. This was followed by the MBMA01ACN1 series (maturing on 15-Jul-27), rated idA with a volume of Rp430bn. Its price increased to 101.72 (+0.76%), while the yield declined to 6.91% (-506.35 bps). Close behind was the SMPPGD03ACN5 series (maturing on 13-Sep-26), rated idAAA(sy) with a volume of Rp400bn. Its price rose to 101.00 (+0.97%), while the yield declined to 6.21% (-327.00 bps).
Pefindo has assigned idA rating with stable outlook to PT Perkebunan Nusantara III (PTPN III). According to Pefindo, the rating reflects its strong likelihood of government support, in addition to the PTPN III s standalone credit profile, which is supported by its extensive land area with integrated and diversified operations, and moderate financial profile. Meanwhile, the rating is constrained by its execution risk of group transformation and exposure to fluctuating global commodity prices, unfavorable weather, and regulatory changes.
Fitch Ratings Indonesia affirmed PT Hino Finance Indonesia s National Long-Term Rating at AA+(idn) with Stable Outlook and removed the Rating Watch Evolving, following the stabilisation of parent Hino Motors credit profile after its recapitalisation and merger into ARCHION Corporation. HFI s rating remains driven by expected support from Hino Motors, given its role as the captive financing arm for Hino commercial vehicle sales in Indonesia, supported by strong operational integration and shared branding. Fitch also noted HFI maintains an adequate standalone profile, supported by solid positioning in the commercial vehicle financing niche, above-peer asset quality, moderate leverage, and stable funding access.
Fitch Ratings Indonesia affirmed PT Pelita Indonesia Djaya s (PID) National Long-Term Rating at AA+(idn) and Short-Term Rating at F1+(idn) with Stable Outlook, reflecting PID s strong linkage with parent PT Pelayaran Nasional Indonesia (PELNI). Fitch views PID as strategically and operationally important to PELNI through its role in supporting maritime transportation, logistics, maintenance, and manpower services, with over 90% of revenue tied to intra-group business. PID s standalone profile remains supported by stable revenue growth, conservative leverage, and its integral role within the PELNI group, although higher capex plans may gradually pressure leverage over the medium term.
