Bond Market Review (Wednesday,03/04)
Prices of Government Debt Securities (SUN) continued to weaken during yesterday’s trading session. PHEI data showed that the yield on the 5-year SUN benchmark (FR0109) rose by 7 basis points (bps) to 6.01%, while the yield on the 10-year SUN benchmark (FR0108) increased by 11 bps to 6.62%. Meanwhile, Bloomberg data indicated that the 10-year SUN yield curve (GIDN10YR) rose by 7 bps to 6.61%. The 10-year yield has now exceeded the upper bound of our weekly estimated range of 6.25%–6.51%, reflecting a combination of global yield dynamics, geopolitical developments, evolving domestic liquidity conditions, and recent rating outlook developments.
The outright transaction volume of Government Securities (SBN) amounted to Rp35.3 trillion yesterday, lower than the previous day’s volume of Rp52.9 trillion. FR0109 and FR0108 were the two most actively traded series in the secondary market, with transaction volumes of Rp8.2 trillion and Rp5.1 trillion, respectively. Meanwhile, outright transaction volume for corporate bonds was recorded at Rp6.5 trillion.
Fitch Ratings has revised the Outlook on Indonesia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at ‘BBB’. The outlook revision reflects increasing policy uncertainty and the erosion of consistency and credibility in Indonesia’s policy mix amid growing centralization of policymaking authority. These developments could weaken the medium-term fiscal outlook, dampen investor sentiment, and place pressure on external buffers. The rating affirmation reflects Indonesia’s track record in maintaining macroeconomic stability, positive medium-term growth prospects, a relatively moderate government debt-to-GDP ratio, and adequate external buffers. However, these strengths remain constrained by relatively weak revenue growth, high debt servicing costs, and lagging structural factors–such as governance indicators–compared with ‘BBB’-rated peers (Fitch Ratings).
At yesterday’s SRBI auction, Bank Indonesia set the total amount awarded at Rp1.5 trillion, indicating a more limited absorption than the two SRBI auctions last week (25 and 27 February), which recorded a combined total of Rp18.0 trillion (Rp8.0 trillion + Rp10.0 trillion). The weighted average yield (WAY) for the 12-month SRBI stood at 5.21%, increasing by approximately 4 bps from 5.17% at last Friday’s auction.
Bloomberg data showed that the Rupiah weakened by 0.12% against the US Dollar, moving from Rp16,872/US$ on Tuesday to Rp16,892/US$ yesterday.
Bond Market Preview (Thursday,03/05)
Persisting geopolitical tensions in the Middle East continue to weigh on sentiment. These tensions may increase inflation expectations. As of this morning, Bloomberg data shows that Brent crude oil prices have reached US$82.3 per barrel, up approximately 13.6% compared with the end of February. The latest CME FedWatch Tool indicates that market participants are anticipating a slower pace of Federal Funds Rate (FFR) cuts.
Global indicators this morning also point to somewhat negative sentiment for the bond market, reflected in rising US Treasury (UST) yields. The 5-year and 10-year UST yields increased by 4 bps and 3 bps, respectively, to 3.67% and 4.09%. Meanwhile, Indonesia’s 5-year Credit Default Swap (CDS) remained unchanged at 87 bps.
Taking the above factors into account, we anticipate heightened volatility in prices and yields of Rupiah-denominated Government Securities (SBN). Based on yield-curve valuation, the following bonds may be attractive for investors: FR0100, FR0103, FR0108, and FR0106.
Kindly find the link to our Fixed Income Daily Market View for March 5, 2026 provided below this message. Thank you and best regards!
IND
https://research.bnisekuritas.co.id/doc-view?z=bdf5bcfb-2468-40c4-8c74-8e929fd7f0ad
ENG
https://research.bnisekuritas.co.id/doc-view?z=eea4f4e5-940b-4346-bc7b-b40cc4b040e5
