Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds delivered a mixed performance, with the 5Y yield (FR104) declining 4.2bps to 7.16% while the 10Y yield (FR0108) rose 1.1bps to 7.28%, resulting in a steepening of the 5Y–10Y curve by 5.3bps. The INDOBeX Composite edged down 0.02% to 430.207. Global sentiment remained cautious as the US-Iran conflict entered its tenth consecutive day, with both sides exchanging fresh strikes while Yemen’s Iran-backed Houthi group threatened shipping in the Red Sea, intensifying concerns over disruptions to global energy trade alongside the ongoing Strait of Hormuz standoff. Domestically, the Ministry of Finance reaffirmed its 2026 net bond issuance target while signaling that gross issuance could be reduced if additional bilateral or multilateral financing is secured. The government also advanced its funding diversification strategy by marketing its inaugural CNY-denominated panda bonds, targeting an initial issuance of up to CNY7 billion under a CNY30 billion program over the next two years. Meanwhile, Indonesia’s 21 July SUN auction drew strong demand, attracting IDR67.9 trillion in bids against an issuance target of IDR32.0 trillion, equivalent to a 2.12x bid-to-cover ratio, with investor interest concentrated in the benchmark FR0109 and FR0108 series. On the credit front, PT Bank Victoria International Tbk and PT Sarana Multi Infrastruktur (Persero) announced plans to repay their respective maturing bonds using internal funds, supported by solid liquidity positions.