One Pager Series — SIMINVEST Bond Pharos
Indonesian government bonds were mixed, with the 5Y yield (FR104) rising 4.3bps to 6.98% while the 10Y yield (FR0108) fell 2.3bps to 7.12%, flattening the 5Y–10Y curve by 6.6bps, while the INDOBeX Composite rose 0.02% to 438.590. US Treasuries rallied after the Fed raised its policy rate by 25bps to 3.75%–4.00%, with the 10Y yield falling 4bps to 4.98%, although persistent inflation, higher oil prices, heavy government issuance, and fiscal risks continued to pressure longer-dated bonds. Foreign outflows from Indonesian government bonds reached USD747.4mn following the maturity of FR0037 and FR0056, although the Finance Ministry attributed the decline in foreign ownership to maturities rather than outright selling pressure, with investors subsequently buying IDR1.98tn in the secondary market. Meanwhile, Bank Indonesia awarded USD235mn of SVBI at a 3.742% weighted-average yield, with all bids concentrated in the 1-month tenor. On the credit front, Fitch affirmed INA’s Long-Term Foreign- and Local-Currency IDRs at ‘BBB’ with a Negative Outlook, reflecting its assessment of an “Almost Certain” likelihood of extraordinary government support.