One Pager Series — SIMINVEST Bond Pharos
Indonesian government bonds sold off sharply, with the 5Y yield (FR104) rising 17.5bps to 7.13% and the 10Y yield (FR0108) climbing 20.2bps to 7.42%, steepening the 5Y–10Y curve by 2.7bps, while the INDOBeX Composite fell 0.78% to 436.008. Globally, US producer inflation surged 1.3% MoM in September, driven by a 10.8% jump in energy costs, while retail sales rose 0.8%, although underlying consumer spending remained subdued. Meanwhile, markets reduced the probability of a Fed rate hike at the October 27-28 meeting to below 15% after Chair Kevin Warsh reiterated the Fed’s commitment to price stability without signaling an immediate policy shift. Domestically, MSCI’s warning over Indonesia’s emerging-market status pressured state-owned banks’ USD AT1 bonds, widening spreads on BMRI and BNI notes amid concerns over market transparency and enforcement. On the credit front, PEFINDO assigned PT Kilang Pertamina Balikpapan (KPBA) an idAAA(st) rating, supported by strong parental backing from Pertamina, a solid project structure, and stable petroleum product demand, although project completion risks and high leverage remain constraints.