FIXED INCOME RESEARCH

13 September 2021

Indonesia Fixed Income

Research Team
Rates & Credit Market Update +6221 5093 9888

Indonesia Composite Bond Index Increased 0.07% To 327.96

US Producers Price Index Surged 8.30% (yoy) in August 2021
Corporate Bonds & Sukuk Issuances Reached IDR68.4 Trillion

Currency Movement Government Bonds

FX Rate 10-Sep (-1 day) Chg. (%)
 Government bond prices rebounded on trading at the secondary
USD/IDR 14203 14253 -0.35%
market last Friday (10/09). Indonesia Composite Bond Index
EUR/USD 1.181 1.183 -0.09%
GBP/USD 1.384 1.384 0.01% increased 0.07% to 327.96. Yield of 5-year (FR0086) and 10-
USD/JPY 109.9 109.7 0.20%
USD/SGD 1.342 1.343 -0.10% year (FR0087) benchmark dropped 2 bps and 3 bps to 5.05%
USD/THB 32.67 32.71 -0.14%
and 6.13%, respectively. Meanwhile, yield of 15-year (FR0087)
USD/MYR 4.136 4.149 -0.31%
Source: Bloomberg and 20-year (FR0083) benchmark declined 0.4 and 1.3 bps to
IGB Benchmark Bonds 6.26% and 6.85%.
TTM Yield +/-
Series Yield Price
(Year) (bps)  Wall Street recorded further drop at the end of trading day last
FR0086 4.60 -2.9 5.05% 101.8
FR0087 9.44 -2.3 6.13% 102.6 week after the US government reported the producer price index
FR0088 14.69 -0.3 6.26% 99.9
surged to the highest level in almost eleven years. The Dow
FR0083 18.61 -1.2 6.85% 106.8
Source: IBPA Jones Industrial Average closed 0.78% lower to 34,607.72, while
10-year Government Bond Yield the S&P 500 index tumbled 0.77% to 4,458.58. In the past one
Chg. week, the Dow Jones and S&P 500 index have declined by
Country Yield (%) (-1 day)
(bps)
India 6.18 6.18 0.00
2.15% and 1.7%, respectively. The US Labor Department
Turkey 16.5 16.6 -4.50 reported producer price index throughout August 2021 rose
Singapore 1.39 1.39 -0.50
Thailand 1.67 1.70 -2.50 0.7% (mtm), slightly higher than analysts' forecast of 0.6%. On
Malaysia 3.25 3.22 3.10
an annual basis, the producer price index soared 8.3%, which
Korea 2.02 2.03 -1.20
China 2.87 2.87 -0.40 was the highest annual increase since November 2010. The
Japan 0.04 0.04 0.40
US 1.34 1.30 4.50 data came amid rising inflation concerns fueled by supply chain
Source: Bloomberg
issues, and shortages of various consumer and producer goods.
RHB Sekuritas – Recent Projects Federal Reserve officials expected the inflationary pressures
Shelf Registration Bond and Sukuk might ease until the end of this year, but last week’s data
Sarana Multigriya Finansial (idAAA by Pefindo)
Tenor Indicative Coupon suggested that the trend would likely continue. Furthermore,
Series A: 3-year 5.50% - 6.50%
statement from President of the Federal Reserve Bank of
Series B: 5-year 6.00% - 7.00%
Series A: (Sukuk) 2-year 5.00% - 6.00% Cleveland Loretta Mester also added more pressure to the US
Book building: 10 - 18 June 2021 market. In her latest proclamation, Mester emphasized that the
Payment: 07 July 2021
central bank could start easing its bond-buying program this
Shelf Registration Bond & Sukuk year despite weak jobs report in August. From the domestic
Wijaya Karya (idA by Pefindo)
Tenor Indicative Coupon side, several sentiments that could affect domestic bond price
Series A: 3-year 8.20% - 8.70%
Series B: 5-year 8.50% - 9.00% movements this week include the conventional IGB auction
Series C: 7-year 9.10% - 9.75% conducted on September 14, and trade balance data that will be
Book building: 20 - 30 August 2021 released on September 15, 2021.
Payment: 07 September 2021

See important disclosures at the end of this report 1

Government Bonds Ownership Corporate Bonds & Economics

Institution In Trillion IDR In Percentage (%)  The Indonesia Stock Exchange (IDX) recorded that the total
Bank 1,513.5 35.0% issuances of bonds and sukuk throughout 2021 have reached 71
Bank Indonesia 563.7 13.0%
Mutual Fund 137.1 3.17% emissions from 47 issuers amounting to IDR68.44 trillion. Last
Insurance & Pension Fund 631.5 14.6%
week, there were 8 bonds, 2 Sukuk Mudharabah, and 2 Sukuk
Foreigners 974.9 22.5%
Individual 198.6 4.59% Ijarah listed on the IDX, including PT Sinas Mas Multiartha Tbk
Others 305.7 7.07%
Total 4,325.0 100.0% (Shelf Registration Bonds II Sinar Mas Multiartha) worth
Source: DJPPR (as of August 13, 2021)
IDR705.7 billion, and PT Bank Pembangunan Daerah Sulawesi

Yield Spread (2- and 10-year Bond) Utara Gorontalo (Shelf Registration Bond I Bank Sulutgo Phase I
2021) amounting to IDR750 billion. Besides the financial sector,
state-owned companies such as PT Hutama Karya (Persero)
also issued Shelf Registration Bonds II Hutama Karya Phase I
2021 and Shelf Registration Sukuk Mudharabah I Hutama Karya
Phase I 2021, with a value of IDR1 trillion and IDR500 billion,
respectively. Moreover, PT Wijaya Karya (Persero) Tbk. Issued
Shelf Registration Bonds II Wijaya Karya Phase I 2021 and Shelf
Registration Sukuk Mudharabah II Wijaya Karya Phase I 2021,
with a nominal value of IDR1.75 trillion and sukuk worth IDR750
billion. In addition, PT Angkasa Pura I (Persero)also issued the
Shelf Registration Bonds I Angkasa Pura I Phase I 2021 and the
Shelf Registration Sukuk Ijarah I Angkasa Pura I Phase I 2021,
with a value of IDR1.11 trillion and IDR496 billion, respectively.
Thus, the IDX recorded that the total issuance of corporate
Credit Default Swap
bonds and sukuk to date is 484 issuances with an outstanding
nominal value of IDR430.35 trillion and US$47.5 million. The
issuance was carried out by 127 issuers. (Bisnis Indonesia)

 Pefindo has affirmed its “idAA+” rating for PT Kereta Api

Indonesia (Persero) (KAII) as well as its outstanding bonds.
Pefindo has maintained a “negative” outlook for KAII’s corporate
rating to anticipate weaker than expected financial profiles
because of the prolonged Covid-19 pandemic impact to the
Company’s operational activities. The rating reflects Pefindo’s
view of the government’s strong support to KAII due to the
strategic importance of railway transportation, its superior
business position in the railway sector in Indonesia, and stable
revenue from freight transportation segment. The rating is
constrained by KAII’s weak operating performances due to
Covid-19 pandemic, as well as its high leverage and weak cash
flow indicators. (Pefindo)

2
Government Bonds Prices
Closing Price Data : 10-Sep-2021

Series Maturity TTM Coupon Price YTM Est. Yield Fair Price Spread (bps) Recom m endation

FR0061 15-May-22 0.68 7.000% 102.56 3.098% 3.017% 102.65 10 Fair

FR0035 15-Jun-22 0.76 12.90% 107.16 3.163% 3.073% 107.34 18 Cheap
FR0043 15-Jul-22 0.84 10.25% 105.40 3.608% 3.127% 105.89 49 Cheap
FR0063 15-May-23 1.68 5.625% 102.79 3.880% 3.639% 103.20 41 Cheap
FR0046 15-Jul-23 1.84 9.500% 109.70 3.959% 3.735% 110.18 48 Cheap
FR0039 15-Aug-23 1.93 11.75% 114.11 4.030% 3.783% 114.68 58 Cheap
FR0070 15-Mar-24 2.51 8.375% 109.52 4.320% 4.097% 110.12 60 Cheap
FR0077 15-May-24 2.68 8.125% 109.51 4.309% 4.183% 109.89 37 Cheap
FR0044 15-Sep-24 3.02 10.00% 115.03 4.584% 4.349% 115.80 77 Cheap
FR0081 15-Jun-25 3.76 6.500% 105.64 4.834% 4.690% 106.17 52 Cheap
FR0040 15-Sep-25 4.02 11.00% 121.73 4.952% 4.797% 122.40 67 Cheap
FR0086 15-Apr-26 4.60 5.50% 101.87 5.038% 5.028% 101.91 4 Fair
FR0037 15-Sep-26 5.02 12.00% 129.50 5.223% 5.183% 129.76 26 Cheap
FR0056 15-Sep-26 5.02 8.375% 114.10 5.143% 5.183% 113.93 -16 Dear
FR0090 15-Apr-27 5.60 5.125% 100.02 5.121% 5.382% 98.77 -125 Dear
FR0059 15-May-27 5.68 7.000% 107.83 5.378% 5.408% 107.68 -14 Dear
FR0042 15-Jul-27 5.85 10.25% 123.25 5.530% 5.462% 123.67 42 Cheap
FR0047 15-Feb-28 6.44 10.00% 123.00 5.673% 5.638% 123.24 24 Cheap
FR0064 15-May-28 6.68 6.125% 102.61 5.648% 5.707% 102.28 -33 Dear
FR0071 15-Mar-29 7.52 9.000% 117.88 6.005% 5.920% 118.46 58 Cheap
FR0078 15-May-29 7.68 8.250% 113.81 5.976% 5.960% 113.94 12 Cheap
FR0052 15-Aug-30 8.93 10.50% 128.90 6.226% 6.220% 128.98 8 Fair
FR0082 15-Sep-30 9.02 7.000% 105.90 6.137% 6.236% 105.21 -69 Dear
FR0087 15-Feb-31 9.44 6.500% 102.64 6.126% 6.309% 101.33 -130 Dear
FR0073 15-May-31 9.68 8.750% 117.83 6.262% 6.349% 117.15 -68 Dear
FR0054 15-Jul-31 9.85 9.500% 122.57 6.374% 6.376% 122.57 0 Fair
FR0091 15-Apr-32 10.60 6.375% 102.87 6.003% 6.485% 99.16 -372 Dear
FR0058 15-Jun-32 10.77 8.250% 113.54 6.480% 6.507% 113.32 -22 Dear
FR0074 15-Aug-32 10.94 7.500% 107.92 6.476% 6.529% 107.50 -42 Dear
FR0065 15-May-33 11.68 6.625% 101.00 6.501% 6.616% 100.06 -93 Dear
FR0068 15-Mar-34 12.52 8.375% 114.69 6.628% 6.698% 114.06 -63 Dear
FR0080 15-Jun-35 13.77 7.500% 107.22 6.688% 6.795% 106.22 -99 Dear
FR0072 15-May-36 14.69 8.250% 112.82 6.850% 6.850% 112.82 1 Fair
FR0088 15-Jun-36 14.69 6.250% 99.76 6.274% 6.854% 94.43 -532 Dear
FR0045 15-May-37 15.69 9.750% 124.25 7.150% 6.896% 127.08 283 Cheap
FR0075 15-May-38 16.69 7.500% 105.66 6.921% 6.930% 105.57 -9 Fair
FR0050 15-Jul-38 16.85 10.50% 132.50 7.148% 6.935% 135.08 258 Cheap
FR0079 15-Apr-39 17.61 8.38% 114.73 6.914% 6.954% 114.29 -44 Dear
FR0083 15-Apr-40 18.61 7.500% 106.69 6.857% 6.973% 105.44 -125 Dear
FR0057 15-May-41 19.69 9.500% 124.50 7.158% 6.987% 126.64 214 Cheap
FR0062 15-Apr-42 20.61 6.375% 91.50 7.170% 6.996% 93.27 177 Cheap
FR0092 15-Jun-42 20.78 7.125% 104.22 6.743% 6.997% 101.37 -284 Dear
FR0067 15-Jul-43 21.86 8.750% 117.25 7.189% 7.005% 119.36 211 Cheap
FR0076 15-May-48 26.70 7.375% 103.81 7.055% 7.052% 103.85 4 Fair
FR0089 15-Aug-51 29.95 6.875% 101.08 6.790% 7.131% 96.85 -423 Dear

Source: Bloomberg, IBPA, RHB Estimate

YTM Est. Yield

9.0%

7.5%

6.0%

4.5%

3.0%

1.5%

0.0%
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32
Term To Maturity (Year)

3
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PTDMG & Partners Research Guide to Investment Ratings

Buy: Share price may exceed 10% over the next 12 months 4
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