Menu
We noticed that the ‘fight’ between the ‘flight to safety’ strategy triggered by geopolitical conflict in the Middle East and the bearish sentiment caused by the US inflation data is still ongoing, as reflected by the buying action on global bond markets on Friday (10/13) which caused the S&P bond index for developed markets to rise 0.2% and UST and Bund 10Y yields to fall (-9) and (-5) bps to 4.61% and 2.74%. The buying action continued even though 1-year consumer inflation expectations for October went up to 3.8% (Sep: & Cons: 3.2%). This, coupled with the release of September CPI data, fueled concerns that the Fed would raise its Fed rate by 1X25 bps to 5.75% in December. At the moment, 32% of analysts expect a hike in December, while 66% predict that the rate will not change until the end of this year. We project the INDOGB 10Y yield and Rupiah to consolidate at 6.75-6.85% and IDR 15,650-15,750 per USD today. The release of September trade balance data might become a positive catalyst for Rupiah, especially if the surplus remains in the USD 2-2.5bn range.
Fixed Income News: BI issued IDR 21.9tn worth of SBNs at last week's auction (Prev: IDR 20.3tn). We noticed that BI decided to increase supply even though demand fell to IDR 22.6tn (Prev: IDR 24.3tn). In our opinion, the action was an indirect intervention to prevent further depreciation of Rupiah by attracting as many foreign funds as possible to the very short-term instruments (1 week to 1 year). (Bank Indonesia)
Global Economic News: Deflationary pressure still loomed over China's economy in September. Although China's PPI deflation fell to -2.5% yoy in September (Aug: -3% yoy; Cons: -2.4% yoy), China's CPI inflation fell to 0% (Aug: 0.1% yoy; Cons: 0.3% yoy) . This indicates that China's economic slowdown will continue for a while. (Reuters)
Domestic Economic News: Rice imports in January-July 2023 reached USD 627.2mn (2022: USD 202mn). The rice import value will continue to increase because the value still does not take into account the remaining rice import quota of 300,000 tons (out of a total of 2 million tons) as well as the potential for an additional rice import quota of 1.5 million tons to maintain Bulog's rice stocks. We estimated that FY23 rice imports could reach USD 1bn. (Kontan)
Recommendation: FR0040, FR0050, FR0068, FR0100.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
The company offers a variety of financial services, including equity, debt and derivative securities brokerage services, research and portfolio management, asset management and capital market services, as well as a range of other investment solutions. Samuel Sekuritas Indonesia is also a leader in providing financial education and training, and has established itself as a leading provider of investor relations services.
The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
In addition to its financial services, Samuel Sekuritas Indonesia also offers a range of other services, such as corporate finance and advisory services, mergers and acquisitions, and venture capital.
