Demand for Indonesia’s SUN Hikes, while CDS Trend Decreases
Demand for government securities (SUN) at an auction on Tuesday, June 2, increased. Incoming bids reached Rp 105.27 trillion. However, the Government only absorbed IDR 24.35 trillion, 23% of the incoming bids. Investors are seeking SUNs of 5 and 10 years. In the 10-year tenor, the total incoming bids reached Rp 44 trillion, but the Government only absorbed Rp 8 trillion. (Kontan)
Credit Default Swap (CDS) 5 year Indonesia was in a decreasing trend since May 2020 after being reached 290bps at March 2020. As of 2 June 2020, CDS 5 year Indonesia stood at 146bps. This in line with 10-year yields of Indonesian Govt bonds that dropped to 7.14% in 2 June 2002 from 8.38% in March, the highest yield in 2020. This shows that the risk appetite of investors started to improve.
Source: Danareksa Sekuritas Debt Research