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| Economics News, 3 Dec 2015 |
The Central Statistics Agency (BPS) recorded inflation happened back in November of 0.21% MoM after two months previously recorded deflation. In annual terms, inflation was recorded only 4.89% yoy. While the calendar year (January-November) recorded inflation of only 2.37%, the lowest in the last five years. As for core inflation in November reached 4.77% yoy, the lowest round of inflation seen in 2015. With shrinking the space for interest rate cuts become more open. But the rupiah volatility factor is still a major concern in determining BI benchmark rate today. We predict that Bank Indonesia will still hold interest rates at 7.5% level at the last meeting in this year.
Fixed Income Mutual Funds Grow.
The return on investment (return) fixed income funds (fixed income) since the end of 2014 until November 2015 the average growth of 3.2%. Fixed Income to be the only type of mutual fund that is growing than stock mutual funds that trimmed 18.3%, while mixed funds fell 8.9%. Fixed income mutual funds growth underpinned by domestic sentiment. In addition, growth in fixed income mutual fund returns can not be separated from the inflow of foreign investors to the bond market, as posted a net sell in the stock market. Sentiment plan rate hikes the Fed affects the stock market.
Summarecon and WOM Finance Bonds Oversubscribed.
The bonds are being offered by Summarecon Agung Tbk (Summarecon) and rides Ottomitra Multiartha Tbk (WOM Finance) oversubscribed (oversubscribed) each - each 1.5 times - 1.7 times and 1.3 times. Summarecon demand for the bonds reached Rp 750 billion - Rp 850 billion from the target emission value of Rp 500 billion. Initially Summarecon offers Bond II Phase I in 2015 in two series, 3 and 5 years, but the result of long-term bookbuilding noted more attractive to investors. Summarecon finally decided to issue bonds in just one series with a tenor of 5 years and a coupon of 11.25% or 25 bps higher than the lower limit of the bidding.
On the other hand, recorded a demand WOM Finance bonds worth Rp 800 billion from Rp 600 billion emission targets. Of the two series are offered, WOM Finance decided to give a coupon of 9.35% for Series A (1 year) 10 bps higher than the lower limit of the bidding. Whereas Series B (3 years) are set to give a coupon of 10.8% or 5 bps below the upper limit of the bidding. For the record, Summarecon rated idA + Valuation and WOM Finance is rated AA (idn) by Fitch Indonesia.
Foreign bond issuance of $ 3.5 Billion in Funding Pre Order 2016.
On December 2, 2015 (December 1st, 2015 New York time), the government made the sale transaction of Government Securities (SUN) denominated in US dollars and RI0146 RI0126 series. This transaction is part of the Global Medium Term Notes (GMTN) worth USD 40 billion. Currency bond issuance is part of a policy of pre-funding, in accordance with Law No.14 of 2015 on the State Budget (APBN) 2016, namely issuing securities at the end of 2015. The pre-funding policy is to ensure the availability of the initial budget of the fiscal year 2016.
The Government published a series of RI0126 tenor of 10 years with a coupon of 4.75% amounting to USD 2.25 billion. Investors ekspektasikan higher yields 5 bps (4.80%) of the coupon, or post the price at the level of 99.59%. Investor biggest buyers are from the United States, and of sector asset managers and banks. While the series RI0146 30-year tenor offers a coupon of 5.95% amounting to USD 1.25 billion. Just as the series RI0126, RI0146 investors a higher yield ekspektasikan 5 bps (6.0%) of the coupon offer, so post the price at the level of 99.29%.
For the record, it posted a foreign exchange auction SUN total incoming bid (total order book) worth USD 8.1 billion, or post the oversubscribed (oversubscribed) to 2.3 times. Indonesia received ratings of BBB- (stable) by Fitch, BB + (positive) from S & P and Baa3 (stable) from Moody's.
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