HALISTER1: Extend Duration for Lower Indonesia Yields: Mandiri Sekuritas

Extend Duration for Lower Indonesia Yields: Mandiri Sekuritas

(Bloomberg) -- Indonesia 10-year govt bond yields may decline toward 6.54% as Bank Indonesia is seen reducing rates to 6.25%, Handy Yunianto, head of fixed-income research at PT Mandiri Sekuritas writes in note received today
  • Seasonally, August is the best time to buy IDR government bonds, says Yunianto
  • Foreign fund inflows will remain supportive:
    • Spread between 10-year IDR and USD yields at 547 bps is still more than the long-term average of around 500 bps
    • Indonesian govt bond yields, nominal and real, are attractive compared with other emerging markets
    • S&P Global could upgrade sovereign rating in early 2017 if tax amnesty is a success
  • Yield on 8.375% govt bond due Sept. 2026 declines 1 bp to 6.960%, having fallen 10 bps this week; yield reached 6.931% earlier, lowest level since June 2013
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Handy Yunianto (Mandiri Sekuritas PT)

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