JAKARTA - Movement of the market of government securities (SUN) throughout the week will be greatly influenced by the movement of the exchange rate.
Analyst PT Millenium Danatama Desmond Asset Management, Silitonga predict, the benchmark 10-year bond yields will be in the range of 7% to 7.5%. According to him, the trend of a weak exchange rate that occurred during the last week giving the impact pressure on the government securities market. It is seen from the movement of the yield curve back up, on Thursday and Friday last week.
If the previous 10-year government bond yields benchmark series (FR0070) had touched the level of 6.9%, then at the end of last week, the yield closed at 7.3%. Significant correction occurred in the middle tenor yields (5 years-15 years) were on average increased by about 230 bps.
"The high foreign funds in the securities market, which reached 40.1% or about Rp 507 trillion total ouststanding make SUN sensitive to exchange rate depreciation," said Desmond, Sunday (8/3) night.
Throughout the past two months, the weakening of the rupiah has occurred as a high demand for US dollars. This is presumably because still open to speculation over the Fed raising interest rates. However, the level of the rupiah which is still below the level of Rp 13,000 keep pushing strangers into the SUN. "There is a possibility when the rupiah at the top level of Rp 13,000 late, then the correction of the SUN can happen."
Throughout this week, the movement of the securities market is largely determined by the exchange rate. Meanwhile, Bank Indonesia is trying so that the exchange rate is not translucent Rp 13,000. Foreign exchange reserves as of February which rose to US $ 115 billion to ammunition to maintain the rupiah.
This week, the government will conduct an auction on 4 series SBSN the indicative target of Rp 2 trillion. Government funding is targeted absorb around 2 trillion of this auction with the indicative target in about 2-3 times the indicative target dr. "SUN auction yield is likely to be slightly higher than the previous week's auction of 2 on average about 20bps-30 bps."
Analyst PT Millenium Danatama Desmond Asset Management, Silitonga predict, the benchmark 10-year bond yields will be in the range of 7% to 7.5%. According to him, the trend of a weak exchange rate that occurred during the last week giving the impact pressure on the government securities market. It is seen from the movement of the yield curve back up, on Thursday and Friday last week.
If the previous 10-year government bond yields benchmark series (FR0070) had touched the level of 6.9%, then at the end of last week, the yield closed at 7.3%. Significant correction occurred in the middle tenor yields (5 years-15 years) were on average increased by about 230 bps.
"The high foreign funds in the securities market, which reached 40.1% or about Rp 507 trillion total ouststanding make SUN sensitive to exchange rate depreciation," said Desmond, Sunday (8/3) night.
Throughout the past two months, the weakening of the rupiah has occurred as a high demand for US dollars. This is presumably because still open to speculation over the Fed raising interest rates. However, the level of the rupiah which is still below the level of Rp 13,000 keep pushing strangers into the SUN. "There is a possibility when the rupiah at the top level of Rp 13,000 late, then the correction of the SUN can happen."
Throughout this week, the movement of the securities market is largely determined by the exchange rate. Meanwhile, Bank Indonesia is trying so that the exchange rate is not translucent Rp 13,000. Foreign exchange reserves as of February which rose to US $ 115 billion to ammunition to maintain the rupiah.
This week, the government will conduct an auction on 4 series SBSN the indicative target of Rp 2 trillion. Government funding is targeted absorb around 2 trillion of this auction with the indicative target in about 2-3 times the indicative target dr. "SUN auction yield is likely to be slightly higher than the previous week's auction of 2 on average about 20bps-30 bps."
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