Government will hold bonds auction next week offering the longest tenor bonds FR0067 (27-year) for the first time along with other benchmark bonds. The yield on FR0067 has declined 13bps during this month trading and 21bps year to date. According to our data, FR0067 closed at 103.7 price yielding 8.40% yesterday. Referring to DJPPR schedule, government will offer FR0067 four times this year i.e. in February, April, September, and October. Government also will be reopening FR0061 (5.2-year), FR0059 (10.2-year) and FR0072 (19.2-year) on next week auction.
The 5y benchmark FR0061 closed at 98.93 with the yield of 7.25% yesterday. Meanwhile, the price of FR0059 and FR0072 recorded at 96.23 (7.53%) and 101.48 (8.10%) respectively. We expect the government would be selective to absorb investors bids given they has nearly achieved issuance target for 1Q. Year to date, total funds raising from bonds auction amounted to IDR102.25trn, has nearly its initial guidance of IDR155trn.