Outlook Perekonomian dan Pasar Obligasi di New Normal

Seminar Kemenkeu Corpu Talk

Handy Yunianto
Head of Fixed Income Research
handy.yunianto@mandirisek.co.id

Juni 2020
Krisis akibat Pandemi Covid-19 berbeda dengan krisis sebelumnya dari sisi cakupan
dan dampaknya
KRISIS COVID-19 2020
• Pandemic Covid terjadi di lebih
dari 200 negara.
• Pertumbuhan ekonomi global
diperkirakan mengalami resesi -
Cakupan Krisis 3%.
• Ekonomi Indonesia akan
mengalami perlambatan
signifikan
Posisi Eksternal CAD : - 2.7% dari PDB (2019)
Indonesia Cadangan Devisa: USD 130.5bn
(Mei 2020)
• Krisis terjadi di semua lini usaha,
termasuk industri retail,
Dampak Krisis consumer, UMKM (termasuk
UMKM value chain), dan turut
berdampak kepada korporasi
• Sektor yang terdampak:
Pariwisata, Hotel, Perdagangan,
Manufaktur dan Keuangan
Sumber: CEIC, Bloomberg dan berbagai sumber
KRISIS FINANSIAL GLOBAL 2008
• Pusat krisis terjadi di AS dan negara-
negara maju lainnya (terutama
Eropa)
• Negara berkembang masih tumbuh
tinggi, seperti Tiongkok yang tumbuh
9,4%
• Perekonomian Indonesia masih
tumbuh moderat 4,6%.
CAD : 0.02% dari PDB
Cadangan Devisa: USD 51.6bn
• Krisis hanya berdampak pada
korporasi besar
• Sektor yang terdampak adalah sektor
keuangan, terutama perbankan dan
capital market.
KRISIS FINANSIAL ASIA 1998
• Krisis terjadi di Asia yang berpusat
di Thailand, Korea Selatan dan
Indonesia.
• Ekonomi Indonesia mengalami
kontraksi 13%.
CAD : -2.27% dari PDB
Cadangan Devisa: USD 17.5bn
• Krisis terjadi pada korporasi besar,
khususnya yang memiliki
kewajiban utang luar negeri sangat
besar.
• Sektor yang terdampak adalah
sektor Perbankan sebagai
dampak gagal bayarnya
Korporasi.
2
 Global Economic Outlook
Expecting a global recession in 2020 amid the COVID-19 pandemic

IMF World Bank Bloomberg OECD

Area 2019 2020 2020 2021F 2021F
2020F 2021F 2020F 2021F 2020F 2021F Double Single Double Single
Hit Hit Hit Hit
World 2.9 -4.9 5.4 -5.2 4.2 -3.7 5.0 -7.6 -6.0 2.8 5.2

US 2.3 -8.0 4.5 -6.1 4.0 -5.7 4.0 -8.5 -7.3 1.9 4.1

Euro Area 1.2 -10.2 6.0 -9.1 4.5 -8.0 5.2 -11.5 -9.1 3.5 6.5

Indonesia 5.0 -0.3 6.1 0.0 4.8 0.4 5.5 -3.9 -2.8 2.6 5.2

Japan 0.7 -5.8 2.4 -6.1 2.5 -4.9 2.3 -7.3 -6.0 -0.5 2.1

China 6.1 1.0 8.2 1.0 6.9 1.8 8.0 -3.7 -2.6 4.5 6.8

India 4.2 -4.5 6.0 -3.2 3.1 4.2 -2.2 -7.3 -3.7 8.1 7.9

Russia 1.3 -6.6 4.1 -6.0 2.7 -4.9 3.1 n.a n.a n.a n.a

Brazil 1.1 -9.1 3.6 -8.0 2.2 -6.0 3.2 -9.1 -7.4 2.4 4.5

ASEAN-5 4.8 -2.0 6.2 n.a n.a n.a n.a n.a n.a n.a n.a

Source : IMF, World Economic Outlook April 2020 & Global

3 Economic Prospect June 2020/World Bank Report, OECD,
Bloomberg
 We expect GDP growth will be around 0.02% FY2020 (U-shape recovery)
The bottom is seen to occur in 2Q20 in which we expect -3.44% contraction

GDP Growth Rt Indonesia

1.40 1.33
1.31
6.00 1.35 1.27
1.30
5.00 1.25 1.201.19
1.18
4.00 1.20 1.141.131.131.131.13
1.121.11
1.15 1.101.101.09
1.061.061.061.051.051.051.05
3.00 1.10 1.041.041.041.03
1.011.011.00
1.05 0.990.98
2.00 1.00 0.96

1.00 0.95
0.90
0.00

National
Central Sulawesi
North Sulawesi

West Sulawesi
Nusa Tenggara Barat

Jambi
South Sulawesi
Bali
Bangka Belitung

Lampung
Bengkulu

North Sumatera
West Papua
M aluku
Papua
South Kalimantan
Central Kalimantan

Riau
East Java

West Sumatera
Banten
Yogyakarta
South Sumatera
Sulawesi Tenggara

East Kalimantan
Jakarta
Central Java
W est Java
Gorontalo

Riau island

Aceh

W est Kalimantan

North Kalimantan
-1.00
-2.00
-3.00
-4.00
2Q 20F
3Q 20F
4Q 20F
1Q 21F
2Q 21F
3Q 21F
4Q 21F
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20

Industrial Production Index (YoY%)

30
20
10
0
-10
-20

China India Indonesia

Malaysia Philippines Japan
South Korea Thailand Vietnam

4
In response to this crisis, governments and central banks all over the
world have enacted fiscal and monetary stimulus measures

Value of COVID-19 fiscal stimulus packages Most central banks globally also cut interest
in G20 countries, as a share of GDP rate this year
United States 10,0 China (10)
Russia (25)
Australia 9,7
Czech Republic (25)
Germany 4,5 Taiwan (25)
Canada Indonesia (50)
3,6
Colombia (50)
Indonesia 2,9 Malaysia (50)
Saudi Arabia 2,7 Poland (50)
Thailand (50)
Brazil 2,5
South Korea (50)
France 2,0 Australia (50)
Turkey 1,5
UK (65)
Mexico (75)
Italy 1,4 India (75)
China 1,2 Brazil (75)
Philippines (75)
Argentine 1,0
Chile (75)
South Korea 0,8 New Zealand (75)
Russia 0,3
Canada (100)
Hong Kong (114)
European Union 0,3 South Africa (125)
South Africa 0,2 Saudi Arabia (125)
Norway (125)
India 0,1
US (150)
Japan 0,1 Turkey (225)

- 2,0 4,0 6,0 8,0 10,0 12,0 (250) (200) (150) (100) (50) -

Source: Statistica and Mandiri Sekuritas as of 31-Mar Source: CentralBankNewsInfo as of 31-Mar

5
Indonesia’s position among EM countries
More fiscal room and monetary policy?
Thailand, Indonesia, and the Philippines have Mexico, Russia, and Indonesia have more
more fiscal room monetary policy stimulus room
120,0 Public Debt % of GDP 9,00 Nominal policy rate (%)
Average= 1.0
Average=-7.7
Less fiscal Turkey
8,00 More monetary
room Brazil
100,0 policy room
7,00
Sri Lanka
South Africa Srilanka Russia
80,0 6,00
India Mexico
Malaysia
5,00
Average=57.7 India Indonesia
60,0 China
Mexico
4,00
China
Average=3.85
Thailand
Turkey South Africa
40,0 Saudi Arabia Indonesia 3,00 Brazil
Limited monetary
Philippines Malaysia
policy room Philippines
2,00
More fiscal
Saudi Arabia
20,0 room
Russia 1,00
Fiscal balance % of GDP Real policy rate (ppt) Thailand
- -
(14,0) (12,0) (10,0) (8,0) (6,0) (4,0) (2,0) - (4) (2) - 2 4 6

Source: Bloomberg and Mandiri Sekuritas

Source: IMF Fiscal Monitor, April 2020
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EM Vulnerability Heat Map
Indonesia has higher external risk factors compared to other EMs
External Balances Fiscal Balance Banking System Leverage Monetary Indicators

S&P Total Foreign Central

Country Current Fiscal Primary Interest Non Loan to Real
Rating External ownership Gov't Debt bank
Account % Balance (% Balance to Payment/Rev Performance Deposit Benchmark
Debt to GDP to total outs (% of GDP) ownership
of GDP of GDP) GDP enue (%) Loan (%) Ratio (%) Policy Rate
(%) LCGB (%) govies (%)

Brazil BB- -2.7 38.0 10.4 -9.3 98.2 -5.2 29.8 3.20 n.a 0.6 29.3

China A+ 1.0 15.0 8.9 -11.2 64.9 -10.3 3.1 1.98 75.4 0.6 2.8

India BBB- -0.2 23.0 4.0 -7.4 74.3 -2.3 23.7 9.08 75.7 -1.8 7.4

Indonesia BBB -2.8 37.0 38.6 -5.07 36.9 -3.2 14.1 2.79 91.8 1.8 9.0

Malaysia A- 1.9 61.0 24.7 -4.2 63.0 -1.8 13.1 1.60 87.3 4.9 0.2

Mexico BBB -0.2 37.0 28.3 -4.2 61.4 -0.4 14.2 2.10 108.4 3.4 n.a

Philippines BBB+ 2.2 26.0 4.7 -3.4 42.9 -1.4 12.3 2.20 77.1 0.6 5.3

Russia BBB- 2.2 27.0 30.8 -8.9 17.9 -4.4 2.4 17.50 101.2 2.4 2.0

Saudi Arabia A- 6.3 23.2 n.a -12.6 34.0 -14.4 1.7 2.00 90.2 -0.3 n.a

South Africa BB- -3.0 51.0 37.1 -13.3 77.4 -8.6 12.1 4.00 114.0 -0.4 1.2

Sri Lanka B- -2.2 66.0 n.a -9.4 92.3 -3.0 44.1 4.70 99.6 0.3 n.a

Thailand BBB+ 6.8 30.0 17.0 -3.4 48.1 -3.0 5.2 2.99 115.8 3.5 6.5

Turkey B+ 1.2 60.0 11.4 -7.5 39.3 -4.7 9.1 4.96 109.3 -2.7 1.8
Average 0.8 38.0 19.6 -7.7 57.7 -4.8 14.2 4.5 95.5 1.0 6.6
Min -3.00 15 4.0 -13.3 17.9 -14.4 1.65 1.6 75.4 -2.7 0.2

Max 6.80 66 38.6 -3.4 98.2 -0.4 44.09 17.5 115.8 4.9 29.3

Source: IMF, IIF, CEIC, Worldbank, TradingEconomics.com and Mandiri Sekuritas

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 Proyeksi Potensi Permintaan Obligasi Pemerintah dari Investor Institusi
Domestik
Dengan target penerbitn SBN netto domestik tahun 2020 adalah Rp905tn untuk
menutupi defisit anggaran 6.34% PDB. Maka diperkirakan masih akan perlu tambahan
demand sebesar Rp486.5tn – yang berasal dari BI atau investor asing.

Net Buy/ (sell) - Rp Trillion

Investors Asumsi
2015 2016 2017 2018 2019 25-Jun-20 2020F

Adanya penurunan GWM, ekspektasi pertumbuhan

Bank (excl reverse repo) 63.1 26.9 77.8 63.8 53.2 221.5 221.3
DPK 8% dan pertumbuhan kredit 6% tahun 2020
Per Dec 2019, AUM Reksadana total 542.2tn, asumsi
Mutual Fund 15.8 24.1 18.3 14.6 12.2 5.3 24.1 AUM akan tumbuh 10% dan porsi fixed income fund
naik menjadi 25%.
Per Dec 2019, dana kelolaan Dapen dan Asuransi
Insurance and Pension Fund 27.5 104.1 23.3 65.6 57.2 36.0 104.1 mencapai Rp1,425tn. Asumsi pertumbuhan dana
kelolaan 10% dan porsi investasi di SBN naik ke 30%.

Ada peningkatan permintaan SBN dari BLU ,

Others 29.6 41.3 14.7 30.0 37.2 38.2 69.0
endowment fund dan dana haji
Total Net Issuances
Diperkirakan total net demand SBN tahun 2020
136.0 196.4 134.1 174.0 159.8 300.9 418.5
IDR government bonds berpotensi Rp418.5tn

Sumber: DMO dan Mandiri Sekuritas Estimate

8
Extraordinary times needs extraordinary
measures
Central bank ownership of government bond (%)

Japan 43,0

Brazil 29,3

Europe 29,0

United States of America 21,0

Indonesia 9,0

India 7,4

Thailand 6,5

Philippines 5,3

China 2,8

Russia 2,0

Turkey 1,8

South Africa 1,2

Malaysia 0,2

- 10,0 20,0 30,0 40,0 50,0

Source: IMF and Mandiri Sekuritas

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Obligasi terus memberikan kinerja yang positif
JCI Index bindo index bemsid index
280,00

260,00

240,00

220,00

200,00

180,00

160,00

140,00

120,00

100,00
Jun-10

Jun-15

Jun-20
Sep-11
Feb-12

Oct-13

Aug-14

Sep-16
Feb-17

Oct-18

Aug-19
Jan-10

Apr-11

Jul-12
Dec-12
May-13

Mar-14

Jan-15

Apr-16

Jul-17
Dec-17
May-18

Mar-19

Jan-20
Nov-10

Nov-15

Source: Bloomberg and Mandiri Sekuritas

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 Yield obligasi Indonesia masih menarik

Changes (bps) Real

10yr YTM Reference Inflation 10-yr Real
Bonds Benchmark
(%) Rate (%) Rate (%) Yield (ppt)
-1Month -1Year Rate (ppt)
Turkey 11.46 (4) (437) 8.25 11.39 (3.14) 0.07
South Africa 9.18 42 105 3.75 3.00 0.75 6.18
Indonesia 7.23 (45) (14) 4.25 2.19 2.06 5.04
India 5.89 (16) (100) 4.00 5.84 (1.84) 0.05
Russia 5.76 26 (160) 4.50 3.00 1.50 2.76
Colombia 5.86 59 5 2.75 2.85 (0.10) 3.01
Malaysia 3.06 12 (59) 2.00 (2.90) 4.90 5.96
Thailand 1.21 1 (94) 0.50 (3.44) 3.94 4.65

Average 6.21 9 (94) 3.75 2.74 1.01 3.47

Source: Tradingeconomics and Mandiri Sekuritas 30-June

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Our fair value for 10-yr INDOGB yields
The current 10-yr bond yield offering in the market is much higher than our fair yield
model by 94 bps; this is almost the same as in Sep-15.

Bond valuation is still attractive, as the 10-yr Fair yield regression model using four independent
bond yield is much higher than the fair value variables (UST yield, CDS, IDR, and BI7DRR rate)

Actual Fitted
Regression Statistics
10,00
Multiple R 0.998
9,50
R Square 0.996
9,00 Adjusted R Square 0.985

8,50 Standard Error 0.473

Observations 92.000
8,00

7,50

7,00 Standard P-
Coefficients Error t Stat value
6,50
UST10yr 0.730 0.1 7.3 0.0
6,00 ID CDS 5yr 0.621 0.1 4.8 0.0
USD IDR 0.000 0.0 7.6 0.0
5,50
BI rate 0.416 0.1 6.1 0.0
5,00
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20

Source: Bloomberg and Mandiri Sekuritas

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Conclusion: “short-term pain for long-term gain”

It’s not easy to measure the COVID-19 impact, as we also don’t know how long the
pandemic will last.
• Positive catalysts:
1) Global liquidity projection is still ample this year;
2) Lower global interest rate outlook (including for Indonesia)
3) Attractive bond yield valuation; and
4) Light investor positioning.
• Negative factors:
1) Foreign fund outflow; and
2) Widening twin deficit (budget deficit and current account deficit).
• However, we believe this is “short-term pain for long-term gain” for bond investors,
as we expect this extraordinary action to be temporary. We estimate the 10-yr
INDOGB yield at 7.5% in 2020, and for 2021 and 2022, it may lower further to 7%
and 6.5%, respectively, assuming COVID-19 is already contained and the fiscal
deficit will gradually slow down back to -3% of GDP.

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 Thank you
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