Triggering the crisis in Europe in the SUN Profit Taking

JAKARTA. Action international rating agency, Standard & Poor's (S & P), cut the debt ratings of Greece and Portugal make markets Government Securities (SUN) was shaken. Yesterday (28 / 4), profit-taking investors (profit taking) so the price of reference corrected SUN.

The analysts expected, partly because foreign funds pull back to invest in foreign debt the U.S. government aka the U.S. treasury. The proof, yesterday, the yield (earnings yield) debt securities of the 10-year U.S. dropped to 3.69% compared to the previous day at 3.81%. While U.S. bond yields on five-year tenor is also down from 2.56% to 2.42%.

Bond analysts said Trimegah Ariawan, U.S. bond prices rose as demand increases. Understandably, investors assume U.S. treasury is a safer investment instruments than bonds of other countries.

Based on data Traders Association SUN (Himdasun), the reference price series SUN FR 0027 tenor of five years slipped 0.27% to 105.80 from 106.09 in two days ago (27 / 1). SUN price series of the 10-year benchmark, namely FR 0031 also fell 0.3% to 116.61 compared with 116.96 the previous day. So did the price of the 0052 FR 20-year tenor, down 0.29% from 106.29 to 105.98.

SUN Price premium

Kim Eng Securities analyst Bonds Dian Abdul Hakim said, investors should be wary of the strengthening U.S. treasury prices. Therefore, these conditions usually lead to profit-taking in our bond market.

"Stability of the rupiah in the range of Rp 9000 - Rp 9020 per U.S. dollar also become an attraction for players to jump into the forex market," he said. As a result, trading stocks and bonds, for the time being abandoned by investors.

Even so, the flow of foreign funds coming into the SUN is still quite heavy. Data from Directorate General of Debt Management (DJPU) shows, as at 27 April 2010, foreign ownership in the SUN reach Rp 146.87 trillion. Number had risen to Rp 14.41 trillion compared to the end of last March, which amounted to Rp 132.46 trillion.

According to Nasution Farid Azhar, Bahana Securities, Fixed Income Sales, cutting the debt ratings of Greece and Portugal, it opened opportunities for foreign investors to park their funds in emerging markets. "So far, the benchmark Asia is Thailand. However, unstable political situations create an opportunity fund to Indonesia to run pretty fast," he explained. Although, the number of credit default swap (CDS) of Indonesia on Tuesday (27/4) and also rose to 171.13 from 155.35 the previous day.

Farid suspect, foreign funds flowing into Indonesia is still going through the first semester of 2010. The reason is, market hopes of Indonesia's debt ratings will improve. Dian added, bought at the market action will continue in the SUN SUN tenor of its length and short tenures. However, local investors should start off slowly SUN, because the price is already more expensive.