The spread on Indonesia’s dollar-denominated corporate bonds has surged to its highest level in six months, driven by traders reacting to the ongoing stock market sell-off.
According to Bloomberg data, the average yield premium on these corporate bonds has climbed to around 144 basis points above U.S. Treasuries as of Tuesday (March 18).
This marks the highest level since September last year, reflecting a sharp 16-basis-point increase in recent months—making it the worst-performing corporate bond spread in Southeast Asia.
The spike coincides with the sharp drop in the Jakarta Composite Index (IHSG), which plunged as much as 6.12% during the first trading session on Tuesday (March 19).
As a result, the stock market downturn is proving to be bad news for traders, who are now shifting away from Indonesian bonds.
