20/02/2026

BIZ & FINANCE FRIDAY | FEB 20, 2026

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Indonesia bond auction weak but not distressing

Natural rubber demand to exceed output, keeping prices high: ANRPC SINGAPORE: Global demand for natural rubber is projected to exceed production for a sixth straight year in 2026, with accelerating growth in the automotive sector across emerging and advance economies driving consumption, an industry body said. Global production is forecast to grow by 2.4% to reach 15.2 million tons in 2026, following a modest 1.4% increase in 2025, the Association of Natural Rubber Producing Countries (ANRPC) said in an e-mail response to Reuters. “Output growth continues to lag expectations despite improved grower prices since 2025, due to adverse weather, limited replanting of aging trees, persistently low productivity among smallholders after years of depressed prices, and competing land-use changes,” it said. The association added that rubber plantations have also faced an outbreak of major leaf fall diseases that spread across several producing countries and caused significant yield losses that have reached as high as 30%-35% in some areas. Meanwhile, demand growth in China, Europe, and the United States is expected to recover modestly in 2026, it said. This is likely to be driven by rising new vehicle registrations in the EU, stronger tyre shipment projections in the US, the EU-India and America-India trade agreements covering rubber products, and continued government incentives for electric vehicle purchases in China, it added. “Overall demand in 2026 is projected to grow by 1.7% to reach 15.6 million tons,” ANRPC said, adding that demand from the world’s largest consumers of natural rubber, China and India, is forecast to grow by 1.7% and 3.6%, respectively. This is likely to keep global prices firm. Benchmark Tokyo rubber has gained around 3% in 2026 after dropping in 2025. Rubber was one of the biggest gainers in commodities markets in 2024, climbing 46%. “This imbalance between consumption and production is expected to reinforce upward pressure on prices and sustain the structural tightness of the global natural rubber market,” ANRPC said. Output in Thailand, the world’s largest rubber producer, is expected to remain flat in 2026, while Indonesia, the second largest producer, is set to continue its decline since 2022 due to low prices, leaf diseases, and land conversion to oil palm, ANRPC said. Ivory Coast is poised to emerge as the world’s third-largest producer, overtaking Vietnam, due to its sustained expansion of rubber acreage and high productivity of its smallholdings, the body added. – Reuters

positioning although foreign holdings have dipped slightly over the past one week.” The yield on 10-year Indonesian government bonds edged higher to 6.457%, having risen 30 basis points so far this year. The yield differential with the US 10-year Treasury note stood at 233 basis points. The debt was raised across eight tenors, with the bid-to-cover ratio on the benchmark 10-year at 1.7, the lowest level since Indonesia’s influential finance minister Sri Mulyani Indrawati was sacked in early September. “The incoming bid amount was decent, although not as high as those in previous auctions,” said Frances Cheung, head of FX and rates strategy at OCBC. “MoF continued to upsize auctions in line with our expectation, which provides a buffer to financing needs.” Analysts expect foreign investors to remain wary of what comes next after the series of setbacks. “Near term, improved policy clarity and a more coordinated, firm commitment to fiscal discipline are key to underpinning investor confidence,” said Maybank’s Phoon. – Reuters

o Soft demand blamed on holidays, foreign sentiment stable

JAKARTA: A government bond auction in Indonesia – recently rocked by market turmoil – saw somewhat soft demand this week, but that was largely blamed on the Chinese New Year holidays. The result – not exactly calming but not overly concerning – comes after investors have been unnerved by setbacks for Southeast Asia’s biggest economy, putting the bond market and rupiah under the microscope. The setbacks include last month’s warning from index provider MSCI that the equity market risked a downgrade to “frontier” status over transparency issues as well as Moody’s cutting of the country’s credit rating outlook two weeks ago that cited reduced predictability in policy making. Rising concerns over central bank independence after Thomas Djiwandono, a nephew of President Prabowo Subianto, was appointed as deputy governor at Bank Indonesia

have also weighed on sentiment and the rupiah hit a record low of 16,985 per US dollar in January. On yesterday afternoon, the currency was trading at 16,895, 0.1% weaker on the day after Bank Indonesia held rates steady as expected. Indonesia raised a higher-than-targeted 40 trillion rupiah (RM9.4 billion) from its regular bond auction on Wednesday in its first bond offering since Moody’s downgrade. While the total bids marked the lowest in almost a year at 63.06 trillion rupiah, officials and analysts said the Chinese New Year holidays was the reason for the lower demand. Foreigners accounted for about 15% of the total bid wins, an official said. “Foreign sentiment for rupiah bonds has remained largely stable,” said Winson Phoon, regional head of fixed income research at Maybank. “No sign of a drastic change in foreign

A Vietnam Airlines aircraft landing at Noi Bai International Airport in Hanoi. – AFPPIC

Vietnam airlines sign US contracts worth US$36.9b WASHINGTON: Three Vietnamese airlines announced US$36.9 billion (RM145 billion) in purchases on Wednesday, in a series of contracts signed with US aerospace companies. aircraft, and opened discussions for an additional order for around 30 wide-body aircraft in the future, the airline said in a statement. talks this month, but have not reached a final agreement.

Last year, Vietnam, a manufacturing hub in the region, saw a 28% surge in exports to the US – its largest export market – while its trade surplus swelled to US$134 billion, according to official figures. When Trump announced his “Liberation Day” tariffs in April, Vietnam had the third-largest trade surplus with the US of any country after China and Mexico, and was targeted with one of the highest rates in Trump’s tariff blitz. But by July, Hanoi secured a minimum 20% tariff with Washington, down from more than 40%, in return for opening its market to US products including cars. The communist country has long been a success story among Asian economies. It aims to grow its economy by at least 10% this year, and is vying for “middle-income country” status by 2030. – AFP

The agreement creates “a solid foundation for our ambition to become a leading airline by 2030”, the carrier’s chairman Dang Ngoc Hoa said in the statement. Low-cost carrier Vietjet Air also announced two contracts, totalling US$6.3 billion. Of that, about US$5.4 billion will go toward supplies and maintenance of engines for 44 Airbus A320 series aircrafts by US manufacturer Pratt & Whitney. Around US$960 million remaining will go towards leasing six Boeing 737 series aircraft from Griffin Global Asset Management. The signing took place on the sidelines of Vietnamese leader To Lam’s visit to Washington, where he is expected to join the inaugural meeting of US President Donald Trump’s “Board of Peace.” The two countries held a sixth round of trade

The agreements come as Hanoi and Washington continue trade negotiations on US tariffs on Vietnamese products, currently set at 20%. The Southeast Asian nation posted 8% growth last year despite the new US tariffs, defying expectations when many feared the collapse of its export-driven growth model. Fledgling airline Sun PhuQuoc Airways said on Wednesday it placed an order for 40 of Boeing’s 787 Dreamliners, a long-haul aircraft, with an estimated total value of US$22.5 billion. Founded just a year ago, the airline said in a statement that the purchase “reflects Sun PhuQuoc Airways’ strategic ambition to build a truly intercontinental network”. National carrier Vietnam Airlines placed an US$8.1 billion order for around 50 Boeing 737-8

Google and Sea to develop AI tools for e-commerce, gaming SINGAPORE: Alphabet Inc’s Google and

by consultancy Momentum Works. Google and Sea’s gaming unit Garena will also use AI solutions to “transform” the productivity of game development, both companies said. The partnerships follow a 2024 tie-up between Shopee and Alphabet’s YouTube in the Southeast Asian e-commerce market. – Reuters

China’s Alibaba, whose Lazada e-commerce platform competes with Shopee in Southeast Asia, released a new AI model earlier this week that it described as being built “for the agentic AI era.” Shopee is the most dominant e-commerce platform in Southeast Asia with a 52% market share in 2024, according to a report

prototype” on Sea’s e-commerce platform Shopee, they said in a statement. The move is part of the efforts by global tech firms to monetise their AI models by promoting capabilities beyond simply answering questions and executing a much wider range of tasks from shopping on different apps to managing complex workflows.

Southeast Asian technology conglomerate Sea Ltd announced a new tie-up yesterday that will develop artificial intelligence tools for Sea’s e-commerce and gaming products. Under the newly-signed strategic partnership, the two companies will jointly “explore the building of an AI agentic shopping