Bond Market Commentary : April 2022

  • icon-jam20 May 2022
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Bond Market Commentary : April 2022

Inflation is rising


The benchmark yield of the Indonesia government 10-year bond increased another 25 bps in April, almost the same as in March for 24 bps. Compared to US Treasury 10-year bond yield that jumped almost 60bps, the correction INDOGB yield was relative milder as the domestic economy stands at better fundamental. Although currently is still below 3%, it is projected that going forward the Indonesia inflation rate should be substantially higher because of several reasons: 1. Recovering economic activities will increase money velocity; 2. The price increase pass-through from producers to consumers, given that producers now face rising input prices; 3. The impact of the VAT increase; and 4. Increasing administered prices (fuel, electricity, and LPG). On the other hand, the government revenue is on solid growth of 32% YoY 1Q22 as the domestic recovery continued to improve. Meanwhile, the government expenditure contracted by -10% YoY in 1Q22. However, the subsidy continued to surge reaching 80% YoY in 1Q22. As we all know the oil price jumped significantly, followed by rising fuel demand amid mobility recovery. Overall, the fiscal balance is still surplus until March and net bond issuance has dropped by 60% in 1Q22. We still think the fiscal deficit will remain below the targeted budget -4.9% of GDP due to the substantial windfall revenue amid high commodity prices and the large contingency fund government currently owns. Therefore, the government can have enough budget to spend without issuing more bonds. On the other hand, IDR corporate bond issuances grew 69.7% reaching Rp 38.7 trillion in 1Q22. The low-interest-rate environment, utilization of the remaining bond program facilities and corporations’ need for funding to expand their business and for refinancing are mostly the reasons to support the corporate bond issuances. We still think the fixed income asset class can make the comeback when the global policy changes much clearer in the second half of the year.


Rekomendasi Produk


MIDU Reksa Dana MIDU berinvestasi pada Instrumen Obligasi dengan segmen Jangka Menengah
dan dikategorikan berisiko Rendah – Menengah. Investor memiliki risiko atas Portofolio Obligasi tersebut.


Info Lebih Lanjut

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Whatsapp Mandiri Investasi – 0816 86 0003
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Pendapat yang diungkapkan dalam artikel adalah untuk tujuan informasi umum saja dan tidak dimaksudkan untuk memberikan saran atau rekomendasi khusus untuk individu atau produk keamanan atau investasi tertentu. Ini hanya dimaksudkan untuk memberikan edukasi tentang industri keuangan. Pandangan yang tercermin dalam konten dapat berubah sewaktu-waktu tanpa pemberitahuan. Seluruh data kinerja dan return investasi yang tertera di artikel ini tidak dapat digunakan sebagai dasar jaminan perhitungan untuk membeli atau menjual suatu efek. Data tersebut merupakan catatan kinerja berdasarkan data historis dan bukan merupakan jaminan atas kinerja suatu efek di masa mendatang. Investasi melalui reksa dana mengandung risiko. Investor wajib membaca dan memahami prospektus sebelum memutuskan untuk berinvestasi melalui reksa dana.

Written by

Willy Gunawan

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