04 January 2024
Satisfying Ending
Bond yield movement in 2023 has been volatile around the globe due to peaking interest rates in combating inflation. At the end of 2022, most economists expected the US Federal Reserve would be spending 2023 facing a recession while fighting against the biggest wave of inflation for a generation. Instead, the US has achieved the strongest growth of any large economy, unemployment is close to record lows, and price pressures are showing signs of creeping back to the central bank’s target of 2 per cent. At the most recent rate–setting meeting, the Fed released its latest data showing that officials expect the central bank to cuts its benchmark federal funds rate by 75 basis points over the coming 12 months from currently at a 22-year high of between 5.25% and 5.5%. Baked into the forecasts from the Federal Open Market Committee is a belief that the US economy will achieve its soft landing, with inflation returning to the Fed’s goal, growth slowing only mildly and unemployment still reasonably low.
Bank Indonesia has successfully stabilized the exchange rate of the Rupiah by raising 50 bps BI rate (newly named benchmark rate, no more BI 7D RRR) throughout the year 2023 to 6.00%. The average domestic inflation in 2023 was 3.7%, hence the real rate is 2.3%. Meanwhile, the IndoGb yield offered 6.7%-6.5%, hence real yield could still offer 2.8%-3%. The spread of US Treasury yield and IndoGb yield hovered around 200 – 230 bps which is a new normal than the previous spread above 300bps. The foreign ownership of IndoGb remains low at 15% and domestic institutions dominate the overall bond ownership. In 2024, IndoGb yield can be lower to 5.75%-6.25% on the back of the easing monetary policy and expected declining US Treasury yield.
Product Recommendation
| PRODUK | |
|---|---|
| MIDU | MIDU invests in Bond Instruments with a Medium-Term segment and is categorized as low to medium risk. Investors bear the risk associated with the Bond Portfolio. |
| IDAMAN | IDAMAN invests in Indonesian Government USD Bonds with a short duration and is categorized as medium risk. Investors bear the risk associated with the Bond Portfolio. |
| MIDO2 |
MIDO2 invests in Indonesian Government Rupiah Bonds with a long duration and is categorized as high risk. Investors bear the risk associated with the Bond Portfolio. |
For More Information
Contact Mandiri Investasi – (021) 526 3505
Mandiri Investasi Whatsapp – 0816 86 0003
Mandiri Investasi Email – [email protected]
Mandiri Investasi Website – www.mandiri-investasi.co.id
Moinves Website – www.moinves.co.id
DISCLAIMER
The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for individuals or specific mutual fund or investment products. It is intended solely to provide education about the financial industry. Views reflected in the content may change at any time without notice. All performance data and investment returns mentioned in this article cannot be used as a basis for calculation to buy or sell a mutual fund. This data is performance records based on historical data and is not a guarantee of future mutual fund performance. Investment through mutual funds carries risks. Investors are required to read and understand the prospectus before deciding to invest through mutual funds.
Written by
Leave a Reply