02 January 2025
Balancing Policy
The Federal Reserve delivered a hawkish rate cut in December 2024, signaling that 2025 would likely see only 50 basis points of rate reductions, lower than the previously expected 100 basis points. This announcement pushed the U.S. Treasury bond yield to 4.6%, while the DXY index climbed to 108. The elevated expectations for U.S. Fed rates and Treasury yields continued to influence domestic monetary conditions. Bank Indonesia (BI) held its BI Rate steady at 6.00% for the third consecutive month.
In preparation for 2025, BI and the Ministry of Finance scheduled a meeting to finalize bond issuance targets and the monetary framework. While details are still forthcoming, BI announced plans to purchase government bonds on the secondary market, with the potential total amount reaching Rp 150 trillion. By mid-December, BI had already purchased Rp 113 trillion worth of government bonds, including in the secondary market. Retail investors were the second-largest net buyers at Rp 104 trillion, followed by insurance and pension funds at Rp 98 trillion. Conversely, banks recorded a net sell of Rp 44 trillion throughout 2024.
Given the current high yields on Indonesian government bonds (IndoGB) exceeding 7%, we view this as an opportune moment for investors to accumulate bonds. As demonstrated in 2024, market narratives can shift rapidly, and the outlook for 2025 could bring significant changes.
Product Recommendation
| FIXED INCOME FUND | |
|---|---|
| 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. |
| BALANCED FUND | |
| MIA | MIA invests in Equities, Bonds and Money Market with Medium Term and categorized Medium Risk. Investors bear the risk associated with the equity portfolio. |
| MISB | MISB invests in Sharia Equities, Sukuk and Money Market Sharia with Medium Term and categorized Medium Risk. Investors bear the risk associated with the equity 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.
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