13 March 2024
Stability
February 2024 marked a period of stability for INDOGB yields, attributed to several factors. The smooth conduct of the 2024 election instilled confidence in the market, portraying Indonesia as one of the world’s largest democratic nations. Simultaneously, the election signified a change in leadership with a new president and government. Bondholders are keen to observe how the incoming administration will structure the budget to accommodate the expenses associated with the electoral process. While it’s premature to project the 2025 state budget, indications suggest a higher budget deficit, exceeding the 1.6% of GDP recorded in the 2024 budget. We believe that an expanded budget deficit is acceptable, provided it is directed towards productive and growth-oriented initiatives.
Furthermore, the escalation in rice prices in February 2024 has led to a slight increase in inflation compared to the previous month, impacting real yields. However, this surge in rice prices is anticipated to be temporary, given the approaching harvesting season. The government has proactively responded to the situation by augmenting inventories in the central market.
Anticipating challenges from the global market, particularly the US Central Bank (The Fed), which is expected to maintain higher rates for an extended period to curb inflation and address fluctuating employment data, there could be implications for the Rupiah’s exchange rate. In such a scenario, Bank Indonesia may need to closely monitor and potentially adjust its monetary policy. Upholding stability remains the paramount objective for Bank Indonesia, and as of February 2024, the Rupiah exchange rate has remained stable. We believe that every correction in bond yields presents an opportunity to augment holdings in bond assets.
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. |
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