In July, Indonesian bond market continued its bullish trend that has been started in April. INDOGB 10-year yield declined from June closing at 6.63% to 6.57% (end of July). The bullish trend in the bond market were backed by lower BI Rate on 15 July, slowing inflation rate, de-escalation of geopolitical tension in Mid-East, improving Indonesia risk perception and jumbo liquidity in IDR bond market. The downside risk was from the development of the U.S. import tariffs. That said, Indonesia has been looking at increasing stabilisation with US tariff deal, which puts the country at 19% compared to the previous 32%. The US seems to also be pushing for a weaker USD and stronger IDR, which caused domestic currency trajectory to be strengthening to flattish or in other words, limited further currencies downside risks. Globally, we are also seeing many countries beginning to finish up their deals with the US, and Trump seems to be softening also to China, narrowing the risk of another all-out trade war. The improvement in risk perception can be seen in narrowing CDS spread in July.

Market liquidity has also been good in July as there were more than IDR150 tn matured government bond in June. There is also an expectation of higher liquidity in August-October, as there are scheduled maturing govies with total value more than IDR70tn/month.

The improving of Indonesia risk perception can be seen from narrowing Indonesian risk premium from 240 bps to 219 bps and lowering CDS 5-year from 77.98 bps to 72.45 bps. This is due to lower the U.S. rating by Moody’s to AA+ from top notch, and better Indonesia macroeconomic condition, healthy fiscal budget as well as strong Bank Indonesia’s international reserves. As a result, foreign investors were net buy in July of IDR13.28 tn in Government bonds hence totalling net buy of IDR55.32 tn in YTD 2025.

 

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.

 

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Contact Mandiri Investasi – (021) 526 3505
Mandiri Investasi Email – [email protected]
Mandiri Investasi Website – www.mandiri-investasi.co.id

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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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