05 August 2024
Gaining Momentum
The fixed-income asset class is gaining momentum, influenced by various factors. On the fiscal front, Indonesia’s Minister of Finance has decided to increase the use of SAL (Saldo Anggaran Lebih) to offset lower projected government revenues for this year. This has reduced domestic supply risk, allowing the government to optimize its debt portfolio while maintaining fiscal sustainability. Meanwhile, the U.S. Treasury’s bond issuance for the upcoming quarters is lower than anticipated, which means bond investors are less likely to demand higher yields.
In terms of monetary policy, the People’s Bank of China lowered both the medium-term lending facility rate and the loan prime rates in July 2024—a rare occurrence for three rates to be adjusted in the same month. At the same time, the Bank of Japan raised its benchmark rate by 15 basis points to control inflation. The U.S. Federal Reserve has kept its benchmark rate steady but signalled a possible cut in September 2024 due to weaker economic conditions. These monetary policies could lead to lower bond yields and stable currencies in emerging markets, including Indonesia.
As a result, Indonesia’s bonds have gained momentum. We have extended the duration of bond funds to take advantage of the declining yield environment. Downside risks appear limited, and investors can benefit from both domestic and global conditions.
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