08 July 2024
Remain Prudent
The bond yields of the US Treasury and IndoGb in June 2024 moved in different directions. The US Treasury yield strengthened, driven by lower inflation and softer job market data. Additionally, the market has projected that the Fed will cut rates this year. However, there is a supply risk in the US budget, which will be announced by the end of July 2024. Consequently, the US Treasury yield is hovering within a relatively narrow range between 4.2% and 4.5%.
In the domestic bond market, investors were concerned about the debt issuance of the incoming government. With many vital projects in the pipeline, the budget deficit could widen beyond the current limit of 3%. This created pressure on bond yields, which remained elevated throughout June 2024. Fortunately, the current finance minister collaborated with the elected government to provide responsive information to calm the market. The debt ratio will remain prudent moving forward, and the main national projects will be implemented gradually. Additionally, the government has signalled the use of SAL (Saldo Anggaran Lebih) as an additional source of funding, thus minimizing the supply risk. The exchange rate of the Rupiah remained under pressure both against USD and Indonesia’s trading partners’ currencies. It led to higher IndoGb yield, presenting an opportunity for investors to add more fixed-income 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.
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