Bond Market Commentary : May 2022

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Bond Market Commentary : May 2022

Energy subsidies


The global markets have been closely observing the US economy which showed a slight decline in inflation followed by a moderate wage growth rate and Personal Consumption Expenditure (PCE). The 2 – years breakeven rate has declined reflecting the expectation on inflation is milder compared to before. Hence, the US Treasury 10 – years yield has been quite stable at 2,75% – 2,95%. Looking at the domestic bonds, outflows from the INDOGB still painted the market most of the time in May 2022. Additionally, there was some big bond maturity in May 2022.

We see two positive reasons why fixed income can be favourable for the months ahead. The government has proposed a plan to add energy subsidies and compensation in facing the elevated oil price. Inflation has been a key issue for many countries and Indonesia needs to anticipate the rising prices amidst the current economic recovery. The government wants to keep the domestic growth momentum alive by keeping the administered prices stable. We think the government has the means to take the step because there is a significant increase in state revenue accompanied by a modest expense increase so far this year. Additionally, the central bank has tried to pull excess liquidity by imposing a higher Reserves Requirement Ratio up to 9% (vs 6,5% previously) by September 2022. The policy is taken in order to maintain Rupiah stability and prevent unnecessarily inflation.

We see either fiscal or monetary policy has been set to prepare inflationary pressure on the domestic economy, which that can be favourable for the Indonesian bonds. Although there might be a hidden risk in 2023, currently we think investors can add more bonds to their overall portfolio.


Rekomendasi Produk


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dan dikategorikan berisiko Rendah – Menengah. Investor memiliki risiko atas Portofolio Obligasi tersebut.


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Pendapat yang diungkapkan dalam artikel adalah untuk tujuan informasi umum saja dan tidak dimaksudkan untuk memberikan saran atau rekomendasi khusus untuk individu atau produk keamanan atau investasi tertentu. Ini hanya dimaksudkan untuk memberikan edukasi tentang industri keuangan. Pandangan yang tercermin dalam konten dapat berubah sewaktu-waktu tanpa pemberitahuan. Seluruh data kinerja dan return investasi yang tertera di artikel ini tidak dapat digunakan sebagai dasar jaminan perhitungan untuk membeli atau menjual suatu efek. Data tersebut merupakan catatan kinerja berdasarkan data historis dan bukan merupakan jaminan atas kinerja suatu efek di masa mendatang. Investasi melalui reksa dana mengandung risiko. Investor wajib membaca dan memahami prospektus sebelum memutuskan untuk berinvestasi melalui reksa dana.

Written by

Willy Gunawan

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