10 June 2024
Cautious stance
In May 2024, the global and Indonesian bond markets exhibited trends reflecting the broader economic environment, central bank policies, and investor sentiment. The global bond market in May 2024 was marked by fluctuations influenced by differing economic conditions across major economies. Central banks in developed countries maintained diverse monetary policies in response to their specific economic landscapes. The Federal Reserve in the United States continued its cautious stance, balancing efforts to control inflation with the need to support economic growth. This approach resulted in stable U.S. Treasury yields, which remained attractive to investors seeking safe-haven assets amid global uncertainties. In Europe, the European Central Bank (ECB) faced mounting pressure to implement stimulus measures to counter sluggish economic performance. The mixed economic indicators across the Eurozone led to varied bond yields, with southern European countries experiencing higher yields due to perceived higher risks. Conversely, bonds from countries like Germany remained low-yielding but stable. Emerging markets presented a varied picture, with bond yields influenced by local economic conditions and investor sentiment towards risk. Some emerging market central banks, particularly in Latin America and Asia, grappled with currency volatility and inflationary pressures, which influenced their monetary policy decisions and subsequently, bond yields. Investors sought higher yields in these markets, although they remained cautious about geopolitical risks and economic instability.
The Indonesian bond market in May 2024 reflected the country’s economic resilience and positive investor sentiment. Inflation was controlled, although concerns about rising energy prices persisted. The relative stability of the Indonesian Rupiah against major currencies also contributed to favourable conditions for the bond market. Yields on government bonds remained competitive, offering attractive returns in a low-interest-rate global environment. The successful issuance of various tenors of SBN highlighted the strong demand and positive outlook for Indonesia’s economic prospects. The corporate bond market in Indonesia also showed positive momentum. Investor appetite for corporate bonds was strong, driven by the search for higher yields compared to government securities. The performance of corporate bonds was underpinned by solid corporate earnings and optimistic economic forecasts. We see the short funds can benefit investors amidst current market volatility.
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
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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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