04 November 2024
Paused Rally
Indonesian government bond yields rose again in October 2024 after a previous decline following last month’s rate cut. Bank Indonesia paused further rate cuts in October, responding to three global events that triggered capital outflows from Indonesia, causing the Rupiah to depreciate. Key international factors impacting the domestic bond market include the upcoming U.S. election, China’s economic stimulus, and heightened political tensions in the Middle East. The anticipated U.S. president is expected to impose higher tariffs on imports and increase bond issuance, likely pushing yields up. Rising bond yields in the U.S. have encouraged investors to return to American markets. Meanwhile, China’s economic stimulus has sparked renewed investor optimism, prompting those previously underweight in China to short-cover and reinvest gains from other strong-performing markets. Increased Middle East tensions have created enduring challenges for the global economy. Commodity prices, particularly oil, have risen, and the U.S. dollar has strengthened against global currencies.
Domestically, inflation in Indonesia is decreasing, aided by deflation in volatile goods due to the harvesting season. Bank Indonesia is focusing on stabilizing the Rupiah exchange rate amid a rising Dollar Index (DXY). The yield spread between Indonesian government Rupiah bonds and U.S. Treasuries remains around 250-270 basis points. We anticipate bond yields to be influenced by the U.S. election and the FOMC meeting in November 2024. Historically, the domestic bond market rallies in November and December.
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. |
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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