07 October 2024
Sunny Day
The U.S. Central Bank has made a surprise move by cutting the policy rate by 50 basis points to 5.00%. This reduction is seen as a positive step by investors to prevent the economy from slipping into a recession. The Fed appears to have front-loaded the rate cut to ensure the policy change has a more immediate impact on the economy. Despite the overall economic slowdown, the situation is not considered alarming. In another unexpected move, Bank Indonesia also initiated a rate cut by 25 bps to 6% a day before the Fed’s decision. This has been viewed positively by the market, as it aims to stimulate the economy. The move is timely, given that the Rupiah has strengthened, while PMI Manufacturing has weakened, and inflation remains subdued. It is likely that Bank Indonesia will implement further rate cuts in the coming months.
The domestic bond market responded favourably to these shifts in monetary policy. The yield on Indonesian Government Bonds (IndoGB) has returned to 6.4%, the same level as at the beginning of the year. We anticipate bond yields will remain stable, as SRBI rates are expected to continue declining and SRBI issuance volumes are lower. The yield spread between IndoGB and U.S. Treasuries is currently within the 250-280 basis points range. Given the global trend of lower yields and declining inflation, we believe Indonesian bonds remain competitive compared to other emerging market bonds.
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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