1 years ago
Summer Rally (Global Equity Market)
The equity market is cheering on better global growth during the summer. The US economy indicates improving conditions where inflation declines further with a resilient job market. The Fed raised another 25 bps of its benchmark rate to send an affirmation of policy consistency. Investors see the peak of the rate hike cycle is eventually close. The anxiety of recession in the US has faded and a soft landing in the economy is more likely to happen. IMF releases the latest economic growth projection of 3.0% yoy in 2023, a 0,2% upgrade from the previous publication in April 2023. The revised number is driven by better economic growth in advanced countries such as the US, UK, Spain, Italy and Canada as well as emerging markets like India, Russia, Brazil, Mexico and South Africa. The released economic growth numbers in 2023 and 2024 indicate no recession in the near time.
Knowing the fear of recession has been anticipated by many stakeholders, investors are more risk-on than before. Major indexes performed well in July 2023 and the volatility index (VIX) has been quite low under 15 for the last two months. We think the diverse portfolio can support investors to benefit in case of strong pullback due to the declining job market which is one of the main focuses of the Fed. But, for the time being, we think investors can enjoy the current positive ride.
Blooming (Domestic Equity Market)
In July 2023, the domestic economy was becoming stronger with higher PMI Manufacturing (53.3 in Jul23 vs 52.5 in Jun23) and lower inflation (3.1% yoy in Jul23 vs 3.5% yoy in Jun23). Increasing demands and output as well as lower input costs are a solid backbone to expect a better economic condition in the early second semester of 2023. A conducive domestic environment raised the number of tourists in June 2023 to 1.06 million people, although not the same as pre-covid at above 1.5 million people but speedy tourism recovery is very encouraging for the domestic economy. On the other side, total investment in the second quarter of 2023 reached Rp 349.8 trillion, which increased 15.7% yoy where domestic direct investment up 17.6% yoy to Rp 163.5 trillion and foreign direct investment rose 14.1% yoy to Rp 186.3 trillion. The initial investment in 2Q23 was larger outside Java (52%) than in Java (48%).
We see small and medium stocks performed well in July 2023 suggesting investors are gaining more traction on broader sectors. JCI is narrowing to 7.000 by the end of July 2023 from 6.700 in the early month. We are still optimistic JCI can reach our target of 7.400 driven by the banking, automotive, telco and consumer sector. The commodity sector can be the pullback factor for the index but having some stocks from the sector can benefit if short-term rebound.
Product Recommendation
| PRODUK | |
|---|---|
| MGSED | MGSED invests in Sharia-compliant Equities Abroad listed in the Sharia Securities List. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| MITRA | MITRA invests in majority domestic stocks, with a focus on Big Cap stocks. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| MICB | MICB primarily invests in stocks included in the LQ45 index. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| MANFIGA | MANFIGA primarily invests in stocks included in the FTSE Indonesia ESG Index. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
For More Information
Contact Mandiri Investasi – (021) 526 3505
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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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