Equity Market Commentary : June 2023

Paused Hike (Global Equity Market)

The US Central Bank, The Fed, paused the rate hike for the first time in the June FOMC meeting. The benchmark rate was held at 5.25% in June 2023, the same as the previous month. The Fed has continuously raised the Fed rate since March 2022 in each of its 10 meetings. The increase of each rate hike varied from 25, 50 and up to 75 bps. It is quite a substantial increase in the rate from the lowest at 0.25% in early 2022 to 5.25% in this cycle of rate hikes, surpassing the previous rate peak at 2.5%. The markets have predicted that the current rate is almost at its peak and the Fed can only reduce the rate in the coming year. Besides the Fed, the China Central Bank PBOC also changed its policy rate by lowering 10 bps of loan prime rate 1 year and 5 years to 3.6% and 4.2%, respectively, for the first time since last year August.

The stock market seems to be primarily influenced by recessionary shadows, technology stocks, and the election cycle. It wasn’t too long ago that the majority of analysts call for a significant US recession in 2023 or 2024. Now, those calls are shifting toward a softer tone but downside discussions aren’t going away altogether. The S&P 500 has been driven by a handful of the largest-cap tech stocks (approximately 90% of all stock market returns in 2023) and without the stocks the index is barely positive. For this rally to continue, it has to broaden out to include more than just the biggest tech stocks. Technology stocks can be expensive based on valuation, but it’s a sector where investors can find growth if the economy slows. Additionally, the large-cap tech companies don’t need help financing their business based on the cash flow they have which is a big advantage for these companies. Lastly, the best year of the four-year presidential cycle is usually the third year, which is where the US stands in 2023. Hence, we think domestic investors should add more global portfolios in the current situation.

More to Spend (Domestic Equity Market)

In June 2023, two central banks changed their policy stance. The US Central Bank has paused the rate hike after raising 5% continuously since March 2022 in each of the meetings. The Fed rate stayed at 5.25%, the same as the previous meeting in May 2023. Meanwhile, China Central Bank, PBOC, cut 10 bps of the loan prime rate 1 year and 5 years to 3.6% and 4.2%, respectively, for the first time since last year August. The monetary change of two major countries definitely resulted from the development of the economic situation. The US economy is probably heading to a soft landing with the recession in the shadow, while China’s economy needs more stimulus to warmer the engine of growth that is still running slower than expected. From the global perspective, we see monetary policy provides room for the economy to stay nimble. So does the Bank Indonesia too that hold policy rate at 5.75% since January 2023.

The domestic economy made a comeback in June 2023 with strong PMI Manufacturing at 52,5 (vs 50.3 in May 2023) and declining inflation at 3.5% (vs 4% in May 2023). The inflation is the lowest in the last 14 months and within the BI target of 3% ± 1%. Fiscal budget 5M23 recorded a surplus of Rp 204.3 trillion or 0.97% of GDP (vs 5M22 at Rp 132,0 trillion or 0.67% of GDP). The state revenue has reached 49% of the budget target, while expenditure is only 33%. Hence, there is still 2/3 of the annual budget 2023 that can be poured into the economy. Although the budget deficit is likely to be lower than the target (-2.8% of GDP), we think the expenditure is quite massive support for the economy, eventually to the stocks. We might see profit margin expansion in the consumer sector due to lower energy and raw material price. Some retail stocks are also gaining traction from sales during public holidays, school holidays and store expansion. We need more companies to book better income and strong balance sheets (besides the bank sector) in order to expect JCI to exceed 7000.

Rekomendasi Produk

PRODUK
MGSED	Reksa Dana MGSED berinvestasi pada Efek Ekuitas Syariah Luar Negeri di dalam Daftar Efek Syariah. Dengan segmen Jangka Panjang, dan dikategorikan berisiko tinggi. Investor memiliki risiko atas portofolio saham tersebut.
MITRA	Reksa Dana MITRA berinvestasi pada saham domestik mayoritas saham Big Cap. Dengan segmen Jangka Panjang, dan dikategorikan berisiko tinggi. Investor memiliki risiko atas portofolio saham tersebut.
MICB	Reksa Dana Mandiri Investa Cerdas Bangsa berinvestasi mayoritas pada saham yang termasuk dalam indeks LQ45. Dengan segmen Jangka Panjang, dan dikategorikan berisiko tinggi. Investor memiliki risiko atas portofolio saham tersebut.
MANFIGA	Reksa Dana Indeks MANFIGA berinvestasi mayoritas pada saham yang terdapat di dalam Indeks FTSE Indonesia ESG. Dengan segmen Jangka Panjang, dan dikategorikan berisiko tinggi. Investor memiliki risiko atas portofolio saham tersebut.

Info Lebih Lanjut

Hubungi Mandiri Investasi – (021) 526 3505
Whatsapp Mandiri Investasi – 0816 86 0003
Email Mandiri Investasi – [email protected]
Mandiri Investasi – www.mandiri-investasi.co.id
Moinves – www.moinves.co.id

DISCLAIMER

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.

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