Market Outlook 2023 : Indonesia's Strong Economic Fundamentals

Mandiri Investment Management is optimistic that with proper management strategies, investors can optimize returns across various asset classes this year.

Jakarta, March 16, 2023 – The government’s commitment to implementing downstreaming programs, particularly in the mineral mining sector, is believed to be able to support domestic industry growth in the future. The government’s plan to increase the value-added of domestic products is a manifestation of sustainable development, after President Joko Widodo’s administration previously built various infrastructure projects spanning from Sumatra to Papua.

“The downstreaming program has an extraordinary impact as well as the digitization program which has an extraordinary impact in terms of efficiency and the promotion of micro, small and medium enterprises (MSMEs) which are the backbone of Indonesia’s economy,” said Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, when opening the Mandiri Investment Market Outlook 2023 event.

Luhut said that in 2023, Indonesia still needs to complete development from various aspects. At the beginning of this year, one of the policies issued was incentives for electric cars and motorcycles to encourage the transition to electric-based transportation and build an electric vehicle ecosystem in Indonesia. This policy is one of the government’s plans to build an industry from upstream to downstream so that it can increase income and job opportunities in Indonesia. It also aims to improve the quality of education in remote areas so that Indonesia’s economy becomes balanced between Java and non-Java.

“Through the Market Outlook 2023 event held by Mandiri Investment, I hope we can continue to participate and encourage investment through the capital market sector in Indonesia. I hope that in the future, Mandiri Investment’s role in growing the investor base in the capital market can be further enhanced to support the stability and economic growth of Indonesia,” emphasized Luhut.

Echoing the government’s hopes, President Director of PT Bank Mandiri Tbk, Darmawan Junaidi, said that Bank Mandiri and all its subsidiaries, including Mandiri Investment, consistently conduct evaluations and studies related to macroeconomic dynamics so that they can implement strategic policies to support Indonesia’s economic recovery and growth together.

“We hope that through the Market Outlook event held by Mandiri Investment today, we can gain insights so that we can determine the right investment strategies in the midst of increasingly dynamic global conditions. Of course, Mandiri Investment, as one of the largest investment managers in Indonesia, is expected to assist with investment management,” said Darmawan.

Management of PT Mandiri Manajemen Investasi is very optimistic that Indonesia can become an attractive place to invest. Last year, Indonesia was able to record a direct investment increase of 44.2% YoY or IDR 654 trillion (USD 45.6 billion). The high interest of foreign investors is due to the well-established economic structure through the hard work of the government and various elements in society, enabling Indonesia to overcome various difficulties.

“We are optimistic that Indonesia can continue to grow this year, with GDP growth ranging from 4.70% – 4.90% YoY, and the target IHSG in 2023 can grow above 7,400, bond yields are around 7.00%, and the exchange rate of the Rupiah remains stable,” said Aliyahdin Saugi, CEO of PT Mandiri Manajemen Investasi.

Aliyahdin, who is familiarly called Adi, sees the positive condition in the macroeconomic sector as believed to be in line with investment opportunities and increasing returns in the capital market sector. Indonesia’s capital market, ranging from the stock exchange, debt securities/bonds, to mutual funds, still has enormous growth opportunities. Moreover, the condition of Indonesia’s stock exchange, during the pandemic until now, is still in the consolidation phase, reflected from the lack of reflection of the movement of stock prices of various issuers that recorded an increase in performance and profits in 2021-2022, which is undervalued.

In the bond/debt securities asset class, the trade balance recording a surplus and the strengthening of the government’s budget can support the performance of bonds. Likewise, the increase in the benchmark interest rate of Bank Indonesia (BI) will not change the course of development, which is currently in a good position and can provide higher returns for investors in the money market.

“As one of the largest investment managers in Indonesia and also part of the Mandiri Group, Mandiri Investasi always strives to provide investment solutions through investment products that we manage, from conventional mutual funds to alternative investment products. And, at the beginning of this March, we launched an ETF product to add investment product options. We sincerely hope that Mandiri Investasi can always be a leading and trustworthy investment partner,” concluded Adi.

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