• bond market

    • bond market
    • bond market
      • February-2023: The Outlook for The Bond Market is Stable Amidst The Uncertainty
        We expect the government bond market to perform stably through the end of the first half of 2023. Domestic demand is strong, with government bonds becoming a more attractive option than other investments amid the current uncertainty. In addition, we expect foreign capital will enter, considering higher yields and the sovereign rating to be reaffirmed at investment grade. In addition, we expect the current account surplus will last into 1H2023, supporting the rupiah to remain stable. However, the market will still face high volatility amidst the transitional uncertainties in the world's growth prospects. Developed countries are still facing stubborn inflation rates to fall. Despite the slowdown, the percentage is still far above the target amid the tight labor market. Even though interest rate increases will likely be milder, the market is waiting for when the central bank will start to reverse its monetary policy. Turmoil in the banking sector in developed countries and the protracted geopolitical crisis will also be watched out for in the future. More detail ...
      • December-2022: Starting in 2023: Where will The Bonds Market be Headed in The First Quarter?
        We expect the domestic bond market to face continued volatility in the first quarter of 2023. While we hope for positive foreign capital inflows for FY2023, their flows are expected to remain volatile as central banks in advanced economies still show a willingness to raise interest rates, although at a milder level, due to lingering inflationary pressures. Thus, the latest trend on the economic data released in 1Q2023 will significantly determine when they will raise interest rates again and how long they will hold high-interest rates. Thus, market participants will be looking forward to it to formulate an investment strategy. As a result, we don't expect them to take long positions yet. And the latest capital inflows at least illustrate where foreigners are hunting for short-term tenors and selling long-term tenors. Even though the market will still be volatile, we expect a subdued performance in the government bond market at the beginning of the year. Attractive pricing and solid domestic demand will underpin performance. Unfortunately, we saw a risk to performance earlier this year. In addition to volatile foreign flows, the market will face supply risks due to the front-loading strategy and high supply. More detail ...
      • October-2022: Successfully Maintaining Performance in a Volatile Market
        We believe the domestic bond market will continue to maintain its performance during a volatile market. We see inflation lower than anticipated and lower than in developed economies prompting central banks to avoid aggressive monetary tightening. In addition, the trade balance surplus - and also because the domestic stock market remains attractive as the economy recovers more strongly - reduces translational risk pressure from foreign investment outflows in the bond market. Then the solid domestic demand supported the market performance, significantly offsetting the correction during investors relinquishing their holdings. More detail ...
      • August-2022: Positive Amidst The Investment Cycle Shift
        Higher yields are inevitable as monetary normalization towards a tighter direction is not over yet. In addition, policy normalization has also been continuing in the domestic market, with most recently, the central bank raising policy rates. We expect translation risk to remain low considering the central bank's strong commitment to maintaining stability and the trade balance surplus. More detail ...
      • June-2022: Banking Outlook in 2022: Continuing Gradual Recovery Trend
        We are of the view that the banking growth prospect will be selective. Higher tier banks will still benefit from the stronger ability in deposit collection, lower-cost funding, and higher loss provision, enabling them to be significantly more competitive. However, given that the economic recovery is more in a gradual fashion, the number of quality debtors has not recovered to the pre-pandemic level, meaning that the number of loan takeovers will still be high. This also means that growth in stronger banks comes at the expense of business contraction in other banks and will also affect their profitability. More detail ...
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