Highlight Monthly Commentary - December 2021

10/01/2022
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Macroeconomics

Indonesia November trade surplus recorded at USD3.5bn vs USD5.7bn in October. A lower MoM surplus was attributed to higher import that jumped 52.6%YoY. 11M21 budget realization showed a higher revenue and lower deficit. Total revenue accelerated by +19.4%YoY, reflecting robust economic rebound, with income tax +15.1% and VAT +19.8%. Bank of Indonesia maintained the policy rate unchanged at 3.5% for the 10th consecutive month.

Equity

JCI increased by 0.7%MoM with around Rp 1.4tn net foreign buy in all market. Relaxation of mobility and solid 3Q21 earnings results were boosters to the index. However, the index fell after the discovery of omicron and government’s move to extend overseas travel quarantines. The best performing sector was IDXEnergy (+8.9%) on elevated coal price during this winter season.

The global market experienced a yearend rally despite rising covid cases. The consumer spending was resilient during the holiday season and investors’ mood was lifted as omicron variant was not as severe as concerned before. The Bank of England raised policy rate from 0.1% to 0.25%. People's Bank of China announced reserve requirement ratio cut to boost growth amid the pandemic.

Fixed Income

Indonesia 10 years government bond yield rose 28bps to 6.38% compared to the previous month. In comparison, the US 10-year treasury note increased by 6.4bps to 1.514%. %. The Fed chairman sent a hawkish tone with potential faster tapering amid the discovery of new covid19 variant. Based on DMO bond flow data as of 29 December, foreign ownership in bond accounted for 19.8% of total outstanding. The foreign investors posted an outflow of Rp24.4tn or Rp79.9tn YTD. Indonesia 10 years USD global bond yield at 2.15%. IDR appreciated by 0.45% MoM vs USD to 14,250.

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This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can goes down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable, but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change.  PT Schroder Investment Management Indonesia, 30th Floor IDX Building Tower 1, Jl. Jend. Sudirman Kav 52-53, Jakarta 12190, Indonesia. PT Schroder Investment Management Indonesia is authorised as Investment Manager and supervised by Indonesia Financial Services Authority (OJK).

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DISCLAIMER

INVESTMENT IN MUTUAL FUND INVOLVES RISK. PRIOR TO DECIDING TO INVEST, PROSPECTIVE INVESTORS MUST READ AND UNDERSTAND THE FUND PROSPECTUS. PAST PERFORMANCE DOES NOT GUARANTEE / INDICATE FUTURE PERFORMANCE.

The views and opinions contained herein are those of the author(s) on this page and are not necessarily represent views expressed or reflected in other Schroders’ communications, strategies or products. This material is intended to be for information purposes only and is not intended as promotional material in any respector offer or solicitation for the purchase or sale of any financial instrument. This material is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations [and also may not be circulated, published, reproduced or distributed to any other person without our prior written consent]. Reliance should not be placed on the views and information in this material when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can goes down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Some information quoted herein was obtained from external sources we consider to be reliable. Information herein is believed to be reliable, but Schroders does not warrant its completeness or accuracy. No responsibility both directly and indirectly can be accepted for errors of fact obtained from third parties or negligence of or loss resulting from the use of this material. The data disclosed in this material may change according to market conditions. If any regions/sectors are shown in this material, such data is for illustrative purposes only and should not be viewed as a recommendation to buy/sell. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know and include some forecasted views. However, there is no guarantee that any forecasts or opinions disclosed in this material will be realised. These views and opinions herein are our current views and may change without notice. Nevertheless, this disclaimer does not exclude any duty or liability that Schroders has to its customers under the prevailing laws and regulations in the Republic of Indonesia. PT Schroder Investment Management Indonesia, 30th Floor Indonesia Stock Exchange Building Tower 1, Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190, Indonesia. PT Schroder Investment Management Indonesia as an Investment Manager is licensed and supervised by the Indonesian Financial Services Authority (OJK).

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