Highlight Monthly Commentary - June 2021

08/07/2021
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Macroeconomics

June inflation was booked at 1.33% YoY where on a monthly basis inflation was booked at -0.16% MoM, implying deflation, due to high base effect on food inflation post Lebaran festive season. May trade balance remained positive at USD2.4bn driven by strong commodities exports. Budget deficit reached 1.32% of GDP as of May. Forex reserve rose to USD137.1bn in June while Bank Indonesia maintained its policy rate at 3.50% during the month.

Equity

JCI index remained volatile in June with a flattish return of 0.6% MoM. Foreign investors posted inflow of USD344mn in June. The market faced pressure from the Fed’s hawkish statements after the US released May inflation data of about 5%. Meanwhile, resurgence of COVID-19 in Indonesia at new records also posed volatility. Despite so, foreign investors still posted inflow while retail investors also flocked back into the equity market and supported the index.

Global equity market posted mixed returns in May. The US market mostly recorded positive returns on the back of improving market data as well as President Biden reaching agreement with bipartisan senators on the USD579bn infrastructure stimulus. The European also posted positive return as economy reopens while vaccination in the EU is progressing fast. The Asian markets were under pressure due to new wave of COVID-19 which prompted stricter mobility restrictions in many countries in the region.

Fixed Income

Fixed Income market’s performance was negative in June as the 10-year government bond yield rose from 6.43% to 6.56%. The bond market posted foreign inflow of USD1.3bn in June. We continued to see foreign inflows and improving auction demand during the month. However, the new COVID-19 wave in Indonesia caused pressure to the market along with the Fed’s recent hawkish statement. Meanwhile, the US Treasury yield fell to 1.47% while the INDON31 yield closed at 2.08%.

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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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