Highlight Monthly Commentary - March 2021

09/04/2021
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Macroeconomics

March inflation was booked at 1.37% YoY where on a monthly inflation was booked at 0.08% MoM a slowdown due to lower car price as the government introduced tax incentives to the auto sector. February trade balance remained positive at USD2.0bn driven by iron and steel exports to China. Budget deficit reached 0.36% of GDP as of February. Forex reserve rose to USD138.8bn in February while Bank Indonesia maintained its policy rate at 3.50% during the month.

Equity

JCI index turned volatile in March with a return of -4.1% MoM. Foreign investors posted outflow of USD185mn in March. Overall, global investors turned jittery on the back of rising global inflation and US Treasury yield while local retail investors were taking profits. Investors were also concerned on the resurgence of COVID-19 cases in Europe. Domestically, the government has been pushing for more stimulus to help boost middle class spending while vaccination seems to be progressing well.

Global equity market reported mixed performances. The US and Europe performed well driven by vaccine roll-out and President Biden’s USD1.9tn fiscal stimulus. Asian markets showed mixed performance as improving manufacturing PMIs and vaccine roll-out in the region gave support amidst rising US Treasury yield.

Fixed Income

Fixed Income return was negative in March as the 10-year government bond yield rose from 6.58% to 6.77%. The bond market posted foreign outflow of USD1.4bn in March. Despite the Fed’s statements that it plans to maintain dovish policies, investors were still not given clear indication on the Fed’s plans to address rising US Treasury yield and inflation. Hence, foreign continued to post outflows from EM countries such as Indonesia. Recent government bond auctions also showing slower demand. Meanwhile, the US Treasury yield rose to 1.75% while the INDON31 yield closed at 2.65%.

 

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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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