Highlight Monthly Commentary - September 2021

08/10/2021
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Macroeconomics

Indonesia September consumer prices inched down by 0.04%MoM / +1.6%YoY with core inflation grew 1.3%YoY. PMI rebounded to 52.2 as mobility restriction was relaxed and business entering expansionary mode. Indonesia recorded a high trade surplus of USD 4.7bn in Aug21. Forex reserve reached new highs at USD144.8bn. Budget deficit accounted 2.32% of GDP as of August. Bank Indonesia maintained its policy rate at 3.50% during the month.

Equity

JCI gained 2.3% MoM; Investors were coming back to equity market as covid condition improved in Indonesia and led to relaxation of mobility restriction. The cyclical and reopening related sector are enjoying an inflow from the condition. Additionally, high commodity price (both Coal and CPO) provided a strong tailwind to the energy sector and a multiplier expectation on the future to Indonesian economy. Foreign posted a net foreign buy of Rp 4.3tn in the overall market and around Rp 8.9tn in regular market for the month of Sept. Pressure remained on Technology sector after its strong rally and yield climbing.

Global equity market mainly declined in September. The US market recorded a negative return amid rising covid cases and rising yield. The European reversed its courses and booked negative return as inflation rose and energy crisis looming. The Asian markets mostly went south due to concern of contagion effect from highly indebted Evergrande and contraction in China’s PMI.

Fixed Income

Indonesia 10 years government bond yield increase by 14bps MoM to 6.26% along with the rising yield in the US. Foreign ownership in bond was at 21.6% with total outflow Rp19tn MTD and outflow of Rp12tn YTD. The US 10-year treasury rose 18bps to 1.487% by the end of Sept21; Indonesian USD denominated 10-year yield (INDON31) closed at 2.32%.

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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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