Highlight Monthly Commentary - August 2021

Macroeconomics

August inflation was booked at 1.59% YoY where on a monthly basis inflation was booked at 0.03% MoM driven by education related inflations. July trade balance remained positive at USD2.6bn due to slower import growth. Budget deficit reached 2.04% of GDP as of July. Forex reserve rose to USD137.3bn in July while Bank Indonesia maintained its policy rate at 3.50% during the month.

Equity

JCI index posted positive return in August of 1.3% MoM. Foreign investors posted inflow of Rp4.5tn in August. The market started strong due to excitements over listing of Bukalapak, the first tech unicorn listed in the Indonesia market. However, retail selloff in the tech sector and concerns on potential Fed tapering caused market to turn volatile mid-month. Indonesia reported strong 2Q21 GDP growth of 7.07% YoY while COVID-19 conditions continue to improve in the country which blew positive sentiments to the equity market.

Global equity market posted mixed returns in August. The US market recorded positive returns despite concerns on Delta variant and potential Fed tapering. The European continued to post positive returns as economy reopening and vaccination progress well in the region. The Asian markets reported mixed performances due to spread of Delta variant of COVID-19 in the region while PMI weaken across the region.

Fixed Income

Fixed Income market’s performance was positive in August as the 10-year government bond yield fell from 6.29% to 6.06%. The bond market posted foreign inflow of Rp15tn in August. Improving COVID-19 conditions in Indonesia and lower tax on coupon payments help attract more foreign interests in IndoGB. In addition, the 2022 state budget draft is also positive for the bond market as it aims to push deficit below 3% by 2023. Meanwhile, the US Treasury yield rose to 1.31% while the INDON31 yield closed at 2.13%.

Disclaimer

INVESTMENT IN MUTUAL FUND CONTAIN RISKS, PRIOR TO INVESTING IN MUTUAL FUND, INVESTOR MUST READ AND UNDERSTAND THE FUND PROSPECTUS. PAST PERFORMANCE DOES NOT INDICATE FUTURE PERFORMANCE.

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