2024-09-11 05:07:00
Diagram (Medium)
PT Mandiri Sekuritas projects that investment returns in the Indonesian bond market (NDOGB) 2024-2025 will be positive at 15% with the assumption that the yield on 10-year Government Securities (SBN) will fall to 6% in 2025.
The Head of Fixed Income Research Mandiri Sekuritas Handy Yunanto explained that this optimism stems from three main factors, namely the possibility that the Central Bank of the United States (US), The Fed, will start lowering its benchmark interest rate or Maintenance Funds Rate (FFR) this September and is expected to continue falling into next year.
Historically, a decline in US Government bond yields will accompany a decline in US interest rates (US Treasury yield) and the dollar index, so that it will continue to stimulate the flow of foreign funds into the bond market. Handy said, assuming the FFR falls to 4.75%, the 10-year US Treasury yield will be at 3.8%,
Also read: New Corporate Bonds Are Attractive, After Interest Rates Slide
“In that way, we estimate that the yield on 10-year SBN bonds will have the potential to fall to a level of 6.2% or a range of 6.0%-6.4%,” he said in an official statement, on Wednesday (11/9). ).
The second factor is that investment returns in the Indonesian bond market are believed to continue to be positive as the fiscal outlook for 2025 is well maintained. The new government, Handy said, will manage fiscal matters in a prudent, careful and measured manner.
The third factor, in addition to the strengthening of the rupiah against the US dollar, the interest rate of Bank Indonesia Rupiah Securities (SRBI) is also trending downward.
Also read: Actively developing the country through SBN, BCA won nine awards from the Ministry of Finance
“As SRBI interest rates continue to fall, we believe demand for bonds may increase,” Handy said.
Mandiri Sekuritas also undertakes projects Credit Default Swap (CDS) 5 years or a type of guarantee against the default risk in Indonesia is at 70, and the rupiah will trade stronger at IDR 15,400 against the US dollar at the end of this year.
“A further decline in US Treasury yields also has the potential to strengthen the valuation position of Indonesian bonds,” he said. (Z-11)
#Bond #Market #Projected #Bring #Positive #Returns