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Weekly Insight

Important Question

21 January 2025
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Important Question

Global Markets

US stocks advanced ahead of the presidential inauguration. S&P 500 gained 2.91% over the week. The S&P 500 rose 2.91% over the week. Equity markets surged after the election on expectations that the new administration would implement pro-growth policies benefiting corporate America. Trump has reiterated his focus on core priorities such as cutting taxes and raising tariffs. Bonds also rebounded last week, with
10-year yields declining to 4.62%.

Japan's Nikkei 225 declined 1.89% on anticipation that the Bank of Japan (BoJ) will raise interest rates at its January 23-24 meeting. In contrast, China's SSE and Hong Kong's Hang Seng Index (HSI) rose 2.31% and 2.73%, respectively, following the release of stronger-than-expected fourth-quarter GDP growth of 5.4% (forecast: 5.0%).


Indonesian Markets

Bank Indonesia defied market expectations with a surprise 25 basis point rate cut, setting the new interest rate at 5.75%. This move was unexpected, as it occurred despite significant pressure on the Rupiah. Bank Indonesia stated that its focus has shifted towards promoting economic growth, while it intends to stabilize the Rupiah through other measures, such as market intervention.

This condition boosted the stock market, with the Jakarta Composite Index (JCI) gaining 0.93% over the week. However, the Rupiah came under further pressure, declining to 16,373 against the US dollar, while the 10- year government bond yield remained relatively stable at 7.15%.


Weekly Highlight on Economic Indicators


Our Take:

Most of our funds delivered positive performance. Valbury Prime Dynamic Equity increased by 1.34% (BM: 0.25%), Valbury Investasi Berimbang increased by 1.26% (BM: 0.34%), Valbury Money Market I increased by 0.10% (BM: 0.10%). However, Valbury Stable Growth Fund decreased by 0.13% (BM: 0.10%).

The Bank Indonesia rate cut came as a surprise to us as well. This unexpected move raises important questions about its potential impact whether the intended positive effects of the rate cut, such as stimulating economic growth, outweigh the potential negative consequences, particularly the risk of further weakening the Rupiah.

The recommendation for investment to our investors (in order) :
Fixed Income Fund > Balanced Fund > Equity Fund > Money Market Fund.


Author : KBVAM Investment Team


DISCLAIMER :
INVESTMENT THROUGH MUTUAL FUNDS CONTAINS RISKS. PROSPECTIVE INVESTORS MUST READ AND UNDERSTAND THE PROSPECTUS BEFORE DECIDING TO INVEST THROUGH MUTUAL FUNDS. PAST PERFORMANCE DOES NOT REFLECT FUTURE PERFORMANCE.

This document was prepared based on information from reliable sources by PT KB Valbury Asset Management. PT KB Valbury Asset Management does not guarantee the accuracy, adequacy or completeness of the information and materials provided. PT KB Valbury Asset Management Indonesia is not responsible for any legal and financial consequences arising, whether against or suffered by any person or party and in any way deemed to be a result of actions taken on the basis of all or part of this document.