Latest Weekly Insight

Weekly Insight

Low Inflation

11 February 2025

Weekly Insight

Low Inflation

11 February 2025

Global MarketsUS President, Donald Trump, announced plans to unveil reciprocal tariffs last week, escalating the ongoing trade war and further fueling inflation fears, wiping out the week’s gain in the US stock market. The S&P 500 fell 0.95% on Friday and closed the week down 0.24%. US economic data revealed weakening consumer sentiment amid inflation worries, while mixed jobs figures pointed to a moderating but still healthy labor market, with notable wage growth. This strengthens the Federal Reserve's position that it is in no hurry to lower borrowing costs.
Indonesian MarketsIndonesia's capital market diverged last week, with investors shifting from stocks to bonds. This shift was likely influenced by the recent inflation report, which showed a YoY rate of 0.76%, significantly below consensus forecasts.

The Jakarta Composite Index (JCI) plummeted 5.16%, led by a significant 14.52% drop in Bank Mandiri (BMRI) shares. This decline followed a JP Morgan report that underweight the bank. During the week, foreign investors withdrew US$231.1 million from the stock market (as of Feb 7th), while bond inflows reached US$371.7 million (as of Feb 6th).

Notably, global funds purchased a net US$581.3 million in Indonesian
bonds on Feb 6th, the largest single-day purchase since Sept 19th. Consequently, the 10-year government bond yield dropped to 6.89%, while the JISDOR remained relatively stable at around 16,300 per US dollar.
Weekly Highlight on Economic Indicators
Our Take:The stock market's significant downturn led to losses in our equity and balanced funds. But, our fixed income fund benefited on the bond market rally, exceeding the performance of comparable funds.

Valbury Prime Dynamic Equity decreased by 3.98% (BM: -3.14%), Valbury Investasi Berimbang decreased by 3.71% (BM: -1.34%). On the other hand, Valbury Stable Growth Fund increased by 0.98% (BM: 0.52%) and Valbury Money Market I increased by 0.10% (BM: 0.10%).

Low inflation contributed to Bank Indonesia's (BI) surprise interest rate reduction last month. While this week's data may offer some insights, the direction of BI's policy at next week's meeting remains uncertain.

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

Weekly Insight

Uncertainty

04 February 2025

Weekly Insight

Uncertainty

04 February 2025

Global MarketsThe emergence of Deepseek triggered US market fluctuations earlier this week, but investor confidence has since rebounded seeing limited potential for the Chinese AI startup to affect the "Magnificent Seven's" performance. Despite this, S&P500 fall by 1% over the week, due to concerns about tariffs imposed on Mexico and Canada.

In other news, the Fed decided to hold interest rates steady at 4.5% as expected and indicated that stalled progress toward lower inflation warranted a patient approach. This decision led to a rise in the US dollar, reaching 108.22.

Major Asian stock exchanges were closed for the holidays. During the shortened trading week, the Japan Nikkei 225 fell by 0.90%, the Korea KOSPI dropped by 0.77%, and the Singapore STI rose by 1.36%.
Indonesian MarketsIn the two weeks following Bank Indonesia's surprising rate cut, the rupiah has remained relatively stable, though not without some fluctuations. The 10-year government bond yield closed last week at 6.97%, and the rupiah ended the week at 16,312 against the US dollar. The JCI, however, experienced high volatility in just two trading days last week, declining by 0.79%.
Weekly Highlight on Economic Indicators
Our Take:We felt the impact of this week's market volatility on our funds. Valbury Prime Dynamic Equity decreased by 0.73% (BM: -0.42%), Valbury Investasi Berimbang decreased by 0.74% (BM: -0.15%). On the other hand, Valbury Money Market I increased by 0.09% (BM: 0.09%) and Valbury Stable Growth Fund increased by 0.01% (BM: 0.04%).

Going forward, the US tariff policy is expected to have repercussions beyond the directly affected countries, impacting the global market. Given the uncertainty surrounding its implementation, we anticipate continued market volatility.

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.

Weekly Insight

Important Question

21 January 2025

Weekly Insight

Important Question

21 January 2025

Global MarketsUS 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 MarketsBank 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.

Weekly Insight

Hawkish Stance

14 January 2025

Weekly Insight

Hawkish Stance

14 January 2025

Global MarketsA surprisingly strong jobs report triggered a sharp market downturn, sending stocks tumbling and bond yields climbing alongside the dollar. The S&P 500 index fell 1.94% over the week. The 10-year US Treasury bond yield sharply increased to 4.76%, and the US Dollar Index rose to 109.49. Traders reduced their expectations for Federal Reserve interest rate cuts in response to the robust employment data, which showed the US economy adding the most jobs since March and the unemployment rate unexpectedly falling.

Pessimism is mounting among equity investors in China, as rising geopolitical risks compound the market's disappointing start to the year. The Shanghai Stock Exchange Composite (SSE) fell 1.34% last week and was down 5.47% year-to-date. The prospect of increased tariffs under a potential second Trump term is weighing heavily on investors, who fear further trade tensions could derail China's already sluggish economic recovery.
Indonesian MarketsAfter a strong start to the year, the Indonesian stock market declined, with the Jakarta Composite Index (JCI) falling 1.05% and the LQ45 Index dropping 2.07%. The 10-year Indonesian government bond yield rose significantly to 7.17% following a sharp increase in the US 10-year Treasury yield.
Weekly Highlight on Economic Indicators
Our Take:Our funds saw a considerable decrease in value during this market downturn. Valbury Prime Dynamic Equity decreased by 3.03% (BM: -0.91%), Valbury Investasi Berimbang decreased by 3.06% (BM: -0.74%), Valbury Stable Growth Fund decreased by 0.38% (BM: -0.21%).

Meanwhile, Valbury Money Market I increased by 0.10% (BM: 0.10%). Given the unexpectedly strong US labor market, market participants anticipate a more hawkish stance from the Federal Reserve. Consequently, we expect Bank Indonesia to maintain its policy rate at 6%, prioritizing rupiah stabilization.

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.

See All Weekly Insight...