All Simpan funds delivered positive returns. Performance was attributed to Equities and Bonds, supported by a strengthening Rupiah as central banks began lowering interest rates. We saw three consecutive months of absolute positive returns across all funds.

  • The JCI hit a record high before dropping 1.86% due to China’s stimulus and Middle Eastern tensions. As central banks lowered rates, emerging market bonds and equities saw inflows. However, China’s policy shifts triggered outflows from markets like Indonesia to its undervalued equities. We used this as a chance to reposition towards metals and commodities, expecting increased trade demand from China.
  • In Fixed Income, the 10-Year Indonesian Government Bond continued its rally, with yields falling to 6.44%, down from 6.63% the previous month. The Indonesia Government Total Return Index (INDOBeX) delivered a 1.21% return in September. In response, we have extended duration in our portfolios and increased exposure to medium- and long-tenor bonds to take advantage of yield opportunities and the steepening yield curve.

What we are looking out for in your portfolio:

  • Domestic inflation slowed to 1.84% in September, driven by lower food prices. BI cut rates by 0.25%, with another cut expected in October, providing a boost to weakened domestic consumption.
  • The Middle East conflict raised oil prices on logistics fears, though its full impact is uncertain. Global markets are correcting, but equity entry opportunities arise amid rate cut expectations.
  • US August CPI fell to 2.5%, supporting further rate cuts in November/December. September's FOMC meeting saw a 0.50% rate cut, signaling the Fed’s urgency to prevent further economic decline.
  • We remain optimistic about gains in export-oriented commodities, banks benefiting from rate cuts, and longer-tenor government bonds due to China’s potential recovery and favorable interest rate trends.

Access the English version of the full report here.

Access the Indonesian version of the full report here.