Research

Bonds: The Less Foreign Money, The Easier To Control

market-avatar

Algo Research Team

Market | Nov 17, 2023 | Views: 100

The content provided here is for informational purpose only. It is not an advise or recommendation. Please do your own research.
content-img

Key Summary:

  • Foreign ownership has declined substantially
  • Local institutions & retail to increase government bond ownership
  • Expect bond yield around 6-6.5% in 2024

Many of us are not aware that in 2019 the Minister of Finance had deliberately aimed to lower foreign ownership in domestic government bonds to 20%, where at the time it was still around 38%. As quoted, the 20% foreign ownership target in government bonds was desirable in the short term period as domestic investors were expected to get larger. We expect yield to continue its downtrend as it is necessary for the government to lower its interest expense, while buying would likely come from local institutional and retail investors. 2024 bond yield expectation is around 6-6.5%.



Less foreign ownership, more local institutions and retail

How was our research?

DISCLAIMER: Algo is an independent research platform and is not affiliated with any financial institution. We are not a licensed securities dealer, financial advisor, broker, or investment bank. The contents shared across our website, and social media platforms are intended for informational purposes only and reflect our views and opinions. It is not meant to be construed as financial advice and/or a recommendation to buy or sell an asset. Past performance does not guarantee future results. As a research platform, our contents are made to provide data-driven information and research-based articles, and should not be used as a basis for making any investment decisions. We strongly encourage you to conduct your own research and consult with a licensed financial advisor before making any investment decisions. Algo is not regulated by OJK (Otoritas Jasa Keuangan) and does not provide any investment services. We are not responsible for any financial decisions you make based on the information provided. All content is presented with the intent of informing only.