Jakarta, September 21, 2022 - The global economy is gradually recovering from the COVID-19 pandemic amid high inflation rates. It is predicted that world economic growth would slow down over the next one to two years as rising prices of commodities, such as energy and foodstuffs, would suppress consumers’ purchasing power and accelerate inflation rates, creating challenges further.
Therefore, world communities, both in developed and developing countries, need to be prepared to face these foreseen challenges.
“Despite the fact that the global market is currently highly volatile, Indonesia's economy appears to be more resilient. Both the capital market and the rupiah exchange rate are quite buoyant and even tend to strengthen in the midst of the current global sentiment,” explained Priyo Santoso as President Director of PT BNP Paribas Asset Management (PT BNP Paribas AM) today during a media briefing on the signing of cooperation between PT Bank BTPN Tbk (Bank BTPN) and PT BNP Paribas AM at The Langham, Jakarta.
Through the collaboration, Bank BTPN and PT BNP Paribas AM offer investment solutions to support investment needs in all circumstances. Bank BTPN now provides its customers with BNP Paribas Rupiah Plus for money market mutual funds, BNP Paribas Prima II and BNP Paribas Prima USD for fixed income mutual funds, and BNP Paribas Pesona for equity funds. Meanwhile, for customers who want to start investing in the global stock market, Bank BTPN also provides a foreign securities-based sharia equity mutual fund, namely BNP Paribas Cakra Syariah USD, which focuses on investing in stock markets in developed countries, such as the United States, Europe, and Japan, and picks stocks by using an environment, social, and governance (ESG) filter.
With current market dynamics, Indonesia is actually benefiting from increasing prices of commodities, in particular coal, as the country is a net exporter of the commodity. But at the same time, it also is a net importer of oil, thus a rise in commodity prices would increase subsidized fuel types, and eventually prompts fluctuations in inflation.
“This condition can actually be seen not as a short-term pain, but a long-term gain, for Indonesia. Although there would be an impact of inflation and weaker purchasing power in the short term, we expect the inflation rate to stabilize in 2023. In addition, the government's budget is also expected to remain strong so as to maintain investors’ confidence in policy makers. This is an asset for the continuity of investment confidence and Indonesia's economic growth in the long term,” Priyo added.
In regard with the currency market outlook, the rupiah is relatively more stable when compared with other currencies against the US dollar. Priyo believes that a stable rupiah contributes positively to portfolio investment inflows as foreign investors would focus more on a company's fundamentals as the impact of currency volatility on their portfolios becomes smaller.
“In the midst of an increasingly dynamic economic conditions, PT BNP Paribas AM chooses to focus on long-term investment. The most important thing for us is that investors understand their needs and how to find momentum that is relevant to market conditions. One of the ways we can achieve this is through our collaboration with Bank BTPN to expand access to relevant investment solutions,” said Priyo.
Bank BTPN Head of Wealth Management Business Helena said that from the economic fundamental point of view, Indonesia has excellent opportunities and prospects going forward. "We can see (those opportunities and prospects) from our data on GDP growth, export activities--especially in energy commodities--state revenues that continue to grow and ample room to make policy adjustments, although there are several things to watch out for in investing in the remaining 2022. Therefore, it is important for investors to continue to actively monitor current economic and market conditions,” said Helena on the same occasion.
Helena also emphasized the importance to always invest according to the risk profile and investment objectives in order to remain safe and able to properly manage investment portfolios. "Investors must adjust their investment diversification to their risk profiles in order to find the best investment strategies to achieve their goals."
One of the investment strategies that can be implemented by investors in the midst of uncertainty, especially in the fourth quarter of 2022, is by diversifying investments in several asset classes as a step to mitigate risks. Portions can be divided into several types of investments according to investors’ risk profiles, such as the money market (deposits, money market mutual funds), bonds (government bonds, fixed income mutual funds), and stocks (stock securities, equity mutual funds).
"We hope that the presence of these investment products would further complement wealth management products and provide investment needs in all circumstances in line with the bank’s vision and commitment to always providing comprehensive services for customers throughout Indonesia," concluded Helena.