Bareksa Insight: SBN Yield Eases as UST Rises — A Look at SR025, Mutual Funds and Gold Investment Potential

Indonesia’s bond market is showing resilience as global pressure mounts. For investors, the focus is not on guessing a single market direction, but on arranging tenor, liquidity and investment diversification according to their risk profile.

The yield on Indonesia’s 10-year government bond (SBN) fell to 7.088% on Monday (7/9), from 7.102% on Friday (4/9). This direction contrasts with the 10-year US Treasury (UST) yield, which rose to 4.803% from 4.784% over the same period.

This divergence in direction deserves investors’ attention. The daily rise in the UST was around 1.9 basis points (bps), while the SBN yield fell by roughly 1.4 bps. The SBN–UST spread on 7 September stood at around 228.5 bps.

Global pressure is coming from oil prices approaching US$100 per barrel, inflation risk and rising expectations of Federal Reserve tightening. Stronger-than-expected US employment data for August — 162,000 jobs added and an unemployment rate of 4.1% — prompted several institutions to revise their interest rate projections. The FOMC meeting is scheduled for 15–16 September 2026, with the decision announced on 16 September.

Why Can the SBN Yield Fall When the UST Rises?

A single day’s movement does not necessarily mean the domestic market is immune to global turmoil. However, the decline in the SBN yield amid rising UST yields shows that domestic factors — liquidity, investor demand, bond supply and risk perception — have, for now, been able to withstand external pressure.

OJK data shows foreign investors recorded net purchases of SBN worth Rp15.35 trillion in August, up from Rp6.79 trillion in July. Indonesia’s foreign exchange reserves also rose to US$146.5 billion in August from US$145.3 billion in July, equivalent to financing around 5.4 months of imports. These two data points help maintain market confidence, although they do not eliminate the risk of rupiah volatility.

At the industry level, the Indonesia Composite Bond Index (ICBI) strengthened 2.23% month-on-month in August to 440.04. However, the average SBN yield rose 26.48 bps over the month. This combination reminds investors that bond index performance captures coupon effects and price changes across various tenors; monthly average movements are also not identical to yield changes in a single benchmark series on a single day.

Predictions of Fed Rate Hikes Strengthen

UBS Global Wealth Management revised its projection for the Fed Rate, forecasting a 25 bps hike in both September and December 2026. Citigroup and Macquarie also revised their views following the US labour data. On the other hand, Fed Governor Christopher Waller signalled greater caution should inflationary pressures ease.

CME FedWatch-based probabilities remain dynamic. CME commentary on 7 September put the chance of a 25 bps hike at around 58%, rising to 60.4% on 8 September, up from around 52% at the start of the week.

Implications for Fixed-Income Mutual Funds

In theory, bond prices move in the opposite direction to yields. If the SBN yield continues to fall, fixed-income mutual funds (RDPT) stand to gain additional capital appreciation beyond coupon income. However, fixed-income mutual funds with longer durations are also more sensitive should yields rise again due to UST pressure, inflation or rupiah weakness.

Money Market Funds to Maintain Liquidity

Money market funds (RDPU) are relevant for funds that will be used in the short term, or as a place to park liquidity while investors wait for the direction of interest rates to become clearer. Their volatility is generally lower than that of fixed-income mutual funds, but their returns may adjust downwards when market interest rates fall.

SR025: High Fixed Coupon Amid Changing Yields

The offering period for the SR025 series retail sukuk runs until 16 September 2026 at 10.00 WIB. SR025T3 offers a fixed coupon of 6.8% per year and SR025T5 offers 6.9% per year. Both are paid monthly and can be traded on the secondary market after the minimum holding period ends on 11 October 2026.

For investors who need monthly cash flow and can hold their investment according to their horizon, SR025’s fixed coupon can help provide nominal certainty. The choice between T3 and T5 should be tailored to liquidity needs and tolerance for secondary market price changes — not merely because of the 10 bps coupon difference.

Gold: A Diversifier, Not a Substitute for Liquidity

Spot gold corrected 0.38% to US$4,406.44 per ounce on 7 September. From the trading range at the start of the month, the US$4,323–4,380 area is the nearest technical support, while US$4,450–4,493 is the resistance. Technical levels do not guarantee price direction, but they can help investors plan staggered purchases.

Structurally, central bank demand remains a pillar of support. The World Gold Council’s 2026 survey found that 45% of responding central banks expect their institutional gold reserves to increase over the next 12 months, while 89% expect global central bank gold reserves to rise. For long-term diversification purposes, a dollar-cost averaging (DCA) strategy during corrections can reduce the risk of entering the market all at once at a single price.

Conclusion

The easing of the 10-year SBN yield while UST yields rise gives room to domestic fixed-income assets, but global risks have not subsided. Investors can place money market funds for liquidity needs, consider fixed-income mutual funds or SR025 according to their horizon and risk tolerance, and maintain diversification through gold with staggered purchases during corrections. The key is aligning instruments with objectives, not chasing short-term price movements.

*Past performance does not reflect or guarantee future performance.