Jakarta. As of the last third quarter of 2016, government bonds recorded the best performance among other investment instruments. During the period, the average of state bond yields, which is reflected on INDOBex Government Total Return, stood at 18.17%, while Jakarta Composite Index (JCI) recorded an average of 16.8% of shares’ performance.

The government bond’s positive performance was driven by the trend of decrease in interest rate. “In the beginning of 2016, 10-year government bond stood at 8%, higher than BI (the Central Bank) rate”, said Investment Director of PT Sucorinvest Asset Management Jemmy Paul Wawointana.

Indonesia’s bonds became more attractive amid global uncertainty, which was drven by the plan to increase the Fed funds rate and Brexit. Foreign ownership in government bonds also sharply increased during the period.

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Financial Planner at One Shildt Financial Planning Risza Bambang said that the massive infrastructure developments have improved Indonesia’s reputation and driven foreigners to invest in government bond.

Government bond is expected to have positive prospect until the end of 2016. The positive prospect was driven by low inflation rate and the positive performance of the first phase of tax amnesty program.

In addition to government bond, Risza suggested that the shares of infrastructure, consumer, and banking sectors may offer positive yields by the end of this year. On investment, Risza suggested investors to monitor precious metal sector, since the sector has been showing a stable performance during the last ten years.

Meanwhile, Head of Research Department at Universal Broker Indonesia Satrio Utomo reminded that the tendency of decrease in BI rate will bring negative sentiment to banking sector’s shares.

Satrio suggested that mining sector has positive prospect due to the recent increase in mining commodities, mainly coal. Financial Planner at Finansia Consulting Eko Endarto suggested shares and multi funds as the prospective investment in the next three years period.

For one to two years period, Eko suggested bond as the prospective investment instrument.

(MUHAMMAD FARID/Translator)