"With predictions of stable banking sector performance as it is now, we recommend stock mutual funds that focus on banking stocks, one of which is Mutual Funds," said Arief at the Media Day: April by Mirae Asset Sekuritas event today, April 23, 2024.

Data from the Financial Services Authority (OJK) shows that funds managed by the mutual fund industry amounted to IDR 501 trillion at the end of last year, originating from 1,809 mutual fund products managed by 94 investment managers. One of the supporters of the growth of the mutual fund industry is sales agents, where Mirae Asset is one of the OJK-licensed Mutual Fund Selling Agents (APERD) which markets hundreds of selected mutual funds from around 30 investment managers.

Arief explained that support from Mirae Asset's digital innovation makes it possible to make the NAVI by Mirae Asset application available for retail investors and NAVI Corporate via the site https://fundcorporate.miraeasset.co.id/ for corporate and institutional investors. With various interesting features available in the NAVI application, investors can enjoy various conveniences in investing, moreover, they can enjoy free transaction fees.

 

Hanif Mantiq, CEO of STAR AM, said the banking sector remains a favorite in the capital market, with a large market capitalization and performance that continues to show a positive trend. This sector plays an important role in driving the movement of the Composite Stock Price Index (IHSG).

On the same occasion, Rully Arya Wisnubroto, Chief Economist of Mirae Asset Sekuritas Indonesia, was optimistic that the banking sector would still be promising because credit growth in the banking sector would continue to grow high, still in line with BI's projections in the range of 10 – 12%. 

DPK growth, he continued, also started to improve in January and February, respectively at 5.8% YoY and 5.7% YoY, after the last three months of 2023 grew below 4% YoY.

"The loan to deposit ratio (LDR) is still relatively well maintained at below 85%, and with the level of non-current credit (NPL) still low, there is still room for increased credit growth," said Rully at Media Day.

 

He said this condition was the result of the government's pro-growth macroprudential policies. Credit growth in January 2024 was recorded to be quite high, reaching 11.8% YoY, the highest in almost the last 5 years. Credit growth in February 2024 was slightly lower but remained high at 11.3% YoY. Gross NPL in the same period remained low, namely 2.35%.

"We view that with loose macroprudential policies accompanied by adequate liquidity, credit growth will remain strong and support Indonesia's economic growth even amidst various challenges throughout 2024."

However, Rully also assessed the risks that must be mitigated in the future so that financial sector stability is maintained. It seems that banks will be more careful in distributing credit considering that the banking credit restructuring stimulus policy for the impact of COVID-19 has ended as of March 31 2024. Currently banking Loan at Risk (LaR) is still quite high, namely 11.56% as of February 2024.

 

utside of banking, he assesses that the current condition of the Indonesian economy is still faced with many challenges. One of the biggest challenges currently is the high pressure on the Rupiah exchange rate.

He said that the movement of the Rupiah in the medium term is still very difficult to predict because it is very influenced by global issues, not influenced by domestic conditions. The weakening trend in the Rupiah is more due to the Fed's higher-for-longer interest rate policy sentiment which has again caused volatility and uncertainty in global markets.

This global sentiment, which also has an impact on the large flow of foreign capital out of Indonesia, makes it difficult for BI to loosen monetary policy in the near future.