Indo Premier Investment president director Diah Sofianti said in addition to the trade war, the negative sentiments were triggered by increases of the US Federal Reserve Funds Rate, although that would only go up twice this year, compared to four times like last year.

She suggested that investors can consider gold as an alternative investment instrument because of its nature, which was more secure.

“The rupiah exchange rate would still be volatile this year,” she added.

BNI Asset Management president director Reita Farianti added that this year economic growth, which is estimated would be lower than last year, would also add to the risks in the financial markets.

Reita said the slower growth would be caused by slower direct investment and the weaker prices of commodities that would still be the backbone of Indonesian exports.

Amid the high risks in the financial markets, Reita said retail bonds could also become alternative instruments because the coupon rates would still be higher than certain series of the government’s debt papers.  

“Investors could still expect coupon rate increases if there is an interest rate hike,” she said recently as quoted by kontan.co.id, adding that asset-backed securities under collective investment contracts (KIK-EBA) could be yet another alternative investment instrument.

Reita said the KIK-EBA not only promised competitive yields, but their risks were also more measurable. (bbn)   

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