BNI AM Estimates SUN Yield Rally to 6.4%, Short-Medium Tenor Series Becomes Choice

Bisnis.com, JAKARTA – BNI Asset Management estimates that the yield on 10-year Government Bonds (SUN) could rally to 6.4% from the current position of around 6.74%, if macroeconomic conditions are maintained and foreign capital flows continue to flow in. BNI Asset Management CIO Farash Farich said that since the beginning of this year, institutional investor interest has increased in the bond market amidst these yield conditions. He said that one of the supporters of yield is the trend of global monetary easing, as has been done by the ECB and RBI, even BI. The Fed has also given a signal of easing to cut interest rates in the second half of this year. "This policy encourages the creation of a liquidity flush to the global financial market, including emerging markets such as Indonesia," Farash told Bisnis, Thursday (6/19/2025).

Meanwhile, the yield on 10-year government bonds, which is currently around 6.74%, is expected to rally further to 6.4% if macroeconomic conditions are maintained and foreign investor inflows continue. Farash also sees the current SUN valuation as competitive against peer countries with the same rating, so the domestic bond market will be attractive until the end of the year.

With these conditions, BNI AM as a mutual fund manager also prefers short tenors to the bell curve, namely bonds with tenors of 5 to 10 years. Bonds with this tenor are more in demand because there is a decrease in the secondary Minimum Reserve Requirement (GWM) ratio from 5% to 4%, effective June 2025. The policy, which is part of Bank Indonesia's steps to loosen banking liquidity, is estimated to increase liquidity by up to IDR 78.45 trillion. Not to mention, there are FR0081 series bonds that mature with an outstanding value of around IDR 142.2 trillion and SRBI maturing around IDR 134 trillion.

Farash also sees that with the liquid market position, there is potential for banks to make reinvestments or bond replacements, especially in medium tenors. "The bull steepening trend that is occurring in the domestic bond market, where short-term yields have fallen more significantly than long-term, also supports the overweight strategy in short to medium tenors which currently offer optimal yields with relatively lower duration risks," explained Farash.