Head of Macroeconomics and Director of Investment Strategy Bahana TCW, Budi Hikmat, recommended market players to buy government securities (SBN) due to a correction due to the increase in US government bonds' yields, which jumped 1.52 percent last week.

"Observing the correction in the government bonds yields that jumped to nearly 6.6%, we recommend that investors take the opportunity to invest in the bond market apart from investing in stocks," suggested Budi Hikmat in a press release, on Tuesday (2/3).

He projects that the yield on government bonds will be 5.8% by the end of 2020. Thus, domestic investors can buy SBN on the primary market through an auction and or buy on the secondary market where the price is falling.

According to him, the increase in yield on US government bonds reflected market confidence in the United States' economic recovery, which could trigger inflation. The strengthening of the economy in Uncle Sam's country is shown by the increase in wages in the US that grew 5.4% in January 2021 following the increase in property prices of 10.86% YoY or well above the average of 5%.

"With house sales prices that can still rise and wages increase during the pandemic, this shows that the US economy is strengthening, especially if vaccinations are successful. This is what underlies the increase in T-bond yields. And this is good news for assets such as stocks, "he explained.

Bahana TCW also observes Bank Indonesia's steps in controlling the secondary market for the first time this year. Since the COVID-19 pandemic, BI has been focused on stabilizing the bond market, especially in the secondary market.

"Even though foreigners have made a take profit in the bond market, we see that it is still positive considering the flow of foreign funds is still flowing in the amount of Rp2.5 trillion throughout 2021 (YTD)," he said.