Monthly Investor Update May 2023

The December market has been volatile due to foreign investor sell-offs and global economic uncertainties. Both the Fed and BI made rate decisions, with the Fed cutting rates and BI holding steady. While BI's decision aims to stabilize the Rupiah, the Fed's cuts are cautious due to persistent inflation. The market reacted negatively to these developments, leading to declines in both Indonesian and U.S. stocks and a weakening Rupiah. Simpan recommends a defensive investment strategy, focusing on non-discretionary consumption stocks, U.S. Dollar-exposed assets, and short-to-medium duration bonds. They emphasize the importance of staying invested and using a dollar-cost-averaging strategy for long-term growth.

The Rupiah is sliding again, reaching 16,013 per U.S. Dollar as of December 16, 2024. In this environment, we continue to favor equities with strong U.S. Dollar exposure as they tend to remain resilient during times of currency volatility.