Research & Stock Picks

Company Reports

13 January 2025

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2025 Market Outlook

Strength

In 2025, Indonesia’s strong point will be its resilient GDP growth of c.5% versus other economies which may see greater economic slowdown; Prabowo's consensus approach through the formation of majority parties creating greater political stability; potential increased FDI from BRICS member countries

Weakness

Recent UST yield rally driven by the Fed’s cautious monetary easing, may continue to weaken the IDR, causing persistent foreign outflows from bonds and equity markets; Weak Chinese economy to dampen commodity prices, lowering farmer incomes and worsening Indonesia’s twin deficits

Opportunity

With the index down 2.7% in 2024 and net foreign outflow of IDR 29 tn (USD 1.9bn), valuations have become more reasonable at 2025 P/E of 11.9 (-1.1 sd), paving the way for improved market performance

Threat
Potential Yuan depreciation to stimulate Chinese exports on the back of Trump’s trade war is likely to drag down other regional currencies including the IDR, resulting in investors exiting the JCI

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