The domestic equity market has been significantly influenced by global macroeconomic trends. Early in the month, recession fears were prevalent, but by the end of August 2024, the Federal Reserve successfully guided the economy toward a convincing soft landing. It seems the Fed, much like a seasoned race car driver, has completed its final victory lap in a scenario where inflation and the job market were well-aligned. The Fed chairman made a pivotal announcement, signalling that it is now the appropriate time to begin cutting US interest rates. These rate reductions will be implemented gradually, with decreases of 25 basis points at each meeting starting in September 2024.

The Rupiah strengthened to below Rp15,500 in August 2024, improving from around Rp16,250 per USD the previous month. This appreciation follows a trend of global currencies gaining against the USD as the US central bank lowers its rates. A stronger Rupiah allows companies to reduce input costs, potentially expanding their profit margins over time. Additionally, we anticipate an increase in purchasing power in the coming months, especially as the local elections in November 2024 approach. Overall, we hold a very positive outlook on the domestic equity market and believe it can continue to achieve record highs.