05 June 2025
Catching Up
In May 2025, the Indonesian equity market experienced a combination of recovery and volatility, influenced by both global and domestic factors. The market was buoyed by a significant easing of global trade tensions, particularly following the US-China trade agreement reached earlier in the month, which improved investor risk sentiment toward emerging markets like Indonesia. Additionally, Bank Indonesia (BI) implemented a rate cut, further supporting market sentiment by easing monetary conditions. These developments helped the Jakarta Composite Index (JCI) rally by 14.4% over the past three months, despite a modest year-to-date gain of just 1.4%. Domestically, clarity around the Danantara sovereign wealth fund’s operations helped calm earlier market concerns about governance and fiscal management. Coupled with rising government spending and anticipated improvements in liquidity in the second half of 2025, these factors supported a shift in investor preference toward equities over bonds.
However, several concerns tempered market enthusiasm. Economic growth forecasts for 2025 were revised downward to below 5%, driven largely by sluggish household consumption, which contracted by 8% month-on-month following the Ramadan period, and ongoing layoffs in the manufacturing sector. While agriculture showed strong double-digit growth, manufacturing, which accounts for 19% of GDP, remained under pressure. The market also remained sensitive to foreign capital movements, as evidenced by outflows of IDR 50.7 trillion in first four months of 2025, although inflows improved in May. The rupiah’s exchange rate hovered below Rp16,500 per USD, and rising U.S. Treasury yields, which climbed to 4.5%, posed additional risks. The BI rate cut helped ease some pressure on the rupiah and supported liquidity, but the market remained cautious given external uncertainties and domestic economic challenges.
Looking ahead, focus remains on undervalued domestic stocks, especially those linked to Danantara and sectors likely to benefit from fiscal stimulus. While short-term volatility related to trade negotiations and the maturity of SRBI bonds in May and June 2025 could persist, improving liquidity conditions supported by the BI rate cut are expected to foster greater market stability over the medium term.
Product Recommendation
| EQUITY FUND | |
|---|---|
| MITRA A | MITRA invests in majority domestic stocks, with a focus on Big Cap stocks. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| MICB A | MICB primarily invests in stocks included in the LQ45 index. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| BALANCED FUND | |
| MIA | MIA invests in Equities, Bonds and Money Market with Medium Term and categorized Medium Risk. Investors bear the risk associated with the equity portfolio. |
| MISB | MISB invests in Sharia Equities, Sukuk and Money Market Sharia with Medium Term and categorized Medium Risk. Investors bear the risk associated with the equity portfolio. |
| EQUITY INDEX AND ETF FUND | |
| FTSE ESG A | FTSEESG primarily invests in stocks included in the FTSE Indonesia ESG Index. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| XMLF | Mandiri ETF LQ45 is an ETF that invests in blue-chip stocks listed in the LQ45 Index. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the portfolio of these stocks. |
For More Information
Contact Mandiri Investasi – (021) 526 3505
Mandiri Investasi Whatsapp – 0816 86 0003
Mandiri Investasi Email – [email protected]
Mandiri Investasi Website – www.mandiri-investasi.co.id
DISCLAIMER
The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for individuals or specific mutual fund or investment products. It is intended solely to provide education about the financial industry. Views reflected in the content may change at any time without notice. All performance data and investment returns mentioned in this article cannot be used as a basis for calculation to buy or sell a mutual fund. This data is performance records based on historical data and is not a guarantee of future mutual fund performance. Investment through mutual funds carries risks. Investors are required to read and understand the prospectus before deciding to invest through mutual funds.
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