In November 2024, the spotlight was on the U.S. election, where Donald Trump secured re-election as president. This outcome fueled significant inflows into the U.S. equity market, driven by expectations of tax cuts and economic growth, with hopes that high tariffs on goods from China and other countries would boost job creation. The rally in U.S. stocks was further supported by strong corporate earnings and declining interest rates from the Federal Reserve. However, there are signs the rally may slow, prompting investors to explore opportunities in underperforming regions such as Europe and emerging markets, including Indonesia.

The domestic equity market experienced a significant decline due to a stronger U.S. dollar, driven by optimism about U.S. economic prospects under the new administration. The Rupiah weakened from Rp 15,200 in early October 2024 to Rp 15,900 per U.S. dollar, a drop of around 5%. Bank Indonesia kept its benchmark interest rate steady at 6.00% and continued to support the Rupiah’s appeal through SRBI (Sukuk Bank Indonesia). Despite recent declines, there is ample room for recovery as domestic equity valuations remain attractive, supported by improving macroeconomic conditions heading into year-end. Positive developments include the postponement of the planned VAT hike to next year and the distribution of government social assistance following local elections, both of which could boost purchasing power and stimulate domestic consumption.