Market Performance:

• Major Indices: last week was one the best week in global stock index when S&P jumped 4.6% WoW and Nasdaq shot up 6.7% WoW.
• Domestic Indices: Same as global move, JCI booked 3.7% WoW and LQ45. The rally is still early, and investors can see the sign of the reversal of soft equity market in the 1Q25.

 

Key drivers of the week:

• Macroeconomic Data:
  • The IMF significantly revised down its forecasts of global growth to 2.8% (prev: 3.3%), citing trade tension and policy uncertainty affecting global economic activity.
  • BI Rate Decision: Stay 5.75% (Prev: 5.75%; cons: 5.75%), BI cited slower growth prospect due to trade wars
  • Indonesia Trade Balance: USD 4.3bn surplus (Prev: 3.1bn, cons: 2.8bn), marking the 60th consecutive months of trade surplus

 

• Geopolitical Events:
  • The leader of The Catholic Church, Pope Francis, passed away Monday, 21 April. During his reign, the late pontiff had shaped geopolitics by toning down tension in the middle east, mediating Cuban-US relationship, and calling for peace in Ukraine and Gaza.
  • Donald Trump frightened markets by making several comments about J. Powell not cutting rates fast enough, even hinting at firing him. Trump clarified that he had no intention on firing Powell.
  • America increased the pressure on to agree to a peace deal with Ukraine by proposing a deal thats beneficiary for Russia
  • JD Vance visited India for talks over a trade deal with Narendra Modi, Prime Minister of India. Both parties made progress in a trade deal.
  • Spain followed Germany’s step in increasing its defense spending. This is bringing a structural shift in the EU.

 

• Sector/Corporate Highlights:
  • SoE Bank Dividends have already been distributed, providing Danantara with initial capital for deployment.
  • Bank Central Asia (BBCA IJ) posted in line earnings (+10% y/y) with bank deposits growing 5% q/q amidst tight liquidity.
  • Unilever Indonesia (UNVR IJ) posted above expectation profits due to cost efficiencies. However, the company is still losing market share shown by declining revenue.
  • United Tractors (UNTR IJ) announced final dividend of IDR 1484/sh (6.4% yield)Mining royalties hikes for nickel, gold, copper and bauxite is finalized and will be imposed starting 26 Apr25.

 

Market Sentiment:

• VIX: markets are calmer than before hence VIX dropped to 25 from 29 previously.
• Bond Market: UST yield continued stable at 4.3%, while IndoGb yield unchage at 6.9%.
• DXY: Hovering around 99.5 which is good for the time being, while gold price reached new high in the history almost USD 3500/t.oz. Rupiah is still Rp16,820/USD.

 

Looking Ahead:

• Economic data and event to watch:
  • Danatara investment deployment and projects
  • Country-by-country trade deals with the US until the end of the 90-day tariff pause
  • US economics data (Jobs opening, GDP, PCE)
• Corporate events:
  • Companies’ 1Q25 results.

 

Summary & recommendation:

The domestic equity and bond market started to perform consistently in April giving a sign of reversal from soft 1Q25 market. We see the toughest period of the US tariffs has passed and analysts see there will be negotiation to reach only 10% tariffs for most of countries except China. With China, the US will negotiate and come up with lower tariff as well.

 

Product recommendation:

RD MGSED, RD MICB, RD Index FTSE ESG, RD IDAMAN, dan RD MMUSD.

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