10 March 2025
Market Performance:
- Major Indices: US stocks continued declining (S&P -3.09% WoW and Nasdaq -3.45% WoW) caused by the tariff and rising unemployment. Donald Trump restrains DOGE as concern mounts over scale of job losses. US cabinet told to keep all the people in first sign of pushback against Elon Musk’s cost-cutting project.
- Domestic Indices: IHSG and LQ45 jumped 5.84% wow and 6.69% wow, respectively. The rally was supported by the declining DXY and oversold stocks in previous week.
Key drivers of the week:
- Macroeconomic Data and News:
- Indonesia February inflation: -0.09% yoy, first deflation since 2000, much lower than 0.76% yoy in January.
- Indonesia booked higher S&P PMI Manufacturing 53.6 in Feb25 than previous 51.9 in January.
- China recorded deflation 0.7% yoy in Feb25 compared to soft inflation 0.5% yoy in Jan25.
- China S&P PMI Manufacturing in February was stable at 50.8, almost the same from previous 50.1.
- US S&P PMI Manufacturing in February booked higher 52.7 than previous 51.2.
- ECB cut rates by 25bps to 2.5%, signaling a pause ahead. ECB has cut 150 bps from the peak at 4.00%.
- US Non Farm Payrolls in Feb25 just 151k, below consensus view of 160k. Unemployment rate in Feb25 also missed consensus number of 4.0% with actual 4.1%.
- Geopolitics Events:
- Trump imposed tariffs on China, Mexico (starting April), and Canada, which retaliated.
- USA halted military aid to Ukraine, ended intelligence sharing.
- USA to regain control of the Panama Canal; BlackRock-led group acquiring CK Hutchison’s stake in Panama Ports (operating license until 2047).
- Germany conducted a policy shift, lifting its defense spending limit and setting up a 500bn infrastructure fund to combat external threats.
- China has set GDP target of 5% with a deficit target of 4% of GDP.
- OPEC+ to proceed with output hike in April, pushing oil below USD70/bbl
- Sector/Corporate Highlights:
- DHE regulations are effective starting 1 March, commodity exporter must place their export proceeds within Indonesia for 12 months.
- The Government to legislate mandatory THR for ojek online drivers; details pending.
- XL Axiata’s merger with Smartfren is moving forward smoothly, approvals expected before 25 March AGMS.
- Prabowo met with 8 major conglomerates at the Presidential Palace to discuss Danantara and his key priority programs. The invited ones were Anthony Salim, Sugianto Kusuma (Aguan), Prajogo Pangestu, Boy Thohir, Franky Widjaja, Dato Sri Tahir, James Riady dan Tomy Winata.
- Freeport obtained copper concentrate export permit extension until Jun 2025 due to smelter issues
- IIMS 2025 concluded with 22.3k units booked valued to IDR 8tr (+19% y/y). Chinese car brands contributed 33% of total bookings.
Market Sentiment:
- VIX: Rose to 23.37 (vs 19.63 previous week) due to the tariff dilemma.
- Bond Market: UST yield hovered 4.2 – 4,3%, while IndoGb yield stable at 6.9%. The efficiency program of Indonesian government budget has become the support of IndoGb yield.
- DXY: Dropped to 103 (prev: 107) as German government announce massive fiscal spending on defense. Note that the EU basket account for 57% of DXY Index. If the Euro strengthens, the DXY’s upside could be limited or even decline.
Looking Ahead:
- Economic data and event to watch:
- US JOLTS Job opening and CPI inflation.
Summary & recommendation:
The domestic equity market has successfully rebounded. We think equity market still can go further but investors might think to diversify to money market funds. The government budget efficiency left questions to the market hence investors might seek the clarity to understand the impact to overall economy.
Product recommendation:
RD MMUSD, RD MIPU, RD MGSED, RD MICB, RD Index FTSE ESG.
Tactical asset allocation: in March equity 42.5%, fixed income 42.5% and money market 15%.
| PRODUCT | 3M PERFORMANCE | YTD PERFORMANCE |
|---|---|---|
| JCI | -10,1% | -6,3% |
| LQ45 | -14,3% | -9,2% |
| EQUITY | ||
| MITRA A | -13,0% | -10,3% |
| MICB A | -12,7% | -9,3% |
| ASEAN5 | -13,6% | -10,7% |
| MGSED | -6,0% | -2,9% |
| INDEX | ||
| FTSE ESG A | -12,4% | -7,8% |
| ETF | ||
| XMLF | -14,0% | -9,3% |
| BALANCED | ||
| MISB | -1,61% | -1,10% |
| MIA | -8,02% | -6,13% |
| FIXED INCOME | ||
| MIDU | +2,14% | +2,08% |
| MIDO2 | +1,65% | +1,82% |
| IDAMAN | -0,68% | +2,23% |
| MONEY MARKET | ||
| MIPU A | +1,13% | +0,84% |
| MMUSD | +0,80% | +0,57% |
*The data above is as of March 7th, 2025
For More Information
Contact Mandiri Investasi – (021) 526 3505
WhatsApp Mandiri Investasi – 0816 86 0003
Email Mandiri Investasi – [email protected]
Mandiri Investasi – www.mandiri-investasi.co.id
DISCLAIMER
The information and opinions expressed in this article are for general informational purposes only and are not intended as specific advice or recommendations for any individual, security, or investment product. The content is meant to provide education about the financial industry. Opinions and views presented may change without prior notice. All performance data and investment returns mentioned in this article should not be used as a guarantee or basis for decisions to buy or sell any securities. The data reflects historical performance and does not guarantee future results. Investing in mutual funds carries risks. Investors are advised to carefully read and understand the prospectus before making any investment decisions.
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