Indonesia’s equity market is currently facing a "perfect storm" this February, triggered by an unexpected MSCI warning and Moody’s surprise move to revise Indonesia’s sovereign outlook to Negative. This turbulence stems from global investor concerns over policy predictability, particularly regarding the newly formed Danantara and substantial social spending. Consequently, the JCI saw a sharp correction approaching 15%, sparking short-term panic across capital markets and the Rupiah.

However, a closer look suggests that this volatility is driven more by sentiment than fundamental weakness. Despite Moody’s critique, S&P and Fitch maintain a Stable outlook, with Fitch recently affirming a top-tier AAA rating for INA. This reinforces that our economic foundation remains solid, further backed by the latest 4Q25 GDP growth of 5.4%, the strongest performance in the last three years.
 

Our economist believe the impact on the bond market will be limited, as foreign ownership has structurally declined to just 13.1%, significantly lower than in previous years. We view this correction as a rare and compelling opportunity to accumulate blue-chip stocks in the banking, telecommunications, and consumer sectors at deeply discounted valuations. As long as the 3% deficit ceiling is maintained, a further rating downgrade remains unlikely.

Looking ahead, the CORETAX system and Indonesia’s strategic position in the global supply chain are expected to propel economic growth beyond 6%. Now is the time to remain calm and focus on long-term data rather than daily volatility. We encourage you to capitalize on this correction as a strategic entry point before the market recognizes that Indonesia’s fundamentals are far stronger than the prevailing noise.