As we approach the Eid Al-Fitr festivities, the Indonesia Stock Exchange will close for roughly a week. Historically, markets often see investors positioning ahead of the holiday period in anticipation of a seasonal pickup in consumer spending, as households increase purchases of food, apparel, and other retail goods in preparation for the annual homecoming tradition.

Following Pak Purbaya’s appointment at the Ministry of Finance of Indonesia, early indicators suggest that domestic consumption could recover compared to last year. This is reflected in the gradual improvement in consumer credit growth as well as a firmer manufacturing PMI trend. Nevertheless, the ongoing geopolitical tensions in the Middle East remain a key external risk, as a prolonged conflict could weigh on consumer confidence and potentially dampen the pace of spending recovery.
 

Indonesia Consumer Credit

Meanwhile, the JCI continues to face pressure despite the recovery in consumer spending from last year’s low base and the possibility that several Indonesian listed companies may still deliver solid earnings growth this year. Notably, certain shipping companies with tanker fleets operating in the spot market stand to benefit from the recent surge in global tanker charter rates, which have risen sharply amid disruptions and uncertainty in global energy logistics.
 

1 Year T/C Crude

In summary, we believe selective opportunities remain available for investors who focus on companies with strong fundamentals and visible earnings growth such in selected consumer and shipping companies. However, as we head into the extended Eid holiday, a more cautious stance may be warranted given the unpredictability of geopolitical developments during the market closure, especially as selling pressure on the JCI remains evident despite the improving outlook for Indonesia’s macroeconomy.

We recommend investors build a watchlist of fundamentally strong companies and accumulate positions gradually, while awaiting clearer signs that the current market selling pressure has started to ease.