The first week of March has been strong for the equity markets. Following our last update in late February—when the JCI was down -11.8% by February 25—March has started with a solid rebound, bringing the index up 5.3% month-to-date (MTD). This rebound validates our view shared last week that the recent JCI correction was unwarranted, given the strength of Indonesia's economic fundamentals.

Several factors have contributed to the strong rebound in the JCI:

  • Attractive Valuations – After the sharp correction in February, many stocks were trading at deeply discounted prices, making them appealing to investors looking for long-term value.
  • Surge in Foreign Inflows – Foreign investors have returned to the Indonesian equity market, taking advantage of attractive valuations.
  • IDR Recovery – The recent strengthening of the Indonesian Rupiah against the US Dollar has restored investor confidence, reducing concerns over capital outflows and improving market sentiment.
  • Domestic Investors are Buying – Institutional and retail investors have actively increased their equity exposure, further driving the rally. Corporates and funds like ours have also continued to accumulate, recognizing the long-term growth potential.
  • Resilient Corporate Earnings Outlook – Many companies have shown resilience, with stable earnings forecasts supporting a more optimistic market view.

How we’re managing the portfolio

Having built up our cash position in anticipation of opportunities, we are actively managing our portfolio amid this strong momentum. We are focusing on momentum-driven companies with high liquidity to capitalize on the short-to-medium-term uptrend while also adding high-quality blue-chip stocks at these suppressed valuations, which we believe will generate strong returns over the long run.

Our Recommendation

Given the current market momentum, we maintain our recommendation from last week to continue investing in Indonesian equities. At these levels, entering the market through the Simpan Sustainable Equity Fund remains an interesting entry point for long-term investors. Despite volatility, we believe those who stay invested will be well-positioned to reap significant returns over time.