Navigating Volatility: Markets Weaken Amid Geopolitical Tensions and Rising Oil Prices
Amid ongoing geopolitical tensions, we stay selective, defensive, and focused on resilient sectors.
Dear Clients,
Over the past week, escalating geopolitical tensions in the Middle East, coupled with persistently elevated oil prices, have continued to weigh on global markets. Asian equities came under pressure, with the Jakarta Composite Index (JCI) declining by around -5% WoW (as of March 16, 2026).
Brent crude prices remain elevated at around USD 100 per barrel, reinforcing inflationary concerns across Asia—particularly for net oil-importing economies. Higher energy prices are likely to exert pressure on currencies and broader economic outlooks, as reflected in the Indonesian Rupiah, which has hovered near IDR 16,950/USD. Domestically, part of the recent market weakness can also be attributed to seasonal trends ahead of the Ramadan period, during which investors typically increase cash allocations.
Foreign investors remain net sellers, with net outflows of approximately IDR 1.05T over the past week. Notably, foreign inflows were concentrated in commodity-linked names such as EMAS, AADI, ITMG, and ADRO—sectors that have historically demonstrated resilience during periods of geopolitical uncertainty. On the other hand, outflows were concentrated towards banking stocks, including BBRI, BBCA, BMRI, and BBNI.
What’s Ahead?
Markets are closely monitoring the upcoming FOMC meeting scheduled for March 18. Investors will be paying particular attention to commentary from Fed Chair Jerome Powell regarding the impact of geopolitical developments and elevated energy prices on the U.S. economic outlook.
In the near term, continued volatility is likely as markets digest evolving macroeconomic and geopolitical dynamics.
How Did Our Funds Perform?
Amid the broader market sell-off, our equity-oriented portfolios experienced declines, though they continued to outperform the JCI.
What Has Simpan Done?
In light of heightened uncertainty, the Investment Team at Simpan has continued to take measured approaches. Ahead of the Ramadan holiday period, we have selectively trimmed positions and taken profits in names where our conviction has weakened given the shifting macro environment. .
However, we retain strong conviction in commodity-related sectors—including coal, gold, and oil & gas—which we believe are well-positioned to outperform in an inflationary and geopolitically sensitive environment.
Our decision to hold higher levels of cash is a tactical move made in anticipation of market uncertainty during the Lebaran period. Once the market reopens following the holiday, we will carefully assess the situation to determine our ongoing investment strategy, and we’ll keep you updated along the way.
We wish you and your loved ones a blessed and peaceful Ramadan.