Stocks Plunged. Even Gold Did Too.
In times like this, are there still good opportunities in the market?
Jakarta Composite Index (JCI) Fell 12% on MSCI Announcement
Last week, the MSCI announcement to apply an interim freeze on certain index related changes for Indonesian securities and potential downgrade to Frontier Market (FM) shook markets, with the JCI plunging ~12% WoW and the index experiencing two trading halts.
The sell-off was broad-based across blue-chips and conglomerate stocks, although conglomerate stocks saw the heavier impact. The IDX30 pared back by -6.2% WoW, and the LQ45 lost -7.6%.
In terms of flows, foreign investors were net sellers of ~IDR 15.8T last week, with top foreign sells being BBCA, BMRI, and BUMI. Meanwhile, top foreign buys were EXCL, AMMN and BRPT.
In the wake of last week’s market turmoil, the Commissioner of the Indonesian Financial Services Authority (OJK) and the Head of the Indonesia Stock Exchange (IDX) stepped down, along with several other key figures.
Indonesian regulators and listed companies now have until May 2026 to make improvements around transparency, ahead of MSCI’s next assessment.
New Fed Chair Triggers Profit-Taking in Precious Metals
In commodities, both gold and silver dropped sharply following recent rallies. The sudden sell-off occurred after the announcement of Kevin Warsh as the new Fed Chair.
Warsh is widely viewed as “hawkish”, meaning favoring higher interest rates to curb inflation and tighten money supply, although he has recently stated the need to have more dovish policies to align with the Fed’s goals.
Even so, markets interpreted his nomination as a shift away from an “ultra-dovish” policy stance relative to other candidates, strengthening the U.S. dollar (DXY strengthened +1.05% after the announcement) and triggering significant profit-taking across precious metals.
When Markets Dropped, What Did Simpan Do?
At Simpan, we viewed last week’s market sell-off as a buying opportunity and added exposure to several stocks that’s on our watchlist, especially in the commodities sector.
Earlier, when the JCI was near all-time highs, we had taken profits and held more cash, which we deployed when markets pulled back last week.
Despite the drop in metal prices, we see this move as a healthy correction and do not think that it is a sign of deeper economic trouble.
The broader macro outlook remains intact; even though gold and silver prices fell, our conviction did not change: we remain invested in companies with exposure to gold and other metals.
What’s The Takeaway?
Moments like these are a good reminder that it’s important to stay diversified and not put all your eggs in one basket. Markets don’t move in straight lines: a strong rally doesn’t last forever, and pullbacks are bound to happen. In markets like Indonesia, timing the market is important to seize opportunities.
For investors who want to capture these opportunities but don’t necessarily have the time to do so, strongly encourage you to take a look at our new product: Actively Managed Portfolio (AMP).
Simply put, AMP automatically adjusts your reksa dana allocation on a monthly basis, across cash, bond, and equity funds. This means you don’t need to time the market yourself. During periods of market stress, AMP aims to build a more resilient portfolio, minimizing risk and offering drawdown protection.