Analyst Says Global Turmoil Pushes Investors to Focus on Fundamentals

Jakarta (ANTARA) - Caroline Rusli, an analyst from PT Manulife Aset Manajemen Indonesia (MAMI), believes that increasing global uncertainty means investors need to prioritise a fundamental-based approach when making investment decisions. She explained that shifting expectations regarding global monetary policy direction in recent months have triggered increased volatility in financial markets and prompted investors to become more selective in placing funds. “A key change to watch is the expectation for the size and frequency of monetary easing, which has shifted quite significantly over the past month,” Caroline said in a statement in Jakarta on Monday. In December 2025, the market expected the United States central bank (The Fed) to cut its benchmark interest rate, the Fed Funds Rate (FFR), by 50 basis points (bps) throughout 2026. However, since last May, that expectation has reversed into a potential rate hike of around 20 bps. A similar situation has occurred in Indonesia. Bank Indonesia (BI) raised its benchmark interest rate by 50 bps in May 2026, higher than the market expectation of 25 bps, then raised it again by 25 bps in early June. According to Caroline, the combination of monetary tightening, rising bond yields, rupiah depreciation, concerns over fiscal conditions, and several assessments by foreign institutions on the Indonesian market have affected investor appetite for risky assets. Amid these conditions, she considers a fundamental-based investment strategy to be increasingly important compared to merely considering cheap valuations. Caroline said the Indonesian stock market currently still offers attractive valuations. However, low valuations are not enough to drive significant fund inflows if they are not followed by increased investor confidence in policy direction and the emergence of clear short-term catalysts. “Indonesia is currently in a selective value phase. Therefore, a defensive strategy and stock identification through a bottom-up approach on selected sectors and issuers is very crucial,” she stated. She added that current conditions also provide a clearer picture of regions, currencies, and asset classes that are relatively more resilient to global turmoil when global liquidity is no longer as accommodative as in recent years. In this context, Caroline views that markets with structural growth prospects supported by strong corporate earnings growth will be better able to withstand global uncertainty. One region considered still attractive is North Asia, which benefits directly from the development of the artificial intelligence (AI) industry, semiconductors, and global technology investment. According to her, increased capital expenditure by the world’s giant technology companies or hyperscalers such as Amazon, Google, Meta, and Microsoft has the potential to positively impact the technology supply chain in Asia. “When the world’s largest technology companies continue to raise capital expenditure, the impact will first be seen in the Asian supply chain, especially the semiconductor sector, electronic components, advanced materials, and power-related infrastructure,” Caroline said. The attractiveness of the Asian market is currently supported not only by valuation factors but also by corporate earnings growth that has long-term structural catalysts. “Therefore, we see Asia’s strength not merely as a factor of cheap valuations, but supported by earnings growth that has structural catalysts,” she explained.