Household Consumption Becoming Increasingly Defensive, This Sector Presents Investment Opportunities - BCA Securities
PT Mirae Asset Sekuritas Indonesia has highlighted the ongoing trend of declining consumer confidence over the past three months as a signal of increasing caution among households amid economic uncertainties and global pressures.
The Consumer Confidence Index (IKK) was recorded at 122.9 in March 2026, down from 125.2 the previous month, marking the lowest level in the last five months. Although still above the optimism threshold of 100, this downward trend is seen to reflect changing consumer expectations for future prospects, rather than just current conditions.
Research Analyst at PT Mirae Asset Sekuritas Indonesia, Novani Karina Saputri, assesses that this weakening is beginning to impact societal consumption patterns. The sharpest decline was in the business activity expectations component, which fell 5.4 points, followed by job availability expectations down 3.7 points, and income expectations down 3.0 points.
“The IKK decline for three consecutive months reflects consumer expectations for the future that tend to continue weakening. However, as long as the IKK remains above 100, we assess that household consumption remains sufficiently strong to drive growth, albeit with an increasingly defensive composition. Expenditure will be more concentrated on primary needs, while purchases of durable and discretionary goods tend to be restrained,” said Novani.
The weakening was more pronounced in the upper-middle income group with monthly expenditures of Rp2.1-4 million and above Rp5 million, which historically are more sensitive to changes in macroeconomic expectations. On the other hand, the increased share of consumption in the low-income group indicates pressure on purchasing power starting to be felt by vulnerable segments.
“The labour market dynamics are the most determining factor at present. This pressure is exacerbated by energy inflation and rupiah weakening that raises the price of imported goods, thus eroding households’ real purchasing power. Recovery will very much depend on labour market stability, controlled inflation, and certainty in fiscal policy direction,” added Novani.
On the corporate side, Mirae Asset Sekuritas also sees recovery potential in the commodities sector along with strong nickel downstream demand. This is reflected in the increased recommendation for PT Vale Indonesia Tbk (INCO) to Buy with a target price of Rp7,400 per share.
Senior Research Analyst at PT Mirae Asset Sekuritas Indonesia, Muhammad Farras Farhan, assesses that the company’s performance is beginning to show solid improvement. Q4-2025 revenue grew 17.8% year-on-year to USD285 million, while full-year 2025 net profit increased 31.7% to USD76 million.
“The nickel sector is in an interesting phase. INCO benefits from the still high nickel ore premium and increasingly strong revenue diversification. We see 2026 as a proof year for the company, with EBITDA margins projected to reach 33.3% from 21.4% in 2025,” said Farras.
Going forward, nickel ore sales volume is projected to surge 304% year-on-year to 9.4 million wmt, supported by demand from High-Pressure Acid Leach (HPAL) projects and potential RKAB approval increases. Mirae Asset projects EBITDA of USD478 million, or 126% growth, and net profit of USD242 million, or 218% year-on-year surge.
“The main catalysts that investors need to watch are the certainty of RKAB approval, which will open up room for increased ore sales volume, as well as developments in HPAL project realisation as a medium-term demand driver,” concluded Farras.