Market Observers: Investors Divert Funds to "Safe Haven" Assets Amid Iran-US Conflict

Jakarta – Capital market observer Reydi Octa has stated that global investors are inclined to divert their funds towards safe-haven assets such as gold, the US dollar, and US government bonds.

This investment reallocation is occurring as tensions escalate between Iran, the United States, and Israel, prompting investors to reduce their exposure to equity markets, particularly emerging markets including Indonesia.

“Domestically, investors will be selective towards energy or commodity stocks that benefit from rising crude oil prices,” said Reydi when contacted by Antara in Jakarta on Monday.

Thus far, Reydi observes that the conflict between these three nations will likely have short-term impacts driven primarily by market sentiment.

“However, if the escalation intensifies, the effects could be more profound and prolonged,” stated Reydi.

Regarding the Indonesia Composite Stock Index (IHSG), Reydi noted that the impact is likely to be negative in the short term as foreign investors reduce their exposure to emerging markets, coinciding with rupiah weakness and increased volatility.

“Rising crude oil prices also add to inflation concerns,” said Reydi.