00:00uh what we're seeing in indonesia today it's it's not a macro shock i think that that's
00:05something i want to highlight it's an index and technical shock as you've pointed out yesterday
00:10sell-off and today's is driven primarily by msci placing uh indonesia on probate
00:15information until may as it reviews how this free float is calculated so this is obviously
00:20unsettled markets because it introduces uncertainty around potential passive outflows
00:25uh not because indonesia's fundamentals has suddenly uh changed um so
00:30in terms of reviewing it am i panic selling uh no i am not panic selling i think
00:35historically in the past if we have seen even september 2025 when we've had mass
00:40massive index shocks uh investors have actually been rewarded for stepping in
00:45um the monthly i mean you've you've highlighted the 200-day moving average 100-day being
00:50reached but actually on the monthly and quarterly um all the alignment on the index is still
00:55a buy at the moment so i would like to see 7 500 on the index hold
01:00before uh before uh before reacting into any further
01:05okay so mohit just to clarify you haven't sold anything since yesterday just to just to close
01:10the loop specifically on that one uh uh no i haven't sold uh stocks since yes
01:15today but having said that you know i think the last time we came on uh bloomberg uh back in september when
01:20uh when the poor buyer was stepped in you know we were aggressive buyers back then so we were
01:25sitting on relatively good gains uh of course that has now been um been wiped out
01:30out but uh you know we did did did take some profits off the table early
01:35in jan when the markets went up excessively and hit year highs so we did take some profits off the
01:40table then but since then we haven't actually um we haven't actually sold anything
01:52you
01:45uh on the on this uh msci news we will in fact be looking to to add
01:57you
01:50uh in the near future
01:51uh in the near future
01:51uh in the near future
01:51uh no okay well that that was my next question if
01:54you
01:55you
01:55haven't bought already wondering if you could be more specific if you could of course
02:00in terms of what you're yeah what you're eyeing specifically um
02:05i think in the meantime of course we want to avoid uh names that will be susceptible to
02:10more passive outflows so while the banks for example look really um
02:15good from a dividend yield perspective as well as from a price point perspective um
02:20they are more susceptible to more outflows if things don't materialize so
02:34you
02:25things like bank bca bni bri those are all um
02:39you
02:30massive casualties in terms of passive outflows so we would be looking more uh at
02:35those stocks that have more fundamental earnings visibility as well as less
02:40uh foreign um less foreign exposure so in that case
02:45uh we won't have that impact uh should msci rule unfavorably in may
02:50yeah because at that point if we do get that unfavorable
02:55ruling you're setting up for a reduction in waiting for all indonesian companies in the msci emerging
03:00markets index you're even looking at a potential downgrade to frontier market status
03:05does that change your thesis around investing in indonesia at all
03:10indonesia honestly this is uh again indonesia is on probation
03:15indonesia is on probation
03:15indonesia until may i my base case is they will find a solution there is no realistic
03:20risk of indonesia being downgraded to frontier market status we have to remember
03:25indonesia is on probation
03:30indonesia is on probation and one of the top 20 markets globally in terms of market cap in terms of
03:34indonesia is on probation and other institutions in terms of trading volume last year we we edged up
03:37indonesia is on probation and one of the top 20 markets globally in terms of trading volume last year we we edged up
03:37indonesia is on probation and one of the top 20 marketstrends we we edged up singapore malaysia vietnam
03:39I don't, this is about index methodology fine-tuning.
03:44It's not a judgment on the country.
03:46So I would definitely be stepping in and be a.
03:49I will not be reducing my exposure to Indonesia.
03:54Mohit, I like how you put it because the bull case here is.
03:59But weeks or months from today, you know, it's.
04:04Rare we get price dislocations that are not fundamentally driven.
04:09Right.
04:09To your point.
04:10And people might look back at this day as, you know, that was a window.
04:14I could have gotten in given this market has been on an uptrend and people were waiting to buy a dip.
04:19Now, I wonder if this is just, if it is, turns out.
04:24To be just tweaking along concepts and definitions.
04:29And clearly there's something beyond that too, though.
04:32How easy of a fix do you think this.
04:34Will it be?
04:37I think to this, this morning.
04:39I saw our finance minister come on TV and also.
04:44Suggesting that the IDX, the BayEI are actively looking to.
04:49Find a solution and they want to find a solution definitely before May.
04:53They're looking as early.
04:54As much so in the short term sentiment is clearly neutral.
04:59To negative global investors are telling us let's wait until there's clarity in May.
05:04Don't add risk yet and don't fight the uncertainty.
05:07That keeps pressure on the.
05:09Prices near term, but historically when Indonesia has faced this over.
05:14Hang long term investors who stepped in during uncertainty were often rewarded.
05:19Once the clarity returned.
05:21So would you wait until that point in time when things are.
05:24Solved because chances are the markets would have already priced it in and started.
05:29Vallying so again, I would be looking at this opportunity to find those, those companies.
05:34That you wanted to invest in but didn't and missed out on the recent rally.
05:39Do it to the highs and start focusing on, on, on your shopping list.
05:44Mohit, in your opinion, are some of these conglomerates too tightly held?
05:49I think that's a very, that's a simple, that's a simple question which could have a complicated answer.
05:54Yeah, I think the, I think the Indonesia market in general, it's a market.
05:59Where the stocks are held by the promoters from a majority.
06:04They don't let go during the IPOs, they still retain 70, 80% of their.
06:09Shareholdings.
06:10So I, I think it's a, it's a common practice in Indonesia.
06:14But on the flip side, isn't it a good thing that the promoters still hold.
06:19The majority of the company in which the alignment of interests obviously would.
06:24be the same for the minority shareholders.
06:26They would want to do better because they still control.
06:29the majority they would want to see the company grow further.
06:32So, I mean, there's two.
06:34Two sides to the, to the coin, right?
06:36So I, if you want to look at it from a perspective that it could be.
06:39Controlled or price controlled and yes, there's, there is obviously.
06:44Some bad apples that could do that.
06:46But, you know, the focus should be again on fundamentally.
06:49Strong companies with clean balance sheets, high, high, real free float.
06:54Solid cash generation and earnings at the end of the day.
06:57So, not, not.
06:59But not particularly focused again on the index flows.
07:04Just check, of course, keeping an eye on what's happening in the currency space.
07:06And you've got further declines for the rupee here.
07:09Actually, the most since October now, amid that stocks route.
07:12But it's also reflecting concerns around.
07:14Around central bank independence.
07:16And I'm curious for your views on this given we've had.
07:19President Prabowo who's appointed his nephew to the position of deputy governor.
07:24Does that concern you at all?
07:26And, and just talking about, you know, business.
07:29Businesses being tightly held but also central banks and concerns around nepotism for instance.
07:34I would, we would definitely keep an eye on that.
07:38I, I.
07:39I think at the end of the day, um, Indonesia has, um, uh, it.
07:44It's, it's not the only country that has, um, faced this kind of issue.
07:48Right.
07:49I mean.
07:49If you look at into the U S as well, I mean, um, president Trump's.
07:54Uh, children are very well connected in the business circles.
07:57Um, I, I think we need to.
07:59Focus again on the underlying credentials of the person, not necessarily where.
08:04Whether they are a nephew or a son or a daughter of, of one of the politicians.
08:08I would like.
08:09To see again, let's focus on the credentials.
08:11Let's see how he steps in and on what he does.
08:14We obviously want to make sure that the central bank continues to remain independent.
08:19of, um, of politics.
08:21So, so let's, let's see how that plays out.
08:24Uh, okay.
08:25Uh, okay.
08:26Uh, okay.
08:27Uh, the.
08:28Uh, Mohit.
08:29Yeah.
08:30I'm wondering from a, I guess, a market piping or.
08:34Uh, mechanics perspective.
08:35How do we know what, you know, put setting news aside, because to your point.
08:39Right.
08:40Once we get a resolution here, we're probably too late.
08:42And the market's already closed that gap.
08:44Are there signs that you're watching out for in terms of being able to tell you have to sell
08:49up?
08:49Is close to, if, if we're close to the bottom on this one specifically near term.
08:54Um, like I mentioned, I think from an index level, if we looked at.
08:59Um, the, from the April tariff low to the recent set to the recent.
09:04January high, um, the 7,900 pullback.
09:09Was about 0.38, uh, retracement.
09:11Um, and that has now broken.
09:13Right.
09:14So.
09:14So 7,500 is about the 0.5 retracement and also aligns with the monthly.
09:19And quarterly averages, specifically the 10 quarter.
09:22So I would like those.
09:23Um.
09:24And, of course, if it continues.
09:25Uh, if it continues to.
09:26Uh, if it continues.
09:27Uh, if it continues to.
09:28Uh, if it continues to.
09:29Uh, if it continues to break down, then we have to assess our positions.
09:31Uh, and, and maybe, um, pivot them to.
09:34Certain stocks that may benefit on more on the rally.
09:37Um, but.
09:38Uh, but.
09:39Besides that, of course, uh, in February and March, it's, it's a bit more of a quiet
09:43period when.
09:44They go into their Eid, uh, holidays and Ramadan.
09:47So.
09:48They, you know.
09:49They might be, um, a slowdown in terms of, of, um.
09:54Slowdown period in terms of investments.
09:56However, I would be also looking at, uh, consumption.
09:59Uh, during this time and domestic liquidity.
10:01So if.
10:02If.
10:03If the consumption.
10:04The consumption remains strong or there's a pickup and domestic liquidity also remains
10:07intact.
10:08I think.
10:09Those are good signs to watch.
10:10Uh, and we can probably look to step in again for.
10:14Transportation capital.
10:15This is very.
10:16Uh, discomforting of course, but it's not.
10:19it's not a dysfunctional market.
10:22So ultimately,
10:24index risk creates volatility,
10:26but the fundamentals will determine the risk.
10:29It returns.
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