WEEKLY COMMENTARY 27 JANUARY 2023
Market Event
JCI was up this week closing at 6,899 while equity
foreign investors posted inflow of US$ 75 mn in the
past week.
• The US economy expanded an annualized
2.9% on quarter in Q4 2022, following a 3.2%
jump in Q3 and beating forecasts of 2.6%.
Considering full 2022, the GDP expanded 2.1%
• The Bank of Canada raised the target for its
overnight rate by 25bps to 4.5% in its first
meeting in 2023, as expected by markets, and
signaled the end of its aggressive tightening
cycle should economic developments evolve
broadly with the central bank’s outlook.
• The consumer confidence indicator in the
Euro Area rose by 1.1 points to -20.9 in
January of 2023, the highest since February
2022 on hopes lower energy prices and
recovery fund spending might help avoid a
recession this year.
• The Ifo Business Climate indicator for
Germany rose by 1.6 points from a month
earlier to 90.2 in January 2023, the fourth
consecutive month of increase and the highest
level since June last year.
• The Spanish economy rose 2.7% from a year
earlier in the fourth quarter of 2022, the least
in almost two years, but topping market
forecasts of 2.2%.
• The annual inflation rate in Australia climbed
to 7.8% in Q4 of 2022 from 7.3% in Q3 and
above market forecasts of 7.5%. This was the
highest print since Q1 1990, boosted by rising
costs of food, automotive fuel, and new
dwelling construction.
• Indonesia's foreign direct investments
increased by 44.2% to IDR 654.4 tn or $45.6
bn in 2022, led by inflows to the base metal
($11 bn) and mining ($5.1 bn) sectors. The
biggest sources of funds were Singapore,
China, and Hong Kong. Considering the last
quarter of 2022, FDI jumped by 43.3% year-
on-year to reach a record high of IDR 175.2
trillion or $12.2 bn.
Something to think about
What happened in this past week? Several major
economies released consumer confidence level
data this week, and most regions showed higher
numbers than in previous periods. These regions
include Turkey, Europe Area, Germany as well as
Korea. However, Italy and France indicated lower
consumer confidence levels.
Meanwhile, Indonesia released Money Supply M2
data lower than the previous month. However,
Foreign Direct Investments showed a record high
level for the last quarter. The JCI strengthened for
a second week, mainly driven by the
Transportation & Logistics, Financials, and
Technology sectors.
What might we expect in the Fed’s next meeting?
According to CME FedWatch Tool, there is a 97.7%
probability that the Fed will raise rates by 25 bps in
the February meeting, and the next meeting is
likely to increase rates by another 25 bps, despite
the chance that the Fed may hold rates steady. If
these forecasts are accurate, the Fed’s next
meeting will provide insight into their plans for
interest rates for the subsequent meetings.
The market expects the Fed to hold steady or even
cut rates in the latter half of the year. However,
many Fed policymakers continue to indicate that
rates are likely to be raised above 5% in contrast to
expectations. Economists expect a change in the
Fed’s stance by incoming news, such as China’s
reopening story, which may have global
disinflationary effects.
Based on the historical average in the last five
years, UST10yr = 2.07% and INDON10yr = 3.36%.
Currently, UST10yr = 3.53% and INDON10yr =
4.65% level. This current situation translates into a
buying opportunity for USD bonds as we get closer
to the peak of the interest rates cycle. We
recommend ADUN and ADUFI as yield levels
remain attractive, with current yield levels still
150-200bps higher than the five-year average.
 WEEKLY COMMENTARY 27 JANUARY 2023

Equity Bond
Global Index 5D change (%) 1M change (%) YTD (%) Bond Index 5D change (%) 1M change (%) YTD (%)
Japan 3.1 3.5 4.9 BINDO 1.0 6.5 5.7
Korea 4.9 6.5 11.1 Govt bond 5Y -0.4 0.7 0.7
Hong Kong 5.2 15.8 14.7 Govt bond 10Y -0.7 1.5 1.5
Shanghai 2.2 7.2 5.7 Govt bond 15Y -0.8 2.2 2.0
India -3.1 -2.6 -3.1 Govt bond 20Y -0.6 2.5 2.3
Thailand 0.3 2.4 0.9 US Treasury**
Singapore 3.2 3.9 4.4 UST10Y -0.4
Philippine -0.1 7.4 7.4 UST30Y -0.1
USA - SPX 4.1 6.0 5.8
Euro - SX5E 1.4 8.9 10.1 Reference rate %
Germany 0.8 8.3 8.9 7DRR 5.75
MSCI Asia Pacific ex Japan 1.6 10.1 10.6 Fed Fund rate 4.50

Indonesia Equity Index 5D change (%) 1M change (%) YTD (%) Commodity 5D change (%) 1M change (%) YTD (%)
JCI 1.2 -0.2 0.8 Crude Oil 0.4 2.7 1.7
LQ45 1.3 1.0 1.3 Coal -15.0 -20.8 -22.4
Small Cap 1.3 -0.9 -0.2 CPO -0.1 -5.2 -7.6
Financials 3.0 0.7 0.9 Natural Gas 0.1 -0.5 -2.2
Consumer Non-Cylical 1.1 0.9 2.6 Gold -0.0 6.2 5.6
Basic Material 0.1 2.3 3.8
Infrastructure 0.3 -0.3 -1.3 Currency 5D change (%) 1M change (%) YTD (%)
Industrials 0.5 -0.3 0.4 Indonesia Rupiah 0.6 4.5 3.9
Energy -0.4 -8.1 -4.7 Japanese Yen -0.2 2.8 1.0
Property 1.0 0.4 -0.1 Euro -0.3 -2.3 -1.7
Technology 2.9 6.9 7.3 Chinese Yuan -1.2 2.6 1.7
Transportation 8.4 6.7 7.6 *A gainst US Do llar

Healthcare -2.6 -1.2 -2.3 **New Issuance

Consumer Cylical 1.1 -3.1 -2.7

So urce: B lo o mberg
 WEEKLY COMMENTARY 27 JANUARY 2023

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