December 26, 2024
December Without Santa Claus Rally

Market Commentary
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December 2024 may become the second time in the past 20 years where the JCI has recorded a negative MoM performance for December.

The majority of December MoM changes for the JCI are positive, often reflecting a seasonal trend where markets rally due to the "year-end effect."

Based on the negative figure displayed for December 2022 and 2024 (highlighted in red in the chart), this month is set to fail a new streak of December gains.
 
JCI Heatmap Performance


We believe this happened due to several factors such as:
* Global or Regional Market Factors: Broader market concerns, such as rising interest rates or geopolitical risks, may weigh on sentiment.
US 10 Year Treasury Yield


* Domestic Economic Pressure: Factors like subdued purchasing power, fiscal tightening (e.g., VAT hikes), or tax policies could dampen local investor confidence.
 Retail Sales Index


* Sectoral Weakness: Key sectors like automotive or financials, which have faced challenges in 2024, may fail to drive the usual rally.
ASII and IDX Finance Index Performance


This deviation from the historical trend is significant as it suggests potential shifts in investor behavior or external pressures affecting the JCI's year-end dynamics.

That being said, this doesn't mean that there's no stocks that we can go long into.

Align with our recent strategy, regardless of the unresolved global turmoil, we urge investor to stick to US Dollar earner, and in this case, energy stocks.

The first reason is that we believe that the US Dollar may continue to strengthen against Rupiah even with the rate cut that may still happen in the future. Currently USD IDR exchange rate still trades above IDR 16,200 per USD.

USD IDR Exchange Rate
 

Aside from Rupiah's depreciation risk, we also see that energy stocks can hedge the risk of Middle East tension escalation which may send energy prices through the roof.

Therefore, we reiterate our buy call on ENRG, AADI and TPMA with TP of IDR 720, IDR 30,100 and IDR 1,200, respectively.

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