Indonesia-US Trade Deal Spurs 10.66% Rally in Jakarta Stock Index, Says Trimegah
Main Takeaways
|
JAKARTA, Investortrust.id — Indonesia’s benchmark stock index has surged 10.66% over the past month, driven primarily by investor enthusiasm surrounding a new trade agreement with the United States, according to Trimegah Sekuritas Indonesia.
The Jakarta Composite Index (JCI) closed at 7,624.25 on Monday, making it the strongest performer among major Asian exchanges. A significant portion of the gains—3.68%—came in the week following the announcement of the bilateral trade pact.
Fakhrul Fulvian, Chief Economist at Trimegah Sekuritas Indonesia, said the agreement helped alleviate market fears over prolonged economic uncertainty.
“Market sentiment is the fastest indicator of how an economic agreement is perceived,” Fakhrul wrote in a research note on Tuesday. “The reduction in trade tariffs from 32% to 19% was enough to steer us away from a worst-case scenario.”
Neutral Trade Impact, But Strategic Shift
While the agreement requires Indonesia to increase imports of American goods, including aircraft and agricultural products, Fakhrul downplayed concerns about a negative impact on the country’s trade balance. The purchases would mainly substitute imports from other suppliers, he said.
“This is a difficult situation,” he noted. “We need to rewire our import structure—from other countries to the United States—as part of this strategic shift.”
Fakhrul emphasized the importance of maintaining strong trade ties with other partners, particularly the European Union, by accelerating talks under the Indonesia-EU Comprehensive Economic Partnership Agreement (EU-CEPA). “Market diversification is critical to ensure that our export momentum remains resilient,” he said.
Three Policy Priorities After the Deal
To sustain the economic gains triggered by the trade pact, Fakhrul advised the Indonesian government to move forward with three key strategies.
“Following the trade agreement, the next steps for economic consolidation include: accelerating government spending and incentive programs; issuing DimSum bonds and Kangaroo bonds in renminbi (RMB) and Australian dollars (AUD) to boost liquidity; and continuing Bank Indonesia’s interest rate cuts,” he explained.
Fakhrul also stressed that Indonesia must continue prioritizing its national interest while ensuring any digital or trade policy shift delivers mutual benefits. “Data is the currency of the future. We must balance national resilience with win-win outcomes in all our trade partnerships,” he concluded.
Stay ahead of market moves with real-time analysis and insights from InvestingPro — now at a special rate for Investortrust readers. Click here to claim your exclusive offer.