Compact Conglomerate: Storm Passes, Stock Market Rises Again

JAKARTA, KOMPAS — A number of conglomerates who own public companies in the capital market acknowledge the strength of the fundamentals of many issuers amid global pressure. They consider the downward trend (bearish) in the Composite Stock Price Index (IHSG) to be a positive momentum to increase long-term stock investment.

The owners of large companies in the capital market conveyed their views to the media after being invited to a discussion with the Financial Services Authority and the Indonesia Stock Exchange, in Jakarta, Monday (3/3/2025). The rare discussion highlighted the development of the stock market which in recent months has been widely abandoned by foreign investors. The Composite Stock Price Index (IHSG) until the end of trading on that day had corrected 7.9 percent to the level of 6,519 since the beginning of 2025.

Entrepreneurs such as Garibaldi Thohir, for one, admitted that they are still confident in the domestic market even though the majority of stock prices on the stock exchange are plummeting like during the Covid-19 pandemic. According to him, the decline in stock prices was more triggered by sentiment towards the policies of US President Donald Trump, who was re-elected at the end of 2024.

In such conditions, he actually advised investors to buy the well-performing stocks. "Fundamentally, many domestic companies have good fundamentals, cheap value, it's time to buy," said the President Director of PT Alamtri Resources Indonesia Tbk (ADRO), to the media.

Similarly, conglomerate from Sinar Mas Group Franky Oesman Widjaja also admitted to being confident with the fundamentals of public companies in Indonesia. However, there is still a big opportunity for Indonesia to improve company performance and deepen the market on the stock exchange.

"There are still many potentials that we can do, many things that we can do by working together," he said.

In a press conference, Barito Group businessman Agus Salim Pangestu acknowledged that good company fundamentals helped the financial performance of companies under his flag continue to grow positively. "So far we are proud, for the past few years the average has been above 10 percent of our group. So, if we talk about the storm we are feeling now, all storms will be passed. Hopefully all will be calm, so we can get through the storm," he said.

To further support their business growth, the first son of conglomerate Prajogo Pangestu said they would support economic growth of up to 8 percent, in accordance with the target of President Prabowo Subianto's government.

Responding to this view, Chief Economist of PT Bank Central Asia Tbk (BCA) David Sumual, assessed that the majority of the performance of companies listed on the capital market is not reflected in the performance of their share prices.

The companies with the best financial performance are supported by positive trends in many sectors, such as logistics, transportation, communications, packaging, pharmaceuticals, e-commerce or digital economy, plantations (palm oil, chocolate, coffee), fisheries and trade.

"The financial services sector and the food and beverage sector are also still good," David told Kompas, Tuesday (4/3/2025).

However, he assessed that recently there was a potential for a decline in profits and performance for business sectors related to the slowdown in global trade. This is predicted from the contribution of exports of goods and services to economic growth which slowed in 2024, to minus 0.01 percent. Whereas in 2023, exports contributed 0.66 percent to growth.

"However, in general, business performance, especially in the above sectors, is still quite good," he said.

Capital Market Observer Lanjar Nafi, said that stocks with strong fundamentals include large-cap stocks, whose prices have now been significantly corrected. In the future, the stock prices of leading sectors have the potential to rise again due to a number of factors.

The banking sector, for example, could be a prime choice to buy amid falling prices due to the prospect of high dividend yields and better credit growth. This accompanies the potential for Bank Indonesia (BI) interest rate cuts throughout this year.

The telecommunications infrastructure sector, according to him, is also performing well due to massive expansion and an increase in the customer base. The property sector is also prospective because it is supported by the growth of public infrastructure and the potential for a decrease in BI interest rates which can increase property sales prospects.

Furthermore, the energy sector is also considered positive with the prospect of commodity prices remaining strong globally and demand starting to stabilize.