The continued geopolitical tensions in the Middle East and the new trade tariff from the US give higher potential for global supply chain disruptions to impact Indonesia's capital markets. Following Israel’s large-scale attack on Iran on June 13, 2025, the Jakarta Composite Index (IHSG) declined by approximately 3.5% to 5% from the 7,166 level. Market uncertainty surged, making stock movements increasingly difficult to predict. Although the IHSG rebounded and returned to positive territory in July 2025, lingering uncertainties continue to weigh on investor sentiment. In such a volatile environment, what steps should investors consider taking?
In the world of stock investing, there are two main approaches typically used: fundamental and technical. The fundamental approach focuses on analyzing market factors that influence a stock's performance and value in the long term. There are two common methods: (1) Top-down approach – begins with an analysis of macroeconomic conditions, such as monetary policy, domestic political stability, and global geopolitical dynamics. From there, investors identify sectors or industries that are likely to perform well under current conditions, and then select companies within those sectors that have the strongest growth potential. The company’s financials—balance sheet, income statement, and capital strength—are critical in the final selection, and (2) Bottom-up approach – starts with selecting companies with strong fundamentals. The next step is analyzing how their respective industries operate, followed by assessing the impact of macroeconomic conditions on the company’s long-term performance.
In contrast, the technical approach relies on historical price and trading volume patterns to project future stock price movements. Popular techniques in this method include moving averages and the Relative Strength Index (RSI). Technical analysis is typically used to determine the right timing for buy or sell decisions.
Back to Fundamentals
In extraordinary situations such as armed conflict dan changes in trade tariffs projecting corporate performance becomes far more uncertain. This often triggers a risk-off response from market participants, who tend to withdraw funds from risky assets. During the first half of 2025, foreign investors recorded a net sell of Rp 53.2 trillion. Amidst this instability, returning to strong fundamental analysis—whether through a top-down or bottom-up approach—remains the most prudent strategy. A deep and objective understanding of both macroeconomic conditions and company performance is key.
Bank Indonesia recently revised its 2025 GDP growth projection for Indonesia to 4.6%–5.4%, down from 4.7%–5.5%, following weakening global demand and lackluster performance in the first quarter. Even so, this figure remains higher than the International Monetary Fund’s (IMF) global economic growth projection of just 2.8%.
Looking more closely, household consumption growth in Q1 2025 was recorded at 4.89%, slightly above the national economic growth rate of 4.87%. This indicates that maintaining consumer purchasing power is essential, as household consumption is the main contributor to national GDP.
To support this, the government has rolled out five stimulus packages: food and staple assistance, wage subsidies, transportation subsidies, toll fee subsidies, and discounts on occupational accident insurance premiums. These policies are expected to help push economic growth in Q2 closer to 5%. Given the resilience of Indonesia’s economy and the government’s proactive stance in managing potential economic shocks, is it really necessary for investors to worry excessively?
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So, how can investors gain sharp and trustworthy insights before making investment decisions?
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