Research

IHSG: All Eyes On Commodity

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Algo Research Team

Market | Sep 06, 2023 | Views: 90

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Key Summary:

  • Barbell strategy: Commodity & Healthcare; Negative on Consumer
  • Large outflows from foreign, but local inflows prevail
  • Market trajectory depends on the commodity sector

Few weeks ago, we published our positive call on commodity specifically (Coal: Laggards With Momentum) as we suspect inflation outlook to accelerate, China bottoming, light positioning by institutional investors, while earnings downgrade are largely priced-in. Subsequently, we think (Healthcare: Defensive With Better Outlook) could be added as a good pair for barbell strategy as it is defensive amid cyclical slowdown where we are negative on consumers (Consumption: Structurally Weak & Bearish).


We remain tactical as we see commodity as the only sector that could propel IHSG for now, while big caps could be a drag if flows reversed. The downside risk for commodity stocks is mainly domestic sentiment specifically if we see share price correction in several big-caps names like AMMN that could create selling pressure. Watch this name very closely as its upside looks limited. Domestic political landscape is getting more clarity that could be supportive for markets in 4Q23.

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