The equity market and the currency have taken a breather over the past few months after the Q2 selloff - but both remain depressed with very weak sentiment, despite the fact that the macro picture looks very much ok. Activity growth is strong, the credit cycle continues to pick up and high-frequency data have rebounded over the summer. Inflation doesn't look particularly concerning, the external balance is stable and the budget is also not a source of particular concern.

In short, we continue to see Indonesia as oversold from a fundamental perspective. On balance we still prefer to wait until (i) the MSCI equity index review is completed and (ii) we get a few more monthly macro data points to confirm the activity trend. But if things continue to look like they do today we could easily be buying again at the beginning of 2027.