Monthly Market Summary December 2024

The U.S. labor market shows a strengthening trend, where nonfarm payroll increased by 256,000 in December 2024, with the average hourly earnings of U.S. workers increasing by 0.3% in December 2024. With the strength of the US economy, the Fed is expected to maintain interest rates in the first half of 2025. Domestic economic growth is expected to remain strong at above 5% in 2025. On the other hand, foreign exchange reserves are also still quite high in level of USD 155.7bn, and the Current Account Deficit also remains below historical trends. From the Indonesian bond market side, we maintain our BUY recommendation where we estimate that Indonesian government bonds will strengthen with the yield on 10 year government bonds weakening to the level of 6.4-6.8% in 2025. From the domestic stock market side, we maintain our BUY recommendation on the Indonesian stock market, with increasing investment potential in blue chip shares as well as several issuers with quality profit growth.