Domestic focus : lesson learnt from recent macro trends
Key Takeaways :
• We identify 7 domestic macro trends throughout 2022, they are : 1) recovery momentum continued in 3Q22; 2) volatile food prices drop help to lower inflation in Oct-22; 3) IDR experiences a persistent pressure from Fed aggressive rate hikes; 4) risk of FX liquidity dry-up that needs to be anticipated; 5) policy makers aims to have a soft landing strategy through pro-growth, pro-stability policy; 6) equity & government bond market continued to diverge; 7) a more resilient corporate bond market.
• Our guidance : IDR may still continue to depreciate further as commo prices slowing and stability depends on how BI manage narrowed nominal interest rate differential. We recommend to stay defensive amidst highly volatile market by focusing on companies that have ample liquidity. Recent trend may revert next year with banking taking a more conservative guidance on LDR and lower coal price possibly trigger revenue contraction for FY23F.
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