Jun. 5 at 1:08 AM
PickAlpha Midday:
Indonesia is no longer trading like a standard EM beta story — it is trading like a credibility story gone wrong. Reuters reports Jakarta just expanded the central bank’s role in ways that unnerved investors, while the government is also centralizing strategic commodity exports under a new state-linked structure tied to Danantara.
Tickers:
$EIDO $FXI $EPHE
Our view is this is not just “sell Indonesia” because oil is high or EMs are weak. It is a repricing of policy risk: once investors start questioning central-bank independence, export rules, and the direction of state intervention at the same time, local equities, bonds, and the currency can all cheapen together for longer than valuation alone would suggest.
Read more on our Substack.