TLDR;
Ellen May discusses the current anomalous conditions in the stock market compared to previous crashes, marked by unusual fluctuations in Big Banks stocks. She also addresses the recent change of Indonesia's Minister of Finance and its potential impact on the market, focusing on investor trust and fiscal policy. She also touches on the 2026 State Budget, highlighting priority programs and financing schemes, including taxation, government bonds, and burden sharing with Bank Indonesia. She concludes by offering investment strategies amid uncertainty, emphasizing common sense, risk anticipation, asset diversification, and trading with money management.
- Unusual stock market fluctuations
- Impact of Finance Minister change
- 2026 State Budget and financing
- Investment strategies for uncertainty
Market Anomalies and Big Bank Stocks [0:03]
Ellen May reflects on her experience navigating various market crises since 2007, noting the current conditions are uniquely anomalous. She points out that traditionally, after a crash, Big Banks stocks recover and lead the market's resurgence, followed by second-tier stocks. However, recently, stocks like BRI have experienced extraordinary fluctuations, with significant ups and downs within short periods. For example, BRI increased by 32% from 2023 to 2024, then dropped 37%, and subsequently rose again by 37% in just a few months. Similarly, BCA shares, typically trusted by large investors, have shown unusual behavior, increasing by 32% on April 8th but then declining again by 22%, almost returning to their previous low.
Socio-Political Uncertainty and the Change of Finance Minister [5:35]
Ellen May addresses the significant socio-political uncertainty affecting the market, both in Indonesia and the United States. She considers the recent cabinet reshuffle, particularly the replacement of Finance Minister Sri Mulyani, as a major change. Foreign investors reacted by net selling BCA shares by 1.25 trillion, driven by concerns about increasing uncertainty in Indonesia. She emphasizes that the change of Finance Minister is almost as important as the change of national leader due to its impact on future economic movements.
Sri Mulyani vs Yudi - Backgrounds and Credibility [7:16]
Ellen May compares the backgrounds of former Finance Minister Sri Mulyani and the new Minister, Mr. Yudi. Sri Mulyani is known for her credibility and is seen as a pure technocrat trusted across presidential administrations, with a strong academic background from the University of Indonesia and the University of Illinois. In contrast, Mr. Yudi has a background in engineering from ITB and economics from an American university, with experience as an economist and director in mutual funds, as well as a commissioner in Inalum or Mind ID. While Sri Mulyani is recognized as a reformist with high integrity, Mr. Yudi is closer to political figures like Luhud Binsar Panjaitan and is seen as having a strong technical basis combined with a political network.
Initial Market Reaction and Mr. Yudi's Statements [12:03]
Ellen May notes that Mr. Yudi's initial statements have been aimed at calming the market. He acknowledged the current economic slowdown, citing data from BPS showing growth of 5.12%, and recognized signs of this slowdown from May to August 2025. Despite this, he expressed optimism that the situation would improve in the next three months. She interprets his pro-market language as a strategy to reassure investors, emphasizing that the government has sufficient fiscal instruments and capacity to improve the situation.
2026 State Budget and Priority Programs [16:06]
Ellen May discusses the 2026 State Budget, focusing on eight priority programs with the largest expenditures. These include quality education (757.8 trillion), energy and new renewable energy, free nutritious food (335 trillion), health (244 trillion), village cooperative economy (83 trillion), food security (4.4 trillion), modern defense, and global investment or sovereign wealth fund (estimated 600 trillion). She examines these programs from two perspectives: their impact on the Indonesian economy and their potential for stock market players. She notes that profiting from these programs involves identifying which stocks are linked to government initiatives, such as Java for free nutritious food tenders and UNTR for waste-to-energy projects.
State Financing Schemes: Taxes, Bonds, and Burden Sharing [20:12]
Ellen May explains how the state plans to finance these priority programs, which account for nearly 50% of the 2026 State Budget expenditure. The financing schemes include increasing taxes by 13.5% to 2.367 trillion, issuing new government bonds (SBN) and loans totaling Rp781.9 trillion, and implementing fiscal innovation through Patriot Bonds. She also addresses the concept of burden sharing, where Bank Indonesia buys government SBN to channel money to the public, which has a similar effect to printing money and can potentially lead to inflation and pressure on the rupiah exchange rate.
Investment Strategies Amid Uncertainty [27:44]
Ellen May provides investment strategies to navigate the current uncertainty. She advises investing with common sense, being prepared for surprises, and anticipating worst-case scenarios. She emphasizes the importance of asset diversification, recalling the economic crisis of 1998 and suggesting investors know which assets tend to rise during such times. She also touches on trading, reminding listeners that it is at the top of the investment pyramid and requires careful money management.
Potential Sectors: Gold and Cigarette Stocks [33:21]
Ellen May identifies potential sectors for investment amid the current conditions, highlighting safe-haven assets like gold. She mentions several issuers related to gold, such as Antam, Arci, BRMS, cuan, Harta, MDKA, PESAP, and UNTR, noting their upward trends. She also discusses cigarette stocks, which have seen price increases following the change in Finance Minister, speculating that this may be due to hopes that cigarette excise taxes will not increase further. However, she cautions that this sentiment may be temporary, given the government's need for revenue to finance its programs.
Analysis of Gold Stocks and MDKA's IPO [35:34]
Ellen May provides a detailed analysis of several gold stocks, including Antam, Arci, BRMS, and HRTA, discussing their financial performance and potential entry points for trading. She notes that while Antam's income is only 81% from gold, Arci's is 100%. She also mentions MDKA's upcoming IPO of its subsidiary, PT Merdeka Gold Resources, with a target fund of 2.91 trillion to 4.89 trillion, but expresses her personal preference for not investing in IPO stocks.
Cigarette Sector and Excise Tax Speculation [41:06]
Ellen May discusses the cigarette sector, noting that cigarette stocks responded positively to the change in Finance Minister, with GGRM and HMSP experiencing significant increases. She presents data showing a significant increase in cigarette excise in 2020 and an average annual increase of 10% to 12.5%. She speculates that the market hopes cigarette excise will not increase further under the new Minister. However, she remains cautious, pointing out the large number of workers in the cigarette industry and the potential impact of further excise tax increases.
Concluding Remarks and Investment Advice [44:38]
Ellen May concludes by thanking former Finance Minister Sri Mulyani and expressing hope for the new Minister, Mr. Yudi. She reiterates the importance of diversifying assets, even with cheap valuations like BCA at minus 2 standard deviations. She advises against putting everything into risky assets and emphasizes the need for money management in trading. She also touches on SBN, noting the increased risk of private bonds and advising investors to be realistic and balanced in their approach.