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Awaiting the Banking Sector Rebound Momentum

Over the past few weeks, capital market enthusiasm has returned.
The IHSG has moved higher, with some commodity sector stocks even experiencing an impressive rally.

Yet amid this rise, many investors are actually wondering:
"Why are major bank stocks tending to decline when the index is strengthening?"

This question is fair. But let us discuss this phenomenon more objectively, through the lens of macroeconomics and sector rotation.

Big Banks: Pillars of Growth in Emerging Markets
As an emerging market, Indonesia is highly dependent on capital inflows, particularly from abroad. This is where the role of major banks becomes crucial. They are the primary channels distributing these funds into productive sectors through credit distribution.

Major momentum occurred in 2023–2024, when credit extended during the recovery period began generating interest and instalment payments. This drove extraordinary profit growth, reflected in the share prices of big banks such as BBCA, BBRI, BMRI, and BBNI which reached their peak levels.

However, like the wheel of the economy that keeps turning, such conditions cannot last forever. And this is where sector rotation begins to take place.

Understanding Sector Rotation and Economic Phases

Currently, Indonesia is estimated to be in a transition phase from late recession towards early expansion. In such a cycle, sectors such as commodities, energy, and basic raw materials typically become the early leaders of recovery.

The banking sector? Still important, but not the focus of attention right now.
Global institutional investors apply the same principle, not because they lack confidence in banks, but because they understand where the economy stands and which sectors are most relevant to that phase.

So, When Will Banking Shine Again?

The answer is: no one can say for certain yet.
But what is certain is that the cycle will always turn. There will come a time when banking becomes a leading sector again, especially when economic expansion drives broader credit growth.

For this reason, rather than avoiding this sector, we believe a wiser approach is to prepare early with a gradual and measured strategy.

A More Practical Strategy: Mutual Funds with Banking Exposure

If you want to start building a position in the banking sector without having to pick individual stocks, there is a simpler and more diversified approach:
Investing in mutual funds based on banking indices and undervalued stocks.

One example product to consider is:

Syailendra MSCI Indonesia Value Index Fund (SMSCI)
An index mutual fund that tracks the MSCI Indonesia Value Index, which comprises undervalued stocks with strong fundamentals, including several major banks such as BBCA, BBRI, and BMRI.
SMSCI is designed to reflect the performance of sectors that are currently