Flooring Guide by Cinvex – , JAKARTA – JP Morgan Sekuritas has significantly raised its target for the Composite Stock Price Index (IHSG) to 8,600, a move largely driven by the anticipated return of foreign capital flows into emerging markets. This optimistic forecast from the investment bank highlights renewed confidence in the Indonesian equity landscape.
The JP Morgan Sekuritas analyst team, led by Henry Wibowo, noted that the IHSG has already surged an impressive 27% over the past six months, even hitting an all-time high (ATH) closing position of 8,125. Despite this robust performance, foreign investors have recorded a net sell of approximately US$3 billion. A key factor to monitor currently is the depreciation of the Indonesian Rupiah against the US Dollar, which has neared 2% since Bank Indonesia trimmed its benchmark interest rate.
While JP Morgan Sekuritas maintains a neutral stance on the Indonesian stock market overall, the firm is convinced that a potential resurgence of foreign capital into emerging markets could catalyze a re-rating for Indonesian equities. This conviction is further bolstered by Indonesia’s attractive valuation, which is currently deemed inexpensive compared to historical averages. JP Morgan’s data indicates that the IHSG’s current price-to-earnings (P/E) ratio stands at 12 times, which is 1.5 standard deviations below its 10-year average.
“We are raising our IHSG target with a base case of 8,600 over the next 12 months,” the firm stated in its research report dated Tuesday, September 30, 2025. This new target represents a substantial increase from JP Morgan Sekuritas’ previous projection, which anticipated the IHSG would trade within the 7,500-8,000 range by the end of this year.
In line with this elevated IHSG target, JP Morgan has also updated its projections for several key sectors. The outlook for the industrial sector has been upgraded from neutral to overweight, primarily driven by a corresponding upgrade for PT Astra International Tbk. (ASII). Conversely, the energy sector has seen its rating downgraded from neutral to downgrade, reflecting a subdued outlook for coal demand and supply.
Furthermore, JP Morgan Sekuritas remains overweight on the consumer sector, a position strongly supported by sustained government spending and economic stimulus initiatives aimed at boosting domestic consumption. The firm also favors quality issuers that are primarily focused on the domestic market, identifying stocks such as BBCA, AMRT, ICBP, MAPI, and ISAT as attractive plays. Additionally, GOTO is considered compelling, as its share price is reportedly nearing the Rp50 per share level. Companies sensitive to interest rate cuts, including ASII, CTRA, and PWON, are also highlighted, alongside ANTM as a strategic gold proxy.
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Summary
JPMorgan Sekuritas has significantly raised its Composite Stock Price Index (IHSG) target to 8,600 for the next 12 months, citing the anticipated return of foreign capital flows into emerging markets and Indonesia’s attractive valuation. Despite the IHSG’s recent 27% surge and an all-time high, foreign investors have recorded net sales of approximately US$3 billion, and the Rupiah has depreciated. The firm’s analysis indicates the IHSG’s current price-to-earnings ratio of 12 times is below its 10-year average.
While maintaining a neutral overall stance on the Indonesian market, JPMorgan anticipates a re-rating for equities with a resurgence of foreign capital. The industrial sector has been upgraded to overweight, driven by PT Astra International Tbk. (ASII), while the energy sector was downgraded due to a subdued coal outlook. The firm remains overweight on the consumer sector, favoring domestic-focused quality issuers like BBCA, AMRT, ICBP, MAPI, and ISAT, and also highlights GOTO, interest-rate sensitive stocks, and ANTM as a gold proxy.