The Composite Stock Price Index (IHSG) is strategically positioned to achieve new high levels over the next 12 months, driven by a notable shift in investor sentiment. Hans Kwee, Co-Founder of PasarDana and a respected capital market analyst, observes a growing inclination among foreign investors to reallocate their focus towards the equity market.
“This represents a significant opportunity for our stock market, indicating strong potential for capital inflow into equities,” Hans elucidated during an online BEI Journalist Education event held on Friday, January 23. He further cautioned, “However, this enthusiasm for stocks might simultaneously lead to capital outflow from our Indonesian bonds.”
Kwee identifies a key apprehension for foreign investors: the escalating state budget deficit. This situation could pressure the government to issue a greater volume of bonds, a move that would directly influence bond yield dynamics. Consequently, given that Indonesian bond yields have historically resided at relatively lower levels, they are now poised for an upward adjustment.
IHSG Targets 10,000
Looking beyond the immediate future, Hans Kwee foresees potential pressure on issuer performance in 2025. However, he projects a substantial market improvement by 2026, largely contingent on the anticipated recovery of public purchasing power. “The stock market landscape will be exceptionally robust in 2026, propelled by the underlying factors I’ve previously outlined,” Hans affirmed, underscoring the interconnectedness of economic recovery and market strength.
In his comprehensive outlook, Kwee estimates the IHSG is set to advance towards the 10,000 mark within the upcoming 12 months. This projected upward trend, however, is expected to be characterized by considerable volatility, potentially experiencing sharp fluctuations that could see the index dip to 7,500 in a bear-case scenario. Despite these anticipated movements, the overall direction for the IHSG remains resolutely bullish, reflecting a dynamic and evolving market environment.