Flooring Guide by Cinvex — Jakarta: Despite recent market turbulence, the Composite Stock Price Index (IHSG) is projected to maintain its medium-term upward trajectory toward the 7,300 level following the latest MSCI announcement.
Research analysts from Kiwoom Sekuritas suggest that the market pressure stemming from the removal of several stocks from the MSCI index is less severe than initial investor concerns suggested. Much of the selling pressure had already been priced in over the previous several months.
“The results of the May 2026 MSCI rebalancing appear negative for Indonesia on the surface. However, a closer inspection reveals that the selling pressure is not widespread; rather, it is highly concentrated in a few specific stocks,” noted the Kiwoom Sekuritas Research Team on Sunday (May 17, 2026).
Kiwoom identified PT Dian Swastatika Sentosa Tbk. (DSSA) and PT Barito Renewables Energy Tbk. (BREN) as the primary drivers of this rebalancing pressure. The firm emphasized that more than half of the total MSCI-related selling pressure originated from these two stocks alone.
Furthermore, Kiwoom Sekuritas highlighted that current foreign outflow estimates are now more grounded in reality compared to initial market panic, which had previously projected capital outflows exceeding Rp50 trillion. The research team noted that the year-to-date foreign net sell of approximately Rp49 trillion may not entirely reflect the impact of the MSCI rebalancing. It is likely that a portion of this pressure occurred earlier as global investors began adjusting their positions well before the May 29, 2026, effective implementation date.
Beyond the MSCI factors, the market remains influenced by external headwinds, including the weakening of the rupiah against the US dollar beyond the Rp17,500 mark, geopolitical tensions involving Iran, rising US Treasury yields, and persistent global uncertainty.
Despite these challenges, Kiwoom pointed out several positive catalysts that the market has largely overlooked. Most notably, Indonesia retains its status as an Emerging Market and has successfully avoided a downgrade to Frontier Market status. Moreover, the current index deletions are a global trend rather than an Indonesian anomaly; in the latest MSCI review, 101 stocks were removed globally, while only 49 were added.
In response to the current climate, Kiwoom Sekuritas recommends that investors adopt a wait-and-see strategy until market volatility subsides. The firm estimates that the IHSG has the potential to test support levels between 6,762 and 6,745, with a possibility of closing gaps in the 6,538 to 6,092 range. Meanwhile, the nearest resistance levels are positioned between 6,980 and 7,015.
Looking ahead to the medium term, Kiwoom Sekuritas maintains a target for the IHSG to recover toward the 7,300 level, provided that ongoing capital market reforms continue to yield tangible results.
Disclaimer: This report is for informational purposes only and does not constitute a recommendation to buy or sell any securities. Investment decisions remain entirely at the discretion of the reader. Bisnis.com is not responsible for any gains or losses resulting from investment decisions made based on this information.
Summary
The Composite Stock Price Index (IHSG) is expected to maintain its medium-term recovery toward the 7,300 level despite recent market volatility following the latest MSCI rebalancing. Analysts note that selling pressure remains concentrated in a few specific stocks, such as DSSA and BREN, and that much of this impact was already priced into the market. Furthermore, Indonesia has successfully retained its status as an Emerging Market, avoiding a downgrade despite the global trend of stock index deletions.
While the market faces external pressures, including a weakening rupiah and rising global yields, analysts advise a wait-and-see approach as volatility persists. Investors are encouraged to monitor support levels between 6,745 and 6,762, with the expectation that the market will stabilize as long as ongoing capital market reforms continue. Kiwoom Sekuritas maintains its positive outlook, provided current conditions do not escalate further.