JAKARTA – The Indonesian stock market has witnessed a significant shift in foreign capital, leading to a robust performance of second-tier stocks on the Development Board, even as Main Board large-cap stocks experienced a more subdued year-to-date showing in 2025.
Data from the Indonesia Stock Exchange (IDX) on Tuesday, August 26, 2025, revealed a striking contrast: the Development Board soared by an impressive 77.28% year-to-date (YtD). In stark comparison, the Main Board, home to some of the country’s largest companies, managed a modest gain of only 4.46% YtD.
Ekky Topan, an Investment Analyst at Infovesta Utama, attributed the sluggish performance of Main Board stocks primarily to a substantial outflow of foreign funds. As of yesterday’s trading session, foreign investors recorded a net sell of Rp49.33 trillion YtD in 2025. This significant withdrawal has led to a noticeable decline in liquidity for large-capitalization stocks. Furthermore, the already high valuations of many Main Board stocks have made investors more cautious about committing capital to them.
“This situation has ultimately driven a rotation of investors towards second-liner stocks, which are perceived as more prospective for delivering rapid growth and short-to-medium-term profits,” Ekky told Bisnis on Wednesday, August 27, 2025.
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Meanwhile, stocks on the Development Board present a distinct appeal. Ekky noted that their relatively smaller market capitalization fosters more dynamic price movements. Additionally, the surge in their performance is significantly driven by commodity-based issuers, which have benefited from strong global commodity prices. The government’s strategic shift towards renewable energy sources (EBT) has also provided a substantial boost to issuers with narratives focused on renewable energy, downstream processing (hilirisasi), and technology.
However, Ekky cautioned against over-optimism, stating, “The trend of euphoria usually cannot last forever. A return of foreign funds to big caps has the potential to shift domestic interest back from the Development Board to the Main Board.”
Echoing this sentiment, Oktavianus Audi, an analyst at Kiwoom Sekuritas, highlighted that one of the key drivers behind the Development Board’s robust performance is the surge in commodity prices. This has significantly boosted the financial results of issuers closely correlated with commodities like CPO (Crude Palm Oil) and gold.
A prime example is gold mining company PT Archi Indonesia Tbk. (ARCI), which saw its share price skyrocket by 186.29% YtD. This impressive stock appreciation aligns with the company’s strong fundamentals, having successfully turned profitable in the first half of 2025.
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Similarly, PT Sinar Mas Agro Resources and Technology Tbk. (SMAR) reported a net profit of Rp825.38 billion for the January-June 2025 period. The palm oil issuer’s net profit surged by a remarkable 94.97% from Rp423.33 billion recorded in the same period last year.
“We believe that the strengthening of issuers driven by capital expenditure optimization for expansion and increased commodity demand will positively impact sustained stock price appreciation,” Audi remarked.
Despite the current positive momentum, Audi believes the potential for weakening performance in second-tier stocks remains. This could materialize if the government delays monetary policy easing or if domestic macroeconomic instability, such as a slowdown in GDP growth or fluctuations in the rupiah, occurs.
In this market environment, Audi recommends a trading buy for several stocks: WIFI with a target price of Rp3,500 per share, PANI with a target price of Rp17,000, and ARCI with a target price of Rp820.
Meanwhile, Ekky recommended PT Aneka Tambang Tbk. (ANTM) with a target price of Rp3,500–Rp3,600, PT Merdeka Battery Materials Tbk. (MBMA) which is predicted to reach Rp500, and PT Pertamina Geothermal Energy Tbk. (PGEO) with a long-term prospect level of Rp1,800–Rp2,000. For the property sector, Ekky suggested CTRA, BSDE, and SMRA as potential choices, citing the positive momentum in the sector following interest rate reductions.
Disclaimer: This article is not intended to solicit the purchase or sale of stocks. Investment decisions are solely at the discretion of the reader. Bisnis.com is not responsible for any losses or gains arising from the reader’s investment decisions.
Summary
The Indonesian stock market has experienced a significant shift in 2025, with foreign investment driving a robust rally in second-tier stocks on the Development Board. These stocks surged by an impressive 77.28% year-to-date, a stark contrast to the Main Board’s modest 4.46% gain. This disparity is primarily due to a substantial outflow of foreign funds from large-capitalization stocks and their already high valuations, leading investors to seek rapid growth potential in second-liner companies.
The strong performance of Development Board stocks is fueled by their dynamic price movements, smaller market capitalization, and the success of commodity-based issuers benefiting from strong global prices. Government strategic initiatives in renewable energy, downstream processing, and technology have further boosted these companies. However, analysts caution that this euphoric trend may not last, as a potential return of foreign funds to large-cap stocks or domestic macroeconomic instability could shift market interest.