Flooring Guide by Cinvex – JAKARTA – The prospects for company profit growth in the second half of 2025 are poised for a positive trajectory, driven by two recurring annual catalysts typically observed as the year draws to a close.
Capital market observer Reydi Octa highlighted that a surge in public purchasing power, anticipated ahead of the year-end holiday season, is expected to significantly boost consumption activity. Complementing this, an uptick in the construction and logistics sectors will further bolster the performance of various issuers. “These factors are set to propel the performance of related stocks, particularly within the consumer, automotive, and construction sectors,” Octa informed Bisnis, as quoted on Friday (September 5, 2025).
Beyond these seasonal sentiments, Reydi Octa added that a prevailing trend of declining interest rates and the stability of the rupiah exchange rate will serve as additional positive catalysts. According to him, this powerful combination of increased demand and reduced production costs holds the potential to significantly elevate the profit growth of numerous listed companies.
Consequently, issuers operating in the consumer goods, automotive, and construction sectors are projected to report robust profit growth through the end of 2025. These sectors are strategically positioned to capitalize on the anticipated economic tailwinds and favorable market conditions.
However, the domestic capital market remains under the shadow of persistent foreign fund outflows, which have weighed down large-capitalization stocks since the beginning of the year. This ongoing divestment has exerted downward pressure on the prices of big-cap shares, which have notably weakened throughout the period.
“With the emergence of these positive catalysts, the Jakarta Composite Index (IHSG) has the potential to rebound towards the year-end. Nevertheless, this rebound will heavily depend on domestic political stability and the future direction of interest rate policies,” Octa emphasized.
Earlier, Senior Market Chartist at Mirae Asset Sekuritas, Nafan Aji Gusta, acknowledged that foreign fund outflows indeed continued into early September. However, he noted that the current stable security and political situation has now become a crucial positive catalyst for market sentiment.
Furthermore, if the Federal Reserve opts to cut its benchmark interest rate, it would significantly enhance liquidity in global financial markets. This reduction in borrowing costs would also foster a positive sentiment towards risk assets in emerging markets, including Indonesia, by making them more attractive to investors.
Concurrently, Nafan suggested that Bank Indonesia (BI) is expected to mirror the Fed’s actions by maintaining a monetary policy supportive of growth. The potential for the BI Rate to be cut one to two more times before the year’s end is still considered a strong possibility, further stimulating the economy.
Domestically, the accelerated realization of government spending will provide an additional stimulus, crucial for maintaining growth momentum amid ongoing uncertainties. This proactive fiscal approach aims to inject vitality into various economic sectors.
“The combined effect of accelerated government spending and monetary stimulus is anticipated to sustain national economic stability at approximately 5% throughout 2025,” Nafan projected. These fundamental supports are expected to reinforce investor confidence.
In line with these catalysts, issuer performance is also predicted to improve significantly in the second half of 2025. More progressive profit projections will serve as an additional catalyst, enticing a renewed inflow of foreign funds into the domestic stock market.
Supported by these underlying fundamentals, the Jakarta Composite Index (IHSG) is expected to maintain an upward trend, or ‘uptrend,’ until the end of the year, signaling a period of recovery and potential growth for the Indonesian capital market.
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Summary
Indonesia’s stock market anticipates a positive second half of 2025, driven by expected increases in public purchasing power and growth in construction and logistics sectors. These factors are projected to significantly boost company profits, particularly for consumer, automotive, and construction sectors. Furthermore, declining interest rates and a stable Rupiah are enhancing this outlook by reducing production costs and stimulating demand.
Despite persistent foreign fund outflows impacting large-capitalization stocks, the Jakarta Composite Index (IHSG) is expected to rebound towards year-end, contingent on domestic political stability and interest rate policies. Experts also highlight potential Federal Reserve and Bank Indonesia rate cuts, along with accelerated government spending, as crucial stimuli. These combined factors are projected to sustain national economic stability, attract renewed foreign funds, and maintain an upward trend for the IHSG.