Bisnis.com, JAKARTA – The most liquid stocks within the LQ45 index have shown relatively subdued performance compared to their rival, the SMC Liquid index, throughout 2025. Despite facing several challenges, the LQ45 index still holds the potential for a rebound by year-end.
According to Bloomberg data, the most liquid index in Indonesia’s stock market only managed a modest gain of 2.30% year-to-date in 2025. In stark contrast, the index comprising liquid small-to-medium capitalization (small-cap and mid-cap) stocks surged by an impressive 12.42% year-to-date (YtD).
Imam Gunadi, an Equity Analyst at Indo Premier Sekuritas, explained that the performance of this highly liquid index has been held back by a combination of domestic and sectoral pressures. For instance, banking stocks, which are typically major drivers of the index, have registered a lackluster performance.
Illustrating this trend, shares of PT Bank Central Asia Tbk. (BBCA) have corrected by 13.18% YtD, PT Bank Rakyat Indonesia (Persero) Tbk. (BBRI) by 2.94% YtD, and PT Bank Mandiri (Persero) Tbk. (BMRI) by a significant 13.16% YtD.
“The banking sector, as the largest contributor, has experienced a slow recovery due to un cải thiện interest margins. Foreign outflows have also put pressure on big-cap stocks because global investors have not yet returned aggressively to the domestic market,” Imam told Bisnis on Friday, November 21, 2025.
: Second-Tier Stocks Emerge as 2025 Darlings, Outshining LQ45 Stocks
Imam further noted that while the potential for an uptrend in LQ45 stocks exists, any gains are likely to be selective. This implies that only a few specific sectors are poised for strengthening during the remainder of 2025.
Anticipated monetary easing and improved domestic liquidity are seen as potential catalysts for the consumer and telecommunications sectors by year-end. Furthermore, even though the banking sector remains challenged by tight Net Interest Margins (NIM) and higher cost of funds, recovery prospects could open up if liquidity pressures ease.
“Technically, the index is currently in an oversold area, suggesting the potential for a technical rebound during the upcoming window dressing period,” he added.
Echoing this sentiment, Muhammad Wafi, Head of Research at KISI Sekuritas, projected that the upside potential for LQ45 stocks is likely to be limited. This is primarily due to the burden of the banking sector’s fundamental performance, which holds significant weight as a key driver of the index.
He also observed a shift among investors towards small and medium-capitalization stocks, especially as banking shares continue to show sluggish fundamental performance. Moreover, looser global liquidity is not automatically translating into a boost for large-cap stocks.
“Big-cap bank stocks remain weak, marked by declining profits, tight NIMs, and uneven foreign flows. Consequently, an index heavily weighted towards banking will naturally experience a slow recovery,” he stated on Friday, November 21, 2025.
According to Wafi, if banking credit realization improves in the final quarter of 2025 and NIMs are no longer constrained, the prospects for banking stocks will significantly brighten. Additionally, the telecommunications sector has already seen improvements following a moderation in tariff competition. Such developments would make an LQ45 rebound more probable.
Concurring with this outlook, James Widjaja, a Research Analyst at PT Henan Putihrai Sekuritas, highlighted that several recent government stimulus packages and accelerated fiscal spending continue to sweeten the prospects for LQ45-listed companies.
Furthermore, the dividend yield from LQ45 stocks stands at an attractive 5.2%, creating an appealing spread of 70 basis points (bps) above the 4.5% yield of one-year government bonds, a factor likely to draw institutional investors.
“We anticipate macroeconomic conditions to improve in Q4 2025 and beyond, which should drive a recovery in earnings per share,” he remarked on Friday, November 21, 2025.
Disclaimer: This article is not intended as an invitation to buy or sell stocks. Investment decisions are solely at the reader’s discretion. Bisnis.com is not responsible for any losses or gains arising from readers’ investment decisions.
Summary
The LQ45 index has shown relatively subdued performance in 2025, gaining only 2.30% year-to-date, significantly lagging behind small-to-medium capitalization stocks. This underperformance is primarily due to the lackluster showing of major banking stocks, which experienced corrections driven by unimproved interest margins and foreign outflows. Global investors have not yet aggressively returned to the domestic market, further pressuring these big-cap constituents.
Despite these challenges, analysts anticipate a potential LQ45 rebound by year-end, with gains likely to be selective. Anticipated monetary easing and improved domestic liquidity are seen as catalysts for the consumer and telecommunications sectors. While the banking sector faces ongoing pressure, recovery prospects could emerge if liquidity eases and credit realization improves, supported by government stimulus, an attractive dividend yield, and expected macroeconomic improvements in Q4 2025.