Flooring Guide by Cinvex – JAKARTA – The Indonesian Composite Stock Price Index (IHSG) is exhibiting significant momentum as the year-end approaches. In fact, the IHSG has surged an impressive 10.14% over the past three months, fueled by a robust inflow of foreign capital into the country.
According to data from the Indonesia Stock Exchange (BEI), the IHSG advanced by 0.30% to 8,300 at 11:29 AM Western Indonesia Time (WIB) on Tuesday, November 4, 2025. This recent boost contributes to a remarkable 10.14% gain over the last three months, bringing its year-to-date performance to an outstanding 17.26% surge.
Foreign investors are increasingly flocking to the Indonesian stock market. In October 2025 alone, non-resident investors recorded a net buy of shares amounting to Rp12.8 trillion. This substantial net inflow has significantly reduced the year-to-date foreign capital outflow to Rp40.75 trillion.
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Liza Camelia Suryanata, Head of Equity Research at Kiwoom Sekuritas Indonesia, believes the IHSG is poised to continue its upward trajectory through the remainder of 2025 and into early 2026. This positive outlook is primarily driven by factors such as index rebalancing, seasonal “window dressing” effects, and more attractive valuations among big-cap stocks. However, she notes that the market is not yet fully confident to make aggressive moves, as two lingering concerns cast a shadow.
“For a bullish scenario, we anticipate moderate inflows into Book IV banks, telecommunications, and consumer staples,” Liza shared with Bisnis, as quoted on Tuesday, November 4, 2025.
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She further projects that the IHSG has the potential to test psychological resistance levels by year-end, followed by healthy consolidation in early 2026 as the market awaits clarity on MSCI’s planned reweighting.
Conversely, a second scenario suggests a potential slowdown or neutral movement for the IHSG. Liza explains this could materialize if investors grow wary of outflow risks from stocks with complex ownership structures, such as cross-group holdings. Such concerns could lead to increased market volatility.
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Should this scenario unfold, capital flows are likely to rotate towards stocks characterized by clean free floats, substantial liquidity, and robust corporate governance.
Nevertheless, the potential for an IHSG slowdown in late 2025 may be mitigated by the phenomenon of “window dressing.” Simply put, window dressing refers to the practice where investment managers or large institutions enhance their portfolios towards the end of the year, which can effectively boost the IHSG.
“There’s a high probability it will cushion the downside, but its effect won’t be uniform,” Liza remarked. “Historically, domestic institutions tend to increase their positions in highly liquid stocks that demonstrate solid operational performance.”
According to Liza, the impact of this window dressing is most effective on stocks included in major indices, possessing clean free floats, and having a clear pipeline of catalysts for the beginning of the year. Conversely, this phenomenon proves less effective for stocks grappling with regulatory issues or complicated ownership structures.
Considering these market dynamics, Liza has categorized stocks into three groups: those recommended for greater accumulation (overweight), those categorized as neutral-selective, and those suggested for reduction (underweight).
“The overweight category includes large banks like BBRI, BMRI, and BBNI, recognized for their liquidity, earnings visibility, and role as shock absorbers for capital flows. Meanwhile, telecom/digital infrastructure stocks such as TLKM offer defensive qualities and strong cash flow. Furthermore, consumer staples stocks could be a viable option, benefiting from seasonal momentum and pricing power,” Liza elaborated.
For the neutral-selective group, Liza identifies multi-sector conglomerates with strong governance and proactive market communication regarding their ownership structures. An example includes property issuers demonstrating robust sales and healthy balance sheets.
Finally, the underweight category, according to Liza, comprises stocks with low free floats, layered ownership, and high leverage. She advises reducing exposure to these until there is greater clarity on MSCI’s free float calculation methodology.
Disclaimer: This news article is not intended to solicit the buying or selling of stocks. Investment decisions rest solely with the reader. Bisnis.com is not responsible for any losses or gains arising from the reader’s investment decisions.
Summary
The Indonesian Composite Stock Price Index (IHSG) has shown significant momentum, surging 10.14% in the past three months and 17.26% year-to-date by November 4, 2025. This growth is largely fueled by robust foreign capital inflows, with non-resident investors recording a net buy of Rp12.8 trillion in October 2025 alone. Liza Camelia Suryanata, Head of Equity Research at Kiwoom Sekuritas Indonesia, anticipates the IHSG will continue its upward trajectory into early 2026, driven by factors such as index rebalancing, “window dressing” effects, and more attractive valuations among big-cap stocks.
The “window dressing” phenomenon is expected to cushion any potential market slowdowns, as domestic institutions historically increase positions in liquid, operationally sound stocks. Liza recommends an “overweight” stance on large banks (BBRI, BMRI, BBNI), telecom/digital infrastructure like TLKM for defensive qualities, and consumer staples due to seasonal momentum. Conversely, stocks with low free floats, layered ownership, and high leverage are categorized as “underweight,” advising reduced exposure until greater clarity emerges on market methodologies.