JAKARTA — The Indonesian stock market has witnessed a significant surge in foreign capital inflows over the past month. A key question for investors and analysts alike is whether this robust foreign interest can be sustained until the end of the year.
According to data from the Indonesia Stock Exchange (IDX), while the Indonesian stock market recorded a net foreign sell of Rp114.96 billion on Thursday, November 6, 2025, this minor outflow stands in contrast to a substantial net foreign buy of Rp15.45 trillion over the last trading month.
Foreign investors have notably targeted several prominent stocks. PT Bank Central Asia Tbk. (BBCA) emerged as a top pick, attracting a net foreign buy of Rp3.43 trillion within the month. Following closely were PT Telkom Indonesia Tbk. (TLKM) with a net foreign buy of Rp1.88 trillion, and PT Astra International Tbk. (ASII), which saw Rp1.5 trillion in net foreign buying during the same period.
Adding to this positive trend, foreign investors collectively recorded a net buy of Rp12.96 trillion in October 2025, marking one of the largest monthly net purchases of the year. This significant inflow has helped alleviate the year-to-date (YTD) net foreign sell pressure, reducing the total YTD outflow to Rp39.24 trillion.
Imam Gunadi, an Equity Analyst at PT Indo Premier Sekuritas, attributes this influx of foreign capital into emerging markets, including Indonesia, to the impressive performance of the Composite Stock Price Index (IHSG). The IHSG has repeatedly hit all-time high (ATH) closing records, signaling strong investor confidence.
Most recently, the IHSG achieved another historic ATH closing level of 8,337.06 during trading on Thursday, November 6, 2025.
Gunadi emphasizes that the sustained foreign capital inflow into the Indonesian stock market is inextricably linked to improvements in the nation’s domestic economic fundamentals.
“Indonesia’s economic growth in the second and third quarters of 2025 surpassed consensus expectations, even amidst a global economic slowdown. This clearly underscores the solid economic momentum and resilient public purchasing power,” Imam told Bisnis on Thursday, November 6, 2025.
The Central Statistics Agency (BPS) recently reported that Indonesia’s economic growth for the third quarter of 2025 reached 5.04% year-on-year (YoY), exceeding analysts’ prior projections. A Bloomberg survey of 30 economists had projected a median economic growth of 5% YoY for Q3 2025. This figure represents an increase from the 4.95% YoY growth in the same period last year but a slight deceleration from 5.12% in the preceding quarter.
Further bolstering confidence, Indonesia’s Manufacturing PMI has remained in the expansive territory, above the 50-point mark, for three consecutive months. This sustained expansion signifies a healthy increase in demand and enhanced production capacity. “This favorable condition is also reinforced by supportive government policies, including the distribution of approximately Rp200 trillion in stimulus through the banking sector, acting as a potent economic booster,” Imam added.
Additionally, Bank Indonesia (BI) has implemented five interest rate cuts throughout the year, fostering a more accommodative monetary environment. “Consequently, the foreign capital inflow and the strengthening of the IHSG are aligned with robust economic foundations, rather than being solely driven by short-term sentiment,” Imam concluded.
Looking ahead, Imam suggests that as long as trade tensions between US President Donald Trump and Chinese President Xi Jinping remain conducive, there is a strong potential for continued foreign capital inflows into the domestic market. “Towards the end of 2025, the market could also gain additional catalysts from the reallocation of the government’s 8+4+5 stimulus package, which is expected to maintain Indonesia’s economic recovery momentum,” he explained.
Nafan Aji Gusta, Senior Investment Information at Mirae Asset Sekuritas, also anticipates that the strong trend of foreign capital inflows observed over the past month, particularly in October 2025, will persist through year-end.
“Furthermore, there are expectations of the ‘window dressing’ phenomenon and the ‘Santa Claus rally.’ The IHSG could therefore continue its bullish trajectory. Historically, November and December are bullish months, a trend that often extends into January of the following year,” Nafan told Bisnis on Thursday, November 6, 2025.
He elaborated that “window dressing” refers to the strategy employed by investment managers to enhance their portfolio performance before reporting to investors, while the “Santa Claus rally” describes the common trend of rising stock prices during the last week of December.
Several government fiscal stimulus policies are also set to bolster economic growth. Alongside these, corporate actions by issuers, such as share buybacks, and the market’s appreciation for Q3/2025 issuer performance contribute to the positive outlook. On the global front, conditions remain relatively conducive, with the Federal Reserve implementing a loose monetary policy and the sentiment surrounding Trump’s tariff policies having subsided.
Disclaimer: This news article is not intended as an invitation to buy or sell shares. Investment decisions rest entirely with 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 recently seen significant foreign capital inflows, with a net foreign buy of Rp15.45 trillion over the last month and Rp12.96 trillion in October 2025. This surge has propelled the Composite Stock Price Index (IHSG) to all-time highs and helped mitigate year-to-date foreign sell pressure. Analysts attribute these inflows primarily to Indonesia’s strong domestic economic fundamentals, including better-than-expected Q3 2025 economic growth and a consistently expansive Manufacturing PMI. Furthermore, supportive government stimulus packages and five interest rate cuts by Bank Indonesia have fostered a favorable investment environment.
Experts anticipate this strong trend of foreign capital inflows will continue through the end of the year, driven by factors such as the “window dressing” phenomenon and the “Santa Claus rally.” Historically, November and December are often bullish months for the market. Additional catalysts include ongoing government fiscal stimulus, positive corporate actions, and a relatively stable global economic landscape. These combined elements suggest a sustained positive outlook for the Indonesian stock market.