BI Support Lifts Indonesian Equities for 3rd Session

Indonesian stocks rose 40 points, or 0.7%, to 5,367 on Thursday morning deals, up for the third straight session as most sectors advanced. Sentiment was buoyed by Bank Indonesia’s latest move to hold its key rate at 5.75% for a fourth month while raising its deposit facility rate by 25bps to support the rupiah. The central bank also gradually trims RRR from Nov. 1, aiming to free up around IDR 190 trillion into the banking system. However, gains were capped after President Prabowo criticised MSCI for proposing to remove Indonesia from its emerging-market status and reclassify it as a standalone market, saying Jakarta would not be intimidated by the plan. Meanwhile, U.S. equity futures weakened amid persistent concerns over returns from heavy tech spending. Non-cyclicals, energy, healthcare, and financials drove the strength, with Merdeka Battery Materials (4.0%), Aneka Tambang (3.3%), and Telkom Indonesia (1.9%) among early standouts. The four big banks rallied between 1.8% and 2.5%.

Indonesian shares rose 0.4% to 5,302 on Wednesday afternoon, reversing early losses as traders assessed Bank Indonesia’s latest policy decision. The central bank held its key rate at 5.75% for a fourth straight month but raised its deposit facility rate by 25bps to 5% and enhanced incentives for DNDF hedging to attract foreign capital. To boost liquidity, the board cut the reserve requirement ratio by 1ppt to 8% from Nov. 1, with a further easing to 7% from Dec. 1, aiming to inject around IDR 190 trillion into the financial system. Gov. Destry Damayanti said total hikes of 100bps earlier this year had helped anchor inflation expectations despite persistent El Niño-related food price pressures. Meanwhile, U.S. stock futures strengthened as concerns over AI investment eased. Healthcare, property, consumer non-cyclicals, and infrastructure drove gains. AKR Corp. jumped 6.2%, followed by Indofood Sukses Makmur (4.8%) and Indosat Tbk (4.1%). The four major banks rose between 0.3% and 1%.

Indonesian equities fell 84 points, or 1.6%, to 5,197 on Wednesday morning, reversing a prior rally after regulatory measures aimed at regaining investor confidence, including adjustments to stocks with high shareholding concentration and greater disclosure of shareholder affiliations. Traders turned cautious ahead of Bank Indonesia's rate decision later today. While the central bank is expected to hold borrowing costs for a fourth month, room for easing is limited after a cumulative 100bps hike in May and June. Still, the decline was capped by record FDI in Q3 2026, lifted by solid inflows into the base metal industry. In top trading partner China, key lending rates were left unchanged for a 17th month after stronger-than-expected Q3 GDP. Cyclicals, basic materials, and financials were mainly lower, partly offset by strength in infrastructure, non-cyclicals, and transport. Notable decliners included Solusi Energi Digital (-6.9%), Mitra Adiperkasa (-6.0%), and Medco Energi (-3.9%).