Why 14 Prabowo Speeches Could Be the Jakarta Stock Market's Next Big Volatility Test

JAKARTA, Investortrust.id — Indonesia's stock market may face another politically driven volatility test this month as President Prabowo Subianto is scheduled to deliver 14 public speeches in July, prompting analysts to advise investors to brace for sharp swings in the Jakarta Composite Index (JCI).

The warning comes after Indonesia's benchmark index briefly slipped during Wednesday morning's trading as Prabowo addressed the National Police's 80th anniversary ceremony before recovering to close 0.96% higher, illustrating how presidential appearances can influence short-term market sentiment without necessarily altering the broader trend.

For global investors, the issue is less about the speeches themselves than what they may reveal about policy direction.

Since taking office, Prabowo's remarks on fiscal policy, state spending and flagship programs have become closely watched after foreign investors sold more than Rp 76 trillion (about $4.8 billion) worth of Indonesian equities this year amid concerns over fiscal discipline and slowing economic momentum.

With the JCI already among the world's weakest-performing major equity markets in the first half of 2026, investors are increasingly treating presidential communications as potential market-moving events.

Historical Pattern Points to Higher Volatility

In its second-half 2026 market outlook released Wednesday, PT Kiwoom Sekuritas Indonesia, an Indonesian brokerage, said investors should monitor July carefully because presidential speeches have historically been accompanied by increased stock-market volatility.

Even so, the brokerage expects the JCI to recover to 7,250-7,700 by the end of 2026, provided the index breaks out of its current downtrend by late July.

"The projection is supported by historical patterns showing that July has generally been a positive month for the JCI, as well as the absence of negative rating actions toward Indonesia from international credit-rating agencies such as S&P Global," Kiwoom said in the report.

Cheap Valuations Aren't Bringing Foreign Money Back

Kiwoom argues that Indonesia's problem is no longer valuation.

At around 13.1 times forward earnings, the JCI is the second-cheapest major equity market in Asia after Hong Kong's Hang Seng Index. Yet bargain valuations have failed to attract foreign capital back into Indonesian equities.

Instead, the brokerage sees deeper structural challenges weighing on investor appetite.

Foreign ownership of Indonesian government bonds has dropped dramatically from roughly 40% in 2019 to just 13%-14% today, while Indonesia's weighting in the MSCI Emerging Markets Index has fallen from 2.6% in 2016 to around 0.4%.

The shrinking index weight has automatically reduced allocations from passive funds while also diminishing interest from active global investors, resulting in weaker liquidity, less research coverage and declining international visibility for Indonesian equities.

Indonesia Missing the AI Investment Boom

Kiwoom also says Indonesia has largely missed the global investment wave centered on artificial intelligence.

Unlike markets such as Taiwan, South Korea or the United States, the Indonesia Stock Exchange is dominated by banks, commodity producers, consumer companies and diversified conglomerates, with few listed companies directly exposed to AI, semiconductors or robotics supply chains.

That sector composition has limited Indonesia's ability to capture the capital flowing into technology-led investment themes.

Policy Credibility Now Matters More Than Growth

According to Kiwoom, Indonesia's biggest challenge in the second half of 2026 is no longer generating economic growth but convincing international investors that the growth story deserves fresh capital.

The brokerage said stronger policy credibility, consistent reform execution, greater transparency and innovation will be essential to rebuilding investor confidence.

For stock selection, Kiwoom continues to favor PT Vale Indonesia Tbk (INCO), one of Indonesia's largest nickel miners; PT Aneka Tambang Tbk (ANTM), the state-controlled diversified miner; PT Pantai Indah Kapuk Dua Tbk (PANI), a major property developer; and PT Bank Rakyat Indonesia (BBRI), Indonesia's largest microfinance lender.

Other preferred names include PT Dayamitra Telekomunikasi Tbk (MTEL), PT Jasa Marga (JSMR), PT Japfa Comfeed Indonesia Tbk (JPFA), PT Kalbe Farma Tbk (KLBF) and PT Bank Negara Indonesia Tbk (BBNI).