Why JPMorgan Targets a 7,000 Milestone as Foreign Capital Rushes Back to Jakarta

JAKARTA, Investortrust.id — Wall Street giant JPMorgan is doubling down on Southeast Asia's benchmark equity index, maintaining its forecast that the Jakarta Composite Index (JCI) will surge to the 7,000 mark by December 2026 as institutional foreign investors aggressively scoop up oversold banking giants.

The benchmark index climbed 1.03% to 6,663.56 during Thursday’s midday session on turnover of Rp 9.67 trillion ($608.18 million), accelerating an institutional rotation that gathered steam after parliament ratified career central banker Destry Damayanti as Governor of Bank Indonesia (BI), the nation’s monetary authority.

Global emerging-market asset managers have run historically underweight allocations to Southeast Asia's biggest economy throughout 2026, leaving equity valuations primed for sharp upside re-ratings. With foreign liquidity pivoting back into tier-one lenders and market watchdogs dismantling artificial trading floors, Jakarta is engineering a market environment capable of channeling global capital back into cyclical equities.

Underweight Positioning Fuels the Rally

JPMorgan strategists emphasized that light domestic and global positioning creates an asymmetric risk-reward setup, leaving local equities positioned for a swift catch-up rally heading into the final quarter. The institutional rotation is restoring market leadership to heavily traded large-cap shares, reversing months of cautious sentiment.

"The JPMorgan team still expects the Jakarta Composite Index target by December to reach 7,000," said Benny Kurniawan, Head of Indonesia Equity Research at J.P. Morgan Indonesia, during a media briefing in Jakarta’s Sudirman financial district on Thursday. "We anticipate gains driven by more positive sentiment and investor positioning—both local and foreign—that has been quite depressed this year."

Brokerage desks report that the rally is spearheaded by aggressive accumulation in PT Bank Rakyat Indonesia (Persero) Tbk (BBRI), the nation's biggest micro-lender, alongside PT Bank Central Asia Tbk (BBCA), the largest private bank by valuation, and state-owned commercial titan PT Bank Mandiri (Persero) Tbk (BMRI). Analysts at Mirae Asset Sekuritas Indonesia affirmed that the return of foreign portfolio flows reflects improving market leadership anchored by liquid blue chips.

Scrapping the 50-Rupiah Trading Floor

Liquidity could receive an additional structural boost from regulatory proposals by the Indonesia Stock Exchange (IDX), the national bourse operator, to scrap the statutory Rp 50 ($0.003) minimum floor price and permit shares to trade down to Rp 1 ($0.00006). Wall Street sees the shift as an overdue modernization that mirrors developed-market mechanics.

"If that floor price of Rp 50 is eliminated, it should enhance market transparency and liquidity," Kurniawan said on Thursday, noting that the reform directly reflects the US penny-stock framework. "Foreign investors should view this positively because international bourses operate without artificial price floors; removing it restores true market price discovery so buyers aren't terrified of trapped capital."

Looking into 2027, Wall Street analysts project aggregate corporate net income will climb roughly 9%, insulated by strong underlying top-line sales, continued national infrastructure commitments, and incoming private investment. While rising food costs and factory contractions keep policymakers vigilant, JPMorgan asserts that solid domestic enterprise revenues will prevent global asset allocators from looking past the Indonesian market.