Will Benchmark Index Reach 8,000? Market Rallies Ahead of Indonesia’s 80th Independence Day
Main Takeaways
|
JAKARTA, Investortrust.id – Indonesia’s 80th Independence Day in August 2025 will coincide with the 48th anniversary of the capital market’s reactivation—an occasion that could also mark a historic breakthrough: the country’s benchmark stock index breaking through the psychological threshold of 8,000.
The target, once considered aspirational, is now within reach. Over the course of just three weeks in July, the Jakarta Composite Index (IHSG) surged 7.82% from 6,927 to a new 2025 high of 7,469. Analysts say the rally is being driven by improving macroeconomic signals both at home and abroad, and the 8,000 milestone could become a reality—provided that current momentum holds.
Senior Market Analyst at Mirae Asset Sekuritas Indonesia, Muhammad Nafan Aji Gusta, attributes the rally to synchronized monetary easing by Bank Indonesia and the United States Federal Reserve. “The index can hit 8,000 if geopolitical tensions and trade conflicts ease. But uncertainty still lingers,” he told investortrust.id on Wednesday, July 23.
He explained that three rate cuts by Bank Indonesia in 2025 have improved domestic liquidity. The Federal Reserve, meanwhile, is expected to reduce its benchmark interest rate twice more, likely in October and November. The continuation of low interest rates through 2026 could support further corporate borrowing and investment, he added.
Despite the optimism, Nafan warned that persistent net selling by foreign investors could hinder progress. “Sustainable movement toward 8,000 depends on renewed foreign inflows,” he said. While Mirae Asset currently projects a bullish scenario of 7,546, the target may be revised upward if global tensions subside and economic recovery accelerates.
Rate Cuts, Tariff Easing, and Big-Cap Momentum
Nafan also highlighted technical patterns in the index, which is now in a "wave 3" phase—a stage typically marked by sharp rallies. Historically, August, October, November, and December have provided favorable market conditions over the past five years.
Market observer at Panin Sekuritas, Reydi Octa, echoed that optimism. As of July 22, the index had climbed nearly 24% since March 2025, reaching 7,360—just 8% short of the milestone. “The momentum is solid. If no major disruptions arise, 8,000 in August is very feasible,” he said.
He pointed to several supporting catalysts, including expectations that Bank Indonesia’s policy rate could drop to 5.25%, and the United States’ decision to reduce import tariffs on Indonesian goods from 32% to 19%. Both moves are viewed as strengthening investor confidence in the domestic market.
In addition to macroeconomic drivers, several large-cap stocks have emerged as market leaders. Companies such as PT Bank Central Asia Tbk, or BBCA; PT Bank Rakyat Indonesia Tbk, or BBRI; PT Aneka Tambang Tbk, or ANTM; PT Adaro Energy Indonesia Tbk, or ADRO; PT Indofood CBP Sukses Makmur Tbk, or ICBP; and PT Telkom Indonesia Tbk, or TLKM, are expected to drive the index further upward after a period of consolidation.
Growth Figures and Global Engagement
Still, much hinges on domestic economic performance. Nafan stressed that second-quarter gross domestic product growth will be critical. He believes the economy must expand by at least 2.5% quarter-on-quarter during April–June to provide the foundation for a sustained stock rally. “That level of growth could serve as a launchpad for the index,” he said.
Another external factor lies in the success of Indonesia’s economic diplomacy. Nafan emphasized the importance of enhancing bilateral and multilateral ties, particularly through efforts to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Organisation for Economic Co-operation and Development (OECD). Strengthening existing trade agreements, he added, would widen Indonesia’s export markets and boost its investment profile in the eyes of global investors.
If the macroeconomic narrative aligns with strategic policy moves, August 2025 could go down in history—not only for national celebrations but also for a new all-time high in the country’s capital market index.
Supporting this view, recent momentum has been driven by soaring prices in several large-cap stocks associated with Indonesia’s top tycoons. Among them, PT DCI Indonesia Tbk, or DCII, jumped 130.23% over the past month, while PT Barito Renewables Energy Tbk, or BREN, surged 33.19%. PT Petrindo Jaya Kreasi Tbk, or CUAN, gained 34.34%; PT Barito Pacific Tbk, or BRPT, climbed 46.36%; and PT Merdeka Copper Gold Tbk, or MDKA, also rose 46.36% during the same period. The rally has been seen as a vote of confidence in these flagship companies—and, by extension, the market itself.