JCI Target Hiked: DBS Sees Index Hitting 9,500 by 2026 Despite Global "War Zone" Risks

JAKARTA, Investortrust.id — Indonesia’s equity market is gearing up for a historic run as DBS Group Research projects the Jakarta Composite Index (JCI) to shatter previous records by the end of 2026. Despite a war zone environment in the Strait of Hormuz that threatens 20% of global oil supply, the archipelago’s fundamental strength is decoupling from regional volatility.

For global portfolio managers, Indonesia is proving to be a critical safe harbor in an increasingly unstable global energy market. While higher oil prices typically cripple Asian importers, Indonesia—the region's largest economy—traditionally benefits from commodity rallies that boost its fiscal position. DBS’s target of 9,500 represents a major validation of the "Domestic Story Revival," suggesting that internal consumption and corporate earnings are now powerful enough to weather external shocks.

The Road to 9,500 and Beyond

William Simadiputra, Head of Research at DBS Indonesia, is doubling down on the country's momentum. The new base-case target of 9,500 implies a price-to-earnings (PE) ratio of 15.8x, a level that remains well within the ten-year historical average. Simadiputra notes that certain heavyweights, particularly within the Barito Group, are expected to remain firm and provide a "strong footing" for the index.

"We raise our JCI index target to 9,500 by year-end 2026 as the JCI posted a strong finish in 2025," Simadiputra stated in the strategy report. He further emphasized that the bull case of 12,500 is within reach if the Rupiah strengthens and GDP growth exceeds the 5.0% mark.

Weathering the Geopolitical Storm

The optimistic forecast arrives just as oil infrastructure in the Middle East has come under direct attack, with Brent hitting the $100 per barrel level. DBS identifies the Strait of Hormuz as a primary "asymmetric risk," warning that a full blockade could cause oil prices to double from current levels. However, the report suggests that drawdowns in global equity markets led by conflict are often "fleeting".

In a "Worst Case" scenario where the Strait is impacted, DBS warns the JCI could face a 28.6% drawdown, potentially testing the 6,750 level. Yet, the report highlights that "Indonesia tends to be a net beneficiary during oil price rallies, as seen in 2022 and 2008," offering a buffer that many of its neighbors lack.

Corporate Earnings as the Anchor

As the room for error narrows in 2026, DBS analysts believe corporate earnings and dividends will be the ultimate deciders of market performance. The strategy recommends a selective approach to commodities while banking on a domestic revival. With Pertamina's oil inventory currently at 20 days, the pressure on retail fuel prices remains a key variable for local inflation and the Rupiah’s stability.

"Index has strong footing to sustain its strong momentum ahead," Simadiputra concluded, pointing toward potential further MSCI inclusions for rising Indonesian stocks as a catalyst for foreign inflows.