Indonesian Composite Index Surges to New Record High

Driven by Corporate Actions and Global Index Inclusion

The Indonesian Composite Index (IHSG) has achieved a new milestone by reaching 8,602.13, marking a significant 20.09% year-to-date growth. This performance is attributed to several key factors including robust corporate actions, substantial rotation into conglomerate stocks, and favorable technical fund flows.

Key Drivers of the Recent Surge

1. Corporate Actions: Strong corporate moves have played a crucial role in driving the index higher.
2. Conglomerate Stock Rotation: Massive rotation into conglomerate stocks has contributed significantly to the index's growth.
3. Global Index Inclusion: The recent inclusion of PT Barito Renewables Energy Tbk (BREN) and PT Bumi Resources Minerals Tbk (BRMS) in the MSCI Global Standard Index has been particularly impactful. According to Abida Massi Armand, Fundamental Analyst at BRI Danareksa Sekuritas, this inclusion has compelled global passive institutional funds to invest, thereby pushing up stock prices and the overall index weight.

Market Implications

While the IHSG continues to break records, there are concerns that this growth may not entirely reflect the actual market performance. The influx of global funds following the MSCI index rebalancing has been a significant factor in this surge. As the market continues to evolve, it remains to be seen how these dynamics will play out in the coming months.