Indonesian Second-Liner Stocks Show Strong Performance

Outperforming Major Market Indices

Indonesian second-tier stocks have demonstrated remarkable performance, with the IDX SMC Composite index rising by 6.83% in the past month to reach 436.43 as of November 21, 2025. This growth significantly outpaces both the LQ45 index, which grew by 3.15% to 845.68, and the broader IHSG, which saw a 2.14% increase to 8,414.35.

Factors Driving Performance

Reza Diofanda, an analyst at BRI Danareksa Sekuritas, identified three primary factors contributing to the strong performance of second-liner stocks. Firstly, there has been significant liquidity flowing into thematic sectors, attracting investors looking for growth opportunities. Secondly, the euphoria surrounding corporate actions has driven investor interest. Lastly, there has been a temporary rotation from large-cap stocks following the MSCI rebalancing, leading investors to seek alpha opportunities in mid and small-cap stocks.

Market Dynamics

The increased demand for second-liner stocks reflects a broader market trend where investors are diversifying their portfolios beyond the traditional large-cap stocks typically found in the LQ45 index. This shift indicates a growing appetite for alpha generation opportunities in the mid and small-cap segments of the market. As the year draws to a close, investors are likely to continue exploring these opportunities, potentially sustaining the momentum in second-liner stocks.