JP Morgan Forecasts IHSG to Reach 10,000 in 2026

Positive Sentiments Driving Market Growth

JP Morgan remains optimistic about Indonesia's economic prospects in 2026, following this year's political transition. The investment bank forecasts that the Indonesian Composite Index (IHSG) could reach the 10,000 level driven by multiple positive factors.

Key Drivers of Market Growth

1. Continued Monetary Easing: JP Morgan expects Bank Indonesia to continue its monetary easing policy, with a potential 50 basis point rate cut in 2026. This move is expected to stimulate economic growth and boost the stock market.
2. Increased Government Spending: Higher government expenditure through fiscal measures and Danantara is anticipated to drive economic growth and domestic consumption. The restructuring of Danantara's functions into holding, asset management, and investment management is seen as a significant catalyst for the market.
3. Growing Retail Investor Participation: Retail investor numbers have been rising, nearing the record levels seen during the COVID-19 pandemic in 2020. This trend is expected to continue into the first half of 2026 before stabilizing in the second half.
4. Improved Institutional Inflows: Institutional investor flows are expected to improve due to new investment mandates from Danantara, increased equity allocations from state-owned pension funds, and a better global macroeconomic environment.

Sector Recommendations

JP Morgan recommends sectors that are likely to perform well in 2026, including:

• Industrial Sector
• Raw Materials/Materials Sector
• Consumer Sector
• Property Sector

Potential Risks

Despite the positive outlook, JP Morgan notes potential risks that could hinder market gains, such as prolonged rupiah weakening which could disrupt business conditions and trigger capital outflows.

Earnings Expectations

The firm expects listed companies' earnings to grow by 8% in 2026, an improvement from the negative single-digit growth in 2025. This earnings growth is seen as a positive factor supporting the bullish market outlook.