JAKARTA — The Jakarta Composite Index (JCI) is projected to maintain its upward trajectory toward the 7,300 level in the medium term, following the recent announcement from MSCI regarding its index rebalancing.
Analysts at Kiwoom Sekuritas believe that the market pressure triggered by the removal of certain stocks from the MSCI index is less severe than initial investor concerns suggested. Much of the selling pressure, the firm notes, has already been absorbed by the market over the past several months.
“The results of the MSCI May 2026 rebalancing may appear negative for Indonesia on the surface. However, a closer inspection reveals that the selling pressure is not widespread but is instead highly concentrated in a few specific stocks,” the Kiwoom Sekuritas research team stated on Sunday, May 17, 2026.
According to Kiwoom, the brunt of the rebalancing pressure has been centered on PT Dian Swastatika Sentosa Tbk. (DSSA) and PT Barito Renewables Energy Tbk. (BREN). The firm noted that these two stocks alone account for more than half of the total selling pressure generated by the MSCI adjustment.
Furthermore, Kiwoom observes that current estimates for foreign outflow are far more realistic than the initial panic-driven market scenarios, which had previously projected outflows exceeding Rp50 trillion. The research team emphasizes that the year-to-date foreign net sell of approximately Rp49 trillion cannot be attributed solely to the MSCI rebalancing. Much of this movement occurred earlier as global investors adjusted their portfolios ahead of the May 29, 2026, implementation date.
Beyond the MSCI factor, market performance remains influenced by external headwinds, including the depreciation of the Indonesian Rupiah past the Rp17,500 per US dollar mark, geopolitical tensions involving Iran, rising US Treasury yields, and broader global economic uncertainty.
Despite these challenges, Kiwoom highlights several underappreciated catalysts. Notably, Indonesia’s status as an Emerging Market remains secure, defying fears of a downgrade to Frontier Market status. Moreover, the removal of stocks from the MSCI index is a global trend rather than an Indonesian anomaly; the latest review saw only 49 stocks added worldwide, while 101 were removed.
Given these dynamics, Kiwoom Sekuritas recommends that investors adopt a wait-and-see approach while waiting for market volatility to stabilize. From a technical perspective, the JCI is expected to test support levels between 6,762 and 6,745, with potential to close gaps in the 6,538 to 6,092 range. Meanwhile, immediate resistance is expected within the 6,980–7,015 corridor.
Looking toward the medium term, Kiwoom Sekuritas maintains a positive outlook, targeting a recovery toward the 7,300 level as capital market reforms begin to gain traction.
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Summary
The Jakarta Composite Index (JCI) is projected to reach the 7,300 level in the medium term despite the recent MSCI index rebalancing. Analysts indicate that selling pressure is highly concentrated in specific stocks, such as DSSA and BREN, rather than being a widespread market issue. Much of the foreign outflow was absorbed prior to the implementation date, resulting in more realistic market scenarios than initially feared.
External factors like Rupiah depreciation and global economic uncertainty continue to impact performance, but Indonesia has successfully maintained its Emerging Market status. Kiwoom Sekuritas suggests that the current removal of stocks is part of a global trend rather than a local anomaly. Investors are advised to adopt a wait-and-see approach as the index stabilizes and tests key technical support levels.
