Rancak Media, JAKARTA — The Jakarta Composite Index (IHSG) closed at a new all-time high (ATH) for two consecutive days last week, with the composite index now comfortably sitting at the 8,394.59 level. This remarkable performance has naturally led to questions about the sustainability of its positive momentum and how it can sidestep significant profit-taking after investors have reaped substantial gains from their stock portfolios.
Angga Septianus, Community and Retail Equity Analyst Lead at PT Indo Premier Sekuritas (IPOT), suggests that the likelihood of profit-taking increases considerably when the composite index breaches ATH territory, especially if accompanied by specific market-triggering sentiments. Looking ahead, a critical point of focus will be the fourth-quarter GDP data, which will reveal the full impact of various government stimuli designed to boost public purchasing power. Finance Minister Purbaya’s optimism regarding Q4 GDP, fueled by abundant liquidity, serves as a significant positive sentiment supporting the market.
The Ministry of Finance (Kemenkeu) reports that state-owned banks (Himbara) had disbursed IDR 167.6 trillion in government liquidity injections by October 22, 2025, representing 84% of the total government placement funds. This figure marks a substantial 48% increase from the IDR 113 trillion (56% of total funds) disbursed by October 9, 2025. With this robust distribution, Kemenkeu is optimistic that industrial credit growth could reach 10% year-on-year (YoY) by the end of 2025, a significant jump from the 7.56% YoY growth recorded before the liquidity injection announcement. Already by September 2025, an increase in money supply (M2) growth was observed, alongside an acceleration in industrial credit growth to 7.7% YoY.
Despite the prevailing optimism, Angga cautions that if the macroeconomic data for Q4 2025 falls short of expectations, certain stock sectors could become vulnerable to profit-taking. This risk is particularly pronounced for sectors whose constituent stocks have experienced substantial price rallies. However, Angga also notes that the IHSG’s ascent has been bolstered by sustained foreign buying and positive sentiment stemming from the inclusion of several Indonesian stocks into MSCI indices, factors that could lend greater resilience to the current market uptrend.
Examining recent economic data, Indonesia’s GDP growth for Q3 2025 stood at 5.04% YoY. While this performance is an improvement over Q3 2024’s 4.95% YoY, it represents a slight deceleration compared to Q2 2025’s 5.12%. Observing these figures in conjunction with the IHSG’s record-breaking highs, capital market observer Reydi Octa suggests that the current correlation between the stock market and broader economic developments is not particularly strong.
“For instance, despite slowing GDP, high participation from both retail and local institutional investors has kept the IHSG stable recently,” Reydi elaborates. He attributes the current market movements predominantly to liquidity, fund flows, and the fluctuating sentiments of optimism and pessimism among investors. Nevertheless, Reydi warns of potential future corrections: “If purchasing power continues to weaken, subsequently impacting the financial performance of issuers and reflecting poorly in fundamental analysis, then stocks could lose investor interest, leading to a market downturn for the IHSG.”
Summary
The Jakarta Composite Index (IHSG) recently achieved a new all-time high of 8,394.59 for two consecutive days. This strong performance is partly attributed to significant government stimulus, with state-owned banks disbursing IDR 167.6 trillion in liquidity injections by October 2025, aiming to boost industrial credit growth to 10% year-on-year. Sustained foreign buying and inclusion in MSCI indices further support the market’s upward trajectory.
However, concerns about potential profit-taking remain, especially if Q4 2025 macroeconomic data falls short of expectations. Analysts warn that sectors with substantial rallies could be vulnerable under such circumstances. A market observer suggests the IHSG’s current movements are more driven by liquidity and investor sentiment than by economic fundamentals, cautioning that weakening purchasing power could eventually lead to a downturn.
