Jakarta stocks rise as political risks ease, BI leadership takes shape

JAKARTA, INDONESIA, 28 AUGUST 2026 —

Jakarta, 27 Aug 2026 – Indonesian equities opened higher on Friday, buoyed by a reduction in domestic political and security concerns and clearer expectations for Bank Indonesia’s (BI) leadership.

A total of 271 stocks advanced, 111 declined, and 252 remained unchanged.

The rally follows a period of market pressure that began amid worries over domestic conditions. Phintraco Sekuritas said investors reacted positively to the easing of political and security risks, noting that the House of Representatives has set a target to pass the Asset Forfeiture Bill into law by 15 Dec 2026.

The brokerage also highlighted the increased certainty surrounding BI’s leadership after the House’s Commission XI approved Destry Damayanti as the central bank’s governor for the 2026‑2031 term. Destry will officially replace Perry Warjiyo, who resigned on 25 July 2026, while Aida S. Budiman will assume the role of senior deputy governor. “This is expected to reduce uncertainty over BI’s future monetary policy direction while maintaining stability and investor confidence in Indonesia’s capital market,” Phintraco said.

In parallel, Danantara Indonesia, a sovereign wealth fund, announced a US$1 billion allocation to Swiss asset manager Partners Group for private‑credit investments. Six hundred million dollars will be deployed in direct lending opportunities, while the remaining US$400 million will be placed in a discretionary tranche managed by Partners Group for co‑investment needs.

Global market sentiment remained broadly positive, particularly toward technology and artificial intelligence (AI) stocks, after Nvidia’s latest earnings reinforced confidence that the AI infrastructure spending cycle remains intact. Pluang Sekuritas noted that Nvidia reported revenue and profit that more than doubled and projected 70 % growth next year, far above the market consensus of 44 %.

Its shares jumped 9 %, although other AI chip and hardware stocks were largely unchanged, while the Nasdaq gained less than 2 %. “Investors no longer see good news from Nvidia as good news for the entire AI supply chain.

With a valuation of more than $5 trillion, passive investors automatically hold Nvidia at around 5 % in global index funds, 8 % in S&P 500 index funds, and more than 20 % in technology sector funds,” Pluang said in its research released Friday.

Kiwoom Sekuritas Indonesia, however, cautioned that the positive sentiment remains shadowed by macroeconomic risks, particularly persistently elevated inflation and growing expectations that the Federal Reserve could raise interest rates again before year‑end. “These conditions could potentially make the market more volatile as investors become increasingly sensitive to inflation developments, labor data, interest rate policy, and the direction of trade policy,” Kiwoom said.

US core PCE inflation rose 0.2 % month‑on‑month and 3.3 % year‑on‑year in July, remaining well above the Federal Reserve’s 2 % target, while the US economy expanded at an annualized 1.5 % in the second quarter.

Overnight on Wall Street, the S&P 500 rose 0.72 %, the Nasdaq Composite gained 1.57 %, and the Dow Jones Industrial Average added 0.20 %. Across Asia, markets were mixed as of 9:21 a.m. Jakarta time. Japan’s Nikkei rose 0.83 %, while South Korea’s Kospi fell 0.95 %. Hong Kong’s Hang Seng edged up 0.09 %, and Shanghai’s SSE Composite gained 0.22 %.

The Indonesian market’s modest gains reflect a broader trend of cautious optimism amid geopolitical and economic uncertainties. The easing of domestic political risk, coupled with clearer expectations for BI’s leadership, has helped restore investor confidence. Meanwhile, the country’s sovereign wealth fund’s move into private credit signals a continued search for higher yields in a low‑interest‑rate environment.

Regional implications are significant. Indonesia’s political stability and monetary policy clarity are likely to influence investor sentiment across ASEAN, where markets have been sensitive to domestic policy shifts. The country’s trade relationship with the European Union remains below potential, with the EU ambassador citing Vietnam’s $80 billion trade benchmark as a reference point. This highlights the need for Indonesia to enhance its trade competitiveness to fully realise its economic potential.

Looking ahead, market participants will monitor several key developments. The passage of the Asset Forfeiture Bill by 15 Dec 2026 will be a critical milestone for legal and financial reforms. BI’s policy direction under Governor Destry Damayanti will also be closely watched, as it will shape the country’s monetary stance amid global inflationary pressures.

On the global front, the trajectory of US monetary policy and its impact on commodity prices and emerging‑market currencies will remain a focal point for investors.

In summary, Jakarta’s stocks rose on a backdrop of reduced political risk and clearer central‑bank leadership, while global tech optimism and private‑credit allocations added to the positive tone. However, macroeconomic risks, particularly inflation and potential Fed rate hikes, continue to loom, underscoring the need for vigilance as Indonesia navigates its economic path forward.