A Series of Factors Driving the JCI to Strengthen at the Start of This Week
The Jakarta Composite Index (JCI) on the Indonesia Stock Exchange (IDX) strengthened today, following global stock markets and triggered by a peace agreement between the United States (US) and Iran. The JCI opened this morning up 111.07 points, or 1.85 percent, to 6,118.73. Meanwhile, the LQ45 index of 45 leading stocks rose 13.38 points, or 2.24 percent, to 601.83.
Head of Research at Kiwoom Sekuritas, Liza Camelia Suryanata, explained that external factors were among the drivers for the JCI. Over the past weekend, market attention was focused on developments in the Middle East. US President Donald Trump announced that a peace deal between the US and Iran had been completed and would be officially signed on 19 June 2026 in Switzerland. This was confirmed by Iranian Deputy Foreign Minister Kazem Gharibabadi regarding a memorandum of understanding (MoU) that had been finalised.
The agreement includes the reopening of the Strait of Hormuz, the lifting of the US naval blockade against Iran, the release of USD 25 billion in frozen Iranian assets, and Iran’s commitment not to develop nuclear weapons during the final negotiation process. However, Iran stressed that management of the Strait of Hormuz would remain under Iran and Oman, and still opened the possibility of levies for navigation and security services.
Liza added that market participants’ focus this week is the first Federal Reserve meeting under the leadership of Kevin Warsh, which is expected to maintain interest rates in the 3.5-3.75 percent range. “The improving geopolitical situation reduces concerns about global energy supply disruptions and directly increases investors’ risk appetite,” she said.
Meanwhile, internal factors that also strengthened the index came from the World Bank’s projection of Indonesia’s state budget deficit at 2.8 percent of GDP in 2026-2027. The deficit is expected to ease slightly to 2.7 percent in 2028, due to pressure from energy subsidies, government priority programmes, and an increase in the debt interest burden, which is projected to rise from 18.7 percent to 19.2 percent of state revenue in 2028.
Another factor driving the JCI is the cooperation between Bank Indonesia (BI) and the People’s Bank of China (PBOC) in deepening financial cooperation through the enhancement of the Bilateral Currency Swap Agreement (BCSA). Additionally, there are activities to expand local currency transactions, the establishment of a Renminbi Clearing Arrangement in Indonesia, the launch of an Indonesia-China cross-border QR system, and Bank Mandiri’s participation in China’s Cross-Border Interbank Payment System (CIPS).
Another internal factor is Danantara, through PT Danantara Investment Management (DIM), issuing its first global bonds worth USD 1.5 billion with yields of 5.35 percent (5-year tenor) and 5.95 percent (10-year tenor), as part of a USD 5 billion Global Medium Term Note (GMTN) programme. Investor attention is currently highlighting Indonesia’s fiscal risks, rupiah stability, and the expansion of Danantara’s mandate as the sole exporter of strategic commodities starting next September.
On Friday’s trading last week, European stock markets strengthened in unison, with the Euro Stoxx 50 up 2.16 percent, the UK’s FTSE 100 up 1.63 percent, Germany’s DAX up 1.76 percent, and France’s CAC 40 up 1.83 percent. US markets on Wall Street also closed higher last Friday, with the Dow Jones Industrial Average up 0.17 percent, the S&P 500 up 0.50 percent, and the Nasdaq Composite up 0.31 percent. Regional Asian stock markets that strengthened today included the Nikkei index, up 5.44 percent to 69, 680.00, the Shanghai index, up 0.94 percent to 4,096.31, the Hang Seng index, up 0.43 percent to 24,828.00, and the Strait Times index, up 1.14 percent to 5,083.78.