Analyst: Foreign Investors Still 'Wait and See' on Indonesian Bourse Despite Attractive Valuations

Despite Indonesia’s stock market valuations being relatively attractive and inexpensive, foreign capital inflows have yet to enter aggressively. This condition is driven by investors awaiting clearer policy direction and positive short-term catalysts. Senior Equity Portfolio Manager at PT Manulife Aset Manajemen Indonesia (MAMI), Caroline Rusli, stated that cheap stock prices alone are insufficient to attract global investors amid current market dynamics. “Indonesia is currently in a selective value phase. A defensive strategy and identification of stocks and sectors through a bottom-up approach are crucial,” Caroline said in an official statement in Jakarta on Monday. Caroline explained that in a global liquidity environment that is no longer as accommodative as before, investors tend to be more selective in choosing regions and asset classes. Currently, North Asia is considered to have greater appeal compared to other emerging markets. North Asia’s advantage, according to her, is driven by direct links to global trends such as artificial intelligence (AI), the semiconductor industry, and increased global technology capital expenditure. Rising investment from hyperscaler companies like Amazon, Google, Meta, and Microsoft has a significant positive impact on the supply chain in Asia, particularly in the electronic components and energy support infrastructure sectors. The strength of the Asian market today is not only supported by cheap valuations but also by earnings growth prospects with strong structural catalysts, especially in the technology and advanced materials sectors. Entering mid-2026, Asian stock market performance shows resilience amid global volatility. However, for the Indonesian market, the main challenge remains the visibility of catalysts that can convince foreign investors to return en masse. Caroline emphasised the importance of focusing on companies with structural growth potential and solid corporate earnings to withstand the ongoing global economic uncertainty.