Banking Sector Shares Show Signs of Attracting Investor Interest After Prolonged Downturn
Jakarta — Indonesia’s finance sector, which is predominantly composed of banking stocks, is eagerly awaited by market participants for a recovery. Will this year see such a turnaround?
According to NeoBDM data through the close of business yesterday, Thursday 12 March 2026, over an eight-day period, the finance sector has begun entering an early phase of outperformance.
According to our monitoring, if the outperformance phase is starting, this typically signals that most stocks within the finance sector are beginning to enter an accumulation phase or move sideways after a prolonged downtrend period.
The accumulation phase generally serves as an early stage before a new uptrend forms, as market participants begin absorbing shares gradually during this period.
This accumulation phase also opens fresh hope that the banking sector can catch up with other sectors that have already moved ahead.
In several previous cycles in the Indonesian stock market, bank shares have often moved somewhat more slowly initially, but then become the main driver of the index when market liquidity begins returning.
We anticipate that bank share movements will become more agile after May when the technical MSCI drama has further subsided, accompanied by improved stock exchange transparency regarding free float.
From a macroeconomic perspective, several factors are also slowly starting to turn more positive for the financial sector, particularly banking.
Since last year, Bank Indonesia has cut its benchmark interest rate several times in order to encourage economic growth and strengthen liquidity transmission to the real sector.
Although the impact on credit growth and bank share prices has not yet appeared significant in the short term, this monetary policy easing typically requires time before truly reflecting improvements in credit demand and bank profitability.
Additionally, credit growth prospects remain quite solid. Bank Indonesia itself estimates banking sector credit growth in 2026 to be in the range of 8–12% annually, indicating that financing activity in the real sector still has room for expansion.
This condition is one catalyst with potential to support fundamental bank performance, especially if the recovery in domestic consumption and investment continues.
Another factor that can also increase the appeal of the banking sector is the dividend season beginning to roll out.
One comes from PT Bank Negara Indonesia (Persero) Tbk (BBNI), which offers potential dividend yield of around 8 per cent, making it one of the bank stocks with the most attractive dividend returns during this period.
Relatively high dividends often become a magnet for investors, especially those seeking a combination of capital gains and dividend income.
Not only that, positive sentiment also comes from PT Bank Central Asia Tbk (BBCA). In the shareholder meeting held yesterday Thursday, where shareholders approved dividend distribution and a Rp5 trillion share buyback programme to be executed over the next 12 months.
The buyback programme is typically viewed as a signal that management sees share valuation at attractive levels, whilst also being an effort to maintain share price stability in the market.