BI Rate Held, What Is the Impact on the IHSG?
Bank Indonesia’s (BI) decision to hold the BI Rate at 5.75% has become a key focus for market participants recently. This policy is considered to provide certainty for investors amid various global uncertainties, ranging from the direction of world central bank interest rates to international financial market volatility.
Yulinar Khoirunnisa, Investment Specialist at Maybank Sekuritas, said during a Tiger Insight session that for the capital market, the interest rate decision has a direct influence because it is related to funding costs, consumption activity, business expansion, and investment flows into financial instruments. Therefore, every Bank Indonesia decision always becomes a catalyst that investors watch when formulating investment strategies.
The holding of the BI Rate also signals that the central bank views domestic economic conditions as being on a relatively stable path. This stability is a factor that helps maintain positive sentiment towards the Indonesian stock market, including the movement of the Composite Stock Price Index (IHSG). Amid this situation, investors are beginning to refocus on the fundamental prospects of issuers and opportunities emerging from various sectors that could become the next market leaders.
Why the BI Rate Matters for the IHSG
Interest Rates Influence Fund Flows
The BI Rate is one of the primary instruments used by Bank Indonesia to maintain economic and inflation stability. When interest rates rise, borrowing costs for businesses and the public also tend to increase. Conversely, when rates are stable or fall, economic activity usually receives support because funding costs become more manageable.
For the stock market, interest rate stability is often viewed positively because it provides certainty for businesses in carrying out expansion. Additionally, investors can more easily estimate companies’ future profit prospects. In the current conditions, the decision to hold interest rates helps maintain market expectations that the business environment remains conducive enough to support growth across various industrial sectors.
Impact on Investor Confidence
BI’s decision also plays an important role in maintaining the stability of the rupiah exchange rate and the confidence of both domestic and foreign investors. When the market gains certainty regarding the direction of monetary policy, volatility tends to be more controlled, and investors can focus more on companies’ fundamental factors rather than excessive macro risks. Therefore, the decision to hold the BI Rate has become one of the factors helping to maintain the IHSG’s positive momentum in recent weeks.
Technical Analysis Shows IHSG Still Constructive
Based on technical analysis by Satriawan, Chartist at Maybank Sekuritas, the IHSG’s movement is still within a relatively healthy trend structure despite experiencing a mild correction. The selling pressure that has occurred so far has not altered the main market structure. As long as the index can maintain its key support area, the opportunity to continue strengthening towards the next resistance area remains open. This condition leads some investors to view short-term corrections as opportunities to gradually accumulate selected stocks.
Satriawan noted that the IHSG’s ability to hold above its main support is a factor that needs continuous monitoring. If the support holds, the chance for the index to test the resistance area again will increase. Conversely, investors still need to be wary of a trend change if selling pressure intensifies and the index fails to maintain this crucial level.
Selected Stocks from a Technical Perspective
PT Trimegah Bangun Persada Tbk (NCKL) is showing a relatively constructive movement pattern after passing a consolidation phase. The selling pressure that occurred has not damaged the main structure, and as long as the key support area is maintained, the opportunity to continue strengthening towards the next resistance remains open. The market’s high attention to the mineral downstreaming theme and the electric vehicle ecosystem is a factor that could support sentiment towards this nickel sector stock.
PT Adaro Minerals Indonesia Tbk (AADI) is also showing interesting technical developments. This stock has managed to hold above a crucial support area and maintain its positive movement momentum. The success in defending this area indicates that buying interest is still quite well maintained. If the momentum continues, AADI has the potential to move towards a higher area.
PT BUMA Internasional Grup Tbk (DOID) is another stock pick that is considered technically attractive. This stock has successfully broken through a downtrend line that previously acted as a price barrier. In technical analysis, a breakout from a downtrend is often considered an initial signal of a trend change that needs to be watched. As long as its main support area is maintained, the opportunity to continue the rally remains open for DOID. The active commodity and mining activity theme is also a supporting factor that can influence sentiment towards this stock.
According to Judandi, Investment Specialist at Maybank Sekuritas, one sector that remains attractive in the long term is green energy. PT Pertamina Geothermal Energy Tbk (PGEO) is benefiting from the energy transition trend that is increasingly becoming a global focus. The push towards clean energy and the development of new renewable energy projects provide long-term growth prospects for issuers in this sector.