JCI Remains Pressured by Geopolitical Risks, Potentially Testing 7,000 Level
The Composite Stock Price Index (JCI) is assessed as still under pressure and not fully recovered amid rising global uncertainties due to geopolitical conflicts in the Middle East.
Capital market analyst Hendra Wardana stated that the current market condition is in a risk-off phase, particularly due to concerns over the potential closure of the Strait of Hormuz, which could disrupt global energy supplies.
“If the worst-case scenario occurs, namely a prolonged war and oil prices surging to US$130-150 per barrel, the impact would be significant on global inflation, prolonged high interest rates, and pressure on the rupiah exchange rate,” Hendra told Media Indonesia on Monday (30/3).
Hendra assessed that under such conditions, the JCI could weaken further and test the psychological level of 7,000. Even in an extreme scenario, the index is estimated to drop to the 6,800-6,900 range.
Nevertheless, according to Hendra, a drop below 7,000 is likely to be temporary.
“Fundamentally, Indonesia’s economy remains relatively stable, so the 6,800-6,900 level could become a strong support area,” he said.
Amid global pressures, several domestic factors are considered capable of holding back the JCI’s decline. Stable inflation, Bank Indonesia’s relatively controlled interest rate policy, as well as potential government spending and the attractiveness of dividend yields from large-cap stocks, serve as market supports.
Additionally, rising energy commodity prices such as oil and coal actually benefit Indonesia as an exporting country. This drives gains in energy and mining sector stocks.
“We see a dichotomy in the market. Energy stocks are rising, while banking and consumer stocks tend to weaken. This prevents the JCI from falling too deeply as it is supported by the commodities sector,” he explained.
Hendra also emphasised the importance of government steps in maintaining market stability. According to him, controlling the fiscal deficit and rupiah exchange rate stability are key to preserving investor confidence.
“In uncertain global conditions, investors are very sensitive to APBN stability and the rupiah. The government needs to ensure state spending is on target, especially to maintain people’s purchasing power,” he said.
From an investment strategy perspective, Hendra advised investors not to be aggressive but more selective and gradual. A buy-on-weakness approach, focusing on stocks with strong fundamentals and attractive dividend yields, is deemed more relevant.
“In conditions like this, cash is king. Investors should avoid aggressive short-term strategies and focus more on medium-term opportunities,” he said.
He added that market volatility actually opens up investment opportunities, particularly in commodity-based stocks and defensive sectors. Some stocks worth monitoring include PTBA with a target of 3,500, PGAS target 2,100, BUMI target 280, and LSIP target 1,600.
“These stocks have the potential to benefit from rising commodity prices and rupiah weakening, thus likely to outperform amid JCI fluctuations,” Hendra concluded.