JCI Still Likely to Consolidate, Here's the Strategy

KONTAN.CO.ID - JAKARTA. The Jakarta Composite Index (IHSG) is expected to remain volatile with a consolidative bias in the short term, amid a combination of global and domestic sentiments that are not yet conducive.

Budi Frensidy, a professor at the Faculty of Economics and Business at the University of Indonesia and a capital market practitioner, believes the room for the IHSG to strengthen is currently limited.

“In the short term, the IHSG is likely to remain volatile and consolidative, with limited upside potential,” Budi told Kontan on Sunday (12/7/2026).

On Friday (10/7/2026), the IHSG closed up 0.20%, or 0.53% higher on a weekly basis, at 5,924.36. However, the gain was still overshadowed by foreign investors’ net sell-off of around Rp421.5 billion.

This means the index’s recovery is not yet fully supported by a return of foreign funds to the domestic market.

He cautioned that although Indonesia is a commodity exporter, an excessively high rise in oil prices could in fact pressure the rupiah exchange rate, increase inflation, and burden the fiscal position as well as the margins of energy-consuming companies.

On the other hand, the tight monetary policy of the United States central bank, the Federal Reserve, adds further pressure.

“The 10-year US Treasury yield standing at around 4.6% increases the risk of foreign funds staying in dollar assets or leaving emerging markets,” he explained.

Thus, the combination of high oil prices and the Fed’s hawkish stance constitutes the main risk to foreign fund flows and IHSG volatility.

In the last trading session, the energy sector was even the biggest gainer.

Nevertheless, several factors remain a burden, such as continued foreign net selling, the weakening rupiah, high US bond yields, and growing concerns over market transparency and governance.

“Shallow liquidity means selling pressure on a number of large-cap stocks can have a disproportionate impact on the index,” Budi added.

In these conditions, relatively defensive sectors include consumer staples, healthcare, and telecommunications, particularly companies with strong cash flows and low debt.

Even so, commodity stocks are not considered entirely defensive because they are highly dependent on global price movements.

Meanwhile, large banking stocks are starting to look attractive in terms of valuation, although their recovery still awaits rupiah stabilisation and an easing of foreign selling.

In terms of strategy, investors are advised not to chase short-term price gains.

Investors should buy in stages, keep a portion of their funds in cash, and prioritise issuers with strong fundamentals.

“In a situation like this, stock selection is more important than merely guessing the direction of the IHSG,” Budi asserted.

In addition, portfolio diversification is also key. Long-term investors can take advantage of corrections to accumulate, while short-term investors need to be disciplined in applying stop-loss limits and avoid stocks with low liquidity.