Jakarta. Indonesian stocks opened higher on Thursday, gaining 22 points, or 0.43%, to 5,320 as blue-chip shares supported a recovery from recent losses, despite persistent pressure from elevated oil prices, a weakening rupiah and uncertainty over an upcoming MSCI index rebalancing.

Jakarta Composite Index (JCI) traded in a range of 5,303 to 5,320 in early trading.

RTI data showed that 1.14 billion shares had changed hands in the opening minutes, with a total transaction value of Rp 348.9 billion ($19.24 million) across 43,744 transactions. A total of 339 stocks advanced, 105 declined and 209 remained unchanged.

The index had previously fallen to 5,167 amid concerns over persistently high oil prices, continued rupiah depreciation and preparations for MSCI's November index rebalancing. Gains in blue-chip stocks, including Bank Central Asia (IDX: BBCA) and Astra International (ASII), subsequently helped lift the benchmark.

"Technically, the JCI is expected to move sideways today within the 5,150–5,350 range," Phintraco Sekuritas said in its Thursday research note.

Market Reforms and IPO Targets
Phintraco Sekuritas said the Indonesia Stock Exchange (IDX) had reaffirmed three strategic priorities for the capital market in 2027: improving transparency, strengthening liquidity and optimizing supervisory effectiveness.

"These measures are part of efforts to restore investor confidence amid calls for reforms to strengthen capital market governance," the brokerage said.

The IDX has also cut its 2026 target for initial public offerings (IPOs) to 15 companies from an initial goal of 50. It aims to attract 25 IPOs in 2027.

"Amid declining investor confidence in Indonesia's capital market, IPOs should prioritize quality over quantity," Phintraco Sekuritas said.

The exchange has also opened the possibility of pursuing an IPO after completing its demutualization process, which would separate ownership of the exchange from membership.

At an extraordinary general meeting of shareholders on Oct. 28, the IDX took an initial step toward that long-term goal by amending its articles of association to allow exchange ownership beyond its current exchange members.

Phintraco Sekuritas said demutualization could create new investment opportunities, accelerate innovation and improve transparency and governance. However, it also warned of potential conflicts of interest, dominance by large entities and adjustments to transaction costs.

Pluang Research said the reform would bring Indonesia closer to the practices of major global exchanges by separating exchange ownership from membership. Danantara's emergence as a prospective first shareholder, with due diligence still underway, signals that the reform is moving from discussion toward implementation.

"The move complements a series of reforms addressing MSCI's concerns, ranging from the freezing of accounts suspected of market manipulation and greater disclosure of share ownership to the exclusion of HSC stocks from JCI calculations starting Nov. 2," Pluang said.

Global sentiment improved as investor interest in artificial intelligence (AI) stocks rebounded, with semiconductor companies' earnings reinforcing expectations for sustained demand for AI computing, according to Kiwoom Sekuritas Indonesia.

Wall Street closed higher on Wednesday. The S&P 500 rose 0.3% to 7,743.98, the Nasdaq Composite gained 0.3% to 26,549.85 and the Dow Jones Industrial Average advanced 0.2%.

However, concerns over the substantial funding requirements and infrastructure spending associated with AI continue to cloud the rally's outlook. “Investors are monitoring capital expenditure projections from the Magnificent Seven technology companies to determine whether revenue growth can justify their high investment levels” said Kiwoom.

Upcoming earnings reports from technology companies are also expected to provide a key benchmark for AI stock valuations and the market's near-term direction.

Meanwhile, the Federal Reserve held its federal funds rate at 3.75% to 4% in a 10-2 vote. Lisa Cook and Beth Hammack dissented, favoring a 25-basis-point rate increase.

Fed Chair Kevin Warsh said labor market conditions remained fairly positive but emphasized that inflation continued to dominate policy discussions.

Add as a preferred source on Google +