Jakarta. Jakarta Composite Index (JCI) opened slightly higher on Tuesday as investors assessed Indonesia's shrinking foreign exchange reserves and renewed scrutiny over the government's plans to expand Danantara's role through potential state capital injections.

The benchmark index gained 2 points, or 0.03%, to 5,344 at the opening bell.

After the first 15 minutes of trading, volume reached 6.1 billion shares with turnover of Rp 3 trillion ($165.2 million) across more than 248,000 transactions. Advancers outnumbered decliners 304 to 244, while 176 stocks were unchanged.

Phintraco Sekuritas highlighted that Indonesia's foreign exchange reserves fell to $144.9 billion in May 2026 from $146.2 billion in April, marking the lowest level since June 2024. The decline was primarily driven by government external debt payments and Bank Indonesia's intervention efforts to stabilize the rupiah.

Despite the decline, the reserve position remains equivalent to 5.6 months of imports, or 5.5 months of imports and government debt servicing, well above the international adequacy benchmark of three months of imports.

"Continued declines in foreign exchange reserves could undermine investor and credit rating agency confidence. Therefore, the government needs to strengthen financial market confidence, boost exports, reduce imports, and attract foreign investment," Phintraco Sekuritas said.

The brokerage also noted signs of softer consumer demand after motorcycle sales fell 5.1% year-on-year to 479,388 units in May, reversing a 28.1% increase recorded in April.

According to Phintraco, rising living costs are putting pressure on household spending, indicating that consumer purchasing power may be starting to weaken.

However, cumulative motorcycle sales in the January-May period still rose 0.7% year-to-date to 2.61 million units. The Indonesian Motorcycle Industry Association (AISI) projects full-year sales of between 6.4 million and 6.7 million units, broadly in line with last year's realization of 6.4 million units.

"As of May 2026, motorcycle sales have reached approximately 38.96% to 40.78% of the 2026 full-year target. The industry also faces challenges from potential increases in financing interest rates," Phintraco said.

Meanwhile, Kiwoom Sekuritas Indonesia said Danantara has returned to the market's attention after Chief Operating Officer Dony Oskaria emphasized that Danantara Sumberdaya Indonesia (DSI) would not take margins from strategic commodity exports and would instead charge service fees for export monitoring and verification.

Investor focus, however, has shifted to Government Regulation No. 19/2026, which allows the state budget to be used for capital injections into Danantara's investment holding company.

"A number of economists believe this policy could increase fiscal risks, blur the distinction between state assets and Danantara assets, and raise questions regarding the accountability of public funds," Kiwoom said.

With Danantara increasingly positioned as a government fiscal instrument and potentially eligible for state capital injections from the budget, investors are expected to closely monitor whether the sovereign wealth fund can accelerate national investment or become an additional burden on the country's fiscal position.

On Wall Street, stocks stabilized overnight after last week's sharp sell-off, supported by renewed buying in artificial intelligence-related shares. Oil prices also rose amid ongoing hostilities between Israel and Iran, though gains moderated from earlier highs.

The S&P 500 advanced 0.3% after falling 2.6% on Friday, its steepest decline since October. The Dow Jones Industrial Average slipped 0.2%, while the Nasdaq Composite climbed 0.9%.

Across Asia on Tuesday morning, Japan's Nikkei 225 gained 0.85%, South Korea's Kospi surged 3.48%, Shanghai's SSE Composite rose 0.37%, while Hong Kong's Hang Seng slipped 0.18%.

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